IMF team in town to hold talks on bailout

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Created on Tuesday, 19 August 2014 00:00

IMF team in town to hold talks on bailout

19 August 2014

Discussions on an economic programme that will be supported by the International Monetary Fund (IMF) to bail the country out of its current economic challenges are to be held this week. - See more at: http://graphic.com.gh/news/general-news/29119-imf-team-in-town-to-hold-talks-on-bailout.html#sthash.S5Y0sm7p.dpuf

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A team from the IMF is expected to meet the government at the Peduase Lodge, where formal discussions are expected to open on the bailout negotiations.

A source at the Presidency told the Daily Graphic that the government was ready to negotiate with the IMF officials and expressed optimism about the outcome, although it declined to proffer details.

The Deputy Managing Director of the IMF, Min Zhu, had earlier, in a statement, announced that the fund had received a formal request from the country to initiate discussions on an IMF support programme for Ghana.

It said, “The fund stands ready to help Ghana address the current economic challenges it is facing....An IMF team will be sent to Ghana in early September to initiate discussions on a programme.”

Bailout brouhaha

The government recently announced its decision to seek a bailout from the IMF to help restore stability in the economy, particularly in the areas of strengthening the local currency and reducing the fiscal deficit.

This was greeted with mixed reactions by the public, including the Minority in Parliament, who blamed the current state of the economy on gross mismanagement.

Industry stakeholders have expressed the belief that the IMF’s bailout would further burden Ghanaians with economic hardships, since stringent measures would have to be instituted to salvage the economy.

President defends

But the President, Mr John Dramani Mahama, has refuted such claims and explained that the government decided to hold discussions with the IMF not because of the government failure to manage the economy but because the country needed the IMF bailout for policy credibility and confidence from the international financial institutions, capital markets and investors due to the measures it was implementing to restore economic stability and growth.

The President had earlier directed that immediate steps be taken to engage the IMF and other development partners to help the country out of the current economic challenges.

Speaking on Bloomberg TV Africa in Washington during his recent trip to the USA, where he attended the three-day US-African Leaders’ Summit, President Mahama explained that the relief that the government was seeking from the IMF “is more along a discussion and a programme that we are looking at”.

He said the IMF's assistance might help bolster investor confidence, as the government prepared to sell $1.5 billion in Eurobonds by the end of August this year.

“If having a closer relationship with the IMF will give that confidence to our partners to be able to work together to achieve that, we are happy to do that,” he said.

Central bank boss

The source at the Presidency expressed concern about calls by a section of the public for the President to dismiss the Governor of the central bank, Dr Henry Kofi Wampah, saying that those calls were inimical to bolstering investor confidence.

It said the position of the central bank governor was not supposed to be a ‘popular’ one and as such the person in that office could only be removed on grounds of personal misconduct.

By Sebastian Syme

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Source: Daily Graphic/Ghana