Dominic Anarigide, Economist and Financial Policy Analyst has explained that the government’s rather shocking and remarkable u-turn towards the International Monetary Fund (IMF) may have already begun giving the country slight benefits already.
This is because, investors have begun regaining confidence in bonds issued by the government, a situation that was almost hopeless just a few weeks ago.
Mr. Anarigide explained that there is a direct relationship between the government’s communication to go back to the IMF and the slight boost in confidence in the country’s economy.
He said this when he spoke on A1 Radio’s Day Break Upper East Show today, Monday, July 4, 2022.
“We just picked signals on Saturday that our bonds are beginning to show some positives. Investors are beginning to show interest in our bonds. Our bonds were almost given for nothing. They achieved the ridiculous title of junk bonds. The return to the IMF is the reason, nothing else.”
“That is the credibility that we normally talk about; restoring confidence in the economy. When you engage with the IMF, investors would begin to have an interest in whatever you are doing. They know that you are going to people who are likely to put the economy back on the right footing so that if they put their money in your economy, they are likely to get back their money,” he said.
Earlier, Mr. Anarigide explained that while Ghana’s decision to go to the IMF is a little late, it still could help realign the economy.
“Even after elections, the signs were beginning to show that if we did not seek IMF bailout, things were going to get worse. The government attempted on its own and yet we saw the situation getting worse and worse. If we had gone there in 2021, we would not be where we are now. Things would have been better,” he said.
Amid protests over spiralling prices and the rising cost of living, the government of Ghanaian President Nana Akufo-Addo has reneged on its pledge not to borrow from the IMF after hitting the wall with its domestic economic recovery plan.
On 1 July President Akufo-Addo announced that he has instructed Finance Minister Ken Ofori-Atta to open negotiations for a programme.
“The engagements with the IMF will seek to provide a balance of payment as part of a broader effort to quicken Ghana’s build back in the face of challenges induced by the Covid-19 pandemic and, recently, the Russia-Ukraine crises,” a government statement said.
Until now, the government had ruled out the option of an IMF programme, settling for a homegrown economic recovery plan that included the introduction of a 1.5% tax on electronic financial transactions (E-levy) which sparked widespread protests.
Source: A1radioonline.com|101.1MHz|Mark Kwasi Ahumah Smith|Ghana
