Professor Godfred Bokpin, an economics lecturer at the University of Ghana Business School (UGBS), has claimed that the authorised $3 billion International Monetary Fund loan facility will worsen the situation for the disadvantaged.
Prof. Bokpin stated on Citi FM’s Eyewitness that it is too early to celebrate the program’s approval, especially because it would most certainly hurt the poor.
“I don’t think we should celebrate because there are unpleasant adjustments ahead of us to restore macroeconomic stability.” Whether we like it or not, restoring macroeconomic stability will come at a cost. Sadly, the program’s adjustment costs will not be fairly dispersed. The detrimental distributional effect will disproportionately affect the disadvantaged rather than those who caused us this suffering.
“Typically, the fiscal consolidation mix takes the shape of revenue increase and spending limitation, but the IMF provided its backing to the government’s strategy, such that the problem is more revenue than expenditure, corruption, or efficiency, and that is problematic.”
He further scolded the government’s reckless borrowing and spending which has brought the country thus far needing an IMF programme which demands sacrifices from businesses and households.
“You are looking at scaling up your tax-to-GDP ratio to up to 18.2 percent by the next two or three years and that is a lot of sacrifice on the part of businesses and households. And it cannot be solely that the reason Ghana is facing this crisis is because of low revenue because that is not true. If we were efficient with the little we were able to generate, and we were able to deal with corruption, this is not where this country would have been.”
