[ 2015-04-17 ]

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

Source - Daily Guide

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