An economist, Prof Godfred Bokpin, has projected that Ghana would certainly request an extension of the International Monetary Fund (IMF) programme when its scheduled conclusion in 2026 is due.
Comparing the timeframe to the outlined objectives in the programme, the economist was skeptical that the country can achieve the goals in the stipulated three-year timeline.
He said this during a discussion themed “IMF Programme: The Financial Sector Impact” JoyNews’ PM Express on Monday.
“In totality, the 17th IMF programme has been designed with an extension in mind. We should just understand that it looks almost certain that Ghana will ask for an extension after 2026.
“This is because if you look at some of the objectives outlined, including debt sustainability, we can’t have that by 2026. So at the program end review, we will certainly make a case for an extension,” he told Evans Mensah.
The Board of IMF on Wednesday, May 17 approved a programme for Ghana. Subsequently, a first tranche – $600 million – of the $3 billion was credited to Ghana’s bank account.
The funds will be used for the balance of payment and budget support, as well as to stabilize the foreign exchange rate and control inflation.
However, Prof Bokpin believes the government could gain substantial benefit from the deal if it engages the financial sector
According to him, there is too much bitterness among stakeholders especially bondholders due to how their investments are being held up by the state.
He said should the indifferent posture of government persist, there will be panic withdrawal which would bid well for the state in the long run.
“There is so much pain in the system and with the IMF programme, government needs to sit down and calm the market. Part of that will be having a credible plan of paying government bonds predictably. You just can’t restore confidence by mere words.
“And the focus should not only be on the banking sector, we need to look at the capital, investment markets and others. So let’s iron all these out, when people see that government is honouring bonds, people will plough back the money into the system because right now people are withdrawing their money and looking at other ways to keep the money which isn’t good.
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