IMF Defends Bawumia

The New Patriotic Party (NPP) has said that Dr. Mahamudu Bawumia, the party’s vice presidential candidate for the 2016 general elections, has been vindicated by Ms. Christine Lagarde, Managing Director of the International Monetary fund (IMF), over his (Bawumia’s) recent diagnosis of Ghana’s ailing economy.

In the view of the party, the IMf chief’s diagnosis of the failures of the National Democratic Congress (NDC) government that had caused the current economic hardships in the country was exactly what Dr. Bawumia had harped on.

In August 2014, the government went to the IMf for financial support and technical advice as it (government) battled to overcome serious microeconomic instability caused by a hefty budget deficit of 11.6 percent of GDP recorded in 2012, followed by another double digit deficit of 10.4 per cent of GDP in 2013 with the attendant rising debt profile of almost 70 percent of GDP.

Ms. lagarde in a recent media report, was quoted as stating that in order for Ghana to restore its economic health, it needed to strictly implement measures agreed on under the IMf bailout of about $950 million which Ghana is

receiving.
she mentioned fiscal indiscipline since 2012, huge deficit spending, reckless borrowing, high debt servicing, low spending on investment as against high recurrent spending, as some of the reasons for Ghana’s dying economy.

The NDC propagandists, including samuel Ofosu Ampofo, a vice chairman of the ruling party, had said the IMF bailout is the best thing that had ever happened to Ghana.

According to Ofosu Ampofo, the IMF loan would give the managers of the economy a breather on repayment of high interest loans, pointing out that going to the IMF was a right decision.

President John Mahama had said Ghana was not going for a bailout but rather a policy credibility and ended up receiving a bailout to the tune mentioned above.

Nana Akomea, NPP’s Communications Director, in a statement issued yesterday, said long before the government went cap-in hand for this current bailout from the IMF, Dr. Bawumia had diagnosed the massive failures in government policy and warned of their consequences.

‘He had warned since 2013 that the forex controls put in place to stop the cedi’s slide were ad hoc, artificial and would not work,’ the statement indicated.

According to Nana Akomea, Dr. Bawumia had also warned of the dire consequences of government policy, such as the cedi sliding to GH’4 a dollar by July 2014, and the resort to the IMF bailout.

Regrettably, the statement said, Dr. Bawumia was met with outright condemnations and insults, including a retort by President Mahama that government would continue borrowing as it was not borrowing to buy ‘Kebab.’

‘In the event, all the consequences that Dr. Bawumia warned about have happened; the cedi reached GH’4 by July 2014, the forex measures put in place were ineffective and withdrawn in 2014 and Ghana has sought IMf bailout,’ Mr. Akomea observed.

The NPP’s Communications Director further stated, ‘It is most sad that when Dr. Bawumia made these diagnosis and gave the helpful warnings, he was pooh-poohed by government.’

Nana Akomea said now that the IMF has given same diagnosis and warnings, the government is willing to go along with them and adhere strictly to the fund’s dictates, adding that ‘an explanation is perhaps given by Dr. Omane Boamah, Communications Minister, that the government has better regard for the ‘superior’ technical skills of the IMF and other ‘Bretton Woods’ institutions.’

‘This indeed,’ he stated, ‘is confirmation of the utter helplessness of the government


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