The third review of the Extended Credit Facility (ECF) supported programme by the IMF was speculated to have ended in a deadlock with government of Ghana.

It is still unclear why the IMF Mission Chief for Ghana, Mr. Joel Toujas-Bernate and his team left the country on September 2, 2016 without any firm statement from government to the people of Ghana. There is high speculation that, the IMF is unhappy about how government has conducted itself during this process most especially with provision of accurate macroeconomic indicates and government approach on financing State Owned Enterprises (SOEs).

Some say there is pressure on government to privatize ECG to make it more profitable and efficient. How true is this speculation and what will its impact be on the economy of Ghana? Some economists and stakeholders of the economy have alleged that, the IMF is not satisfied with the implementation procedure of the zero financing of government by the Central Bank, the Public Finance Management law and the ballooning of public debt by government.

A quick change of plan by the government to issue the first 10-year local bond in October to raise some GHS 200 million leaves a lot of questions in the minds of people. Some have asked why government will not exercise some restrain and allow full completion of the ECF programme with the IMF.

This local/domestic bond by government will simply make financing for the private sector very difficult because already access to facilities/loans is limited. This will put a lot of pressure on the private sector, how can they compete with government over the limited financing resources when government will offer better rate and it is also almost risk free. If this happens, how will they expand and create jobs?

Government of Ghana must show commitment to the program by providing accurate information to the IMF and also engaging them on the implementation of the Amended Bank of Ghana Act, The Public Finance Management law and the government financing of SOEs. Government should slow down on the mismanagement of funds most especially during this last quarter of the year.

There is the need for fiscal discipline and prudent management of the macroeconomic indicator for economic stability to maintain the investor confidence in the country. A peaceful, transparent and fair election is what we look forward to as a nation.

By Jelili Jerry Afolabi, financial analyst


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