‘IMF program won’t save the economy; let’s revive our local industries’ – AGI

Economy & Investments IMF program wont save the economy; lets revive our local industries – AGI
JUL 1, 2022 LISTEN

The Chairman of the Association of Ghana Industries Accra (AGI), Tsonam Akpeloo says the cycle of governments resorting to the International Monetary Fund (IMF) for bailout will not break if the nation does not revive local industries.

Speaking to Citi News, Mr. Akpeloo admitted that “going to the IMF has its own impact, stabilising the economy among others.”

He however believes the nation could have stuck to home-grown solutions, which according to him is the only way for the country to come out of its cyclical dependence on IMF.

“The nation could have as well adopted home-grown programs which will encourage and promote massive local industrialization and minimise the importation of finished products. This is the only way Ghana can come out of the cyclical dependence on the IMF.”

In his view, the best the IMF program can do for the country is to instil fiscal discipline.

“The money they will give is not money we cannot raise here. We have local industries that can generate money within a year. What we lack as a nation is not the resources, but the discipline.”

He said he is nevertheless waiting to see how the program pans out.

The AGI chair further advised government to seize the opportunity the program presents to engage industry stakeholders on how best to boost local industries.

“With this, we do not have to run to the IMF after every 5 years.”

He profferred some solutions to increase industrialisation in the country.

“You can not continue to promote the importation of finished products. We need to place an embargo or reduce the importation of products that Ghana has the capacity to produce. There are industries that have the capacity to produce and supply products such as steel and fertilizers to the entire nation.”

Government is set to commence talks with the International Monetary Fund (IMF) for a bailout following severe challenges to Ghana's economy.

The Information Ministry in a statement explained that this decision was taken at a meeting on June 30, 2022.

“The engagement with the IMF will seek to provide balance of payment support as part of a broader effort to quicken Ghana's build back in the face of challenges induced by the Covid-19 pandemic and, recently, the Russia Ukraine crises.”

Ghana's economy is currently in dire straits with worsening public debt, rising inflation, skyrocketing fuel prices, and cedi depreciation among others.

Recent data released by the Bank of Ghana put Ghana's total public debt stock, as of March 2022, at US$ 55.1 billion (GH¢391.9 billion).

Ghana officially exited an IMF programme that commenced in 2015 on April 2, 2019.

Under the Mahama administration, Ghana turned to the IMF in 2015 for an almost $1 billion extended credit-facility programme.