Minority predicts tough times with a possible IMF programme

The Minority says Ghanaians are set to face even more difficult economic times as the country begins negotiations Tuesday, with the International Monetary Fund (IMF) for a possible bailout programme.

The group told journalists utility tariffs and petroleum prices will shoot up, while public sector job losses will increase if managers of the economy agree to proposals from the Washington-based lender.

Ghana reached out to the International Monetary Fund after inflations, a ballooining budget deficit and a tumbling cedi plunged the country into economic instability.

The IMF and a Ghanaian team led by former Finance and Economic Planning Minister, Prof. Kwesi Botchwey begun negotiations today.

Minority Spokesperson on Finance Anthony Osei Akoto said three factors – Ghana's signing on to the Millennium Challenge Account (MCA), the country's debt stock and the automatic adjustment formula in the petroleum sector – make predictions of difficult times ahead credible.

On the MCA, the Minority said government would have to demonstrate substantial compliance to the electricity distribution utility payment action plan, which means managers of the economy must put forth a credible plan to pay debts owed the Electricity Company of Ghana (ECG) and other electricity distribution companies.

But according to the Minority, information it has suggests the debt owed by government to the electricity distribution companies ranges between 300 million dollars to 500 million dollars – an amount the group says will be difficult for government to pay.

To add to government's predicament, according to the Minority, payment of new arrears must be made within 60 days.

The Minority also said at the news conference the country's current debt stock is creating serious problems for debt sustainability.  Story by Ghana | Myjoyonline.com | George Nyavor | [email protected]