[ 2014-10-22 ]

Razia is Standard Chartered’s Head of Africa Research and a well-known commentator on African markets

IMF can't solve Ghana's challenges -- Stanchart head of research
Head of Africa Research for Standard Chartered
Bank, Razia Khan, says an International Monetary
Fund (IMF) programme may not bring an end to
current challenges facing Ghana's economy.

She explains: "no Fund programme on its own is
ever going to be a panacea [for economic
challenges]. What is needed is reform, and that
will have short term costs. No question about
it".

The renowned expert on African markets however
believes Ghana's economy is most likely to become
more stable with a Fund programme, because failure
to obtain IMF assistance could rather bring
immense economic costs to the country.

"Ghana will do very well not just to opt for an
IMF programme but to follow it through. Even then
the level of funding that it is likely to get is
not going to be enough on its own to resolve all
of Ghana's problems overnight" she said.

Ghana is working towards securing monetary and
technical assistance from the Washington-based
lender by next year if negotiations end
successfully by next month.

Speaking to Joy Business' George Wiafe in London,
Razia Khan said Ghana government must firmly put
in place additional measures to complement any IMF
programme it will get.

"The hope is that an IMF programme will help to
unlock other sources of funding. Perhaps Ghana
might see donor support from other quarters, but
it will still need to do a lot on its own. [Ghana]
will still need to look to mobilise revenue and
look for those painful ways to cut spending, [and]
cut the buildup in its debt", she counseled.

After many months of a depreciating cedi against
major international trading currencies, Ghana's
local currency stabilised by about 15 percent over
the past few weeks.

Although some experts say government must work
towards improving the cedi's stability even
further, Razia Khan thinks otherwise. She said the
best managers of Ghana's economy can do is to
"enjoy it while it lasts".

According to her the country's economic
fundamentals are not capable of sustaining the
cedi's exchange rate stability, advising instead
that focus should be on improving the fundamentals
of Ghana's economy.

"It's very difficult to think that [government's]
priority right now should be to do something about
exchange rate strength", she said.

Source -

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