IMF $3billion bailout: Whether we like it or not, restoring macroeconomic stability is going to come at a cost — Prof. Bokpin

Professor Godfred Bokpin, an economics lecturer at the University of Ghana Business School (UGBS), argues that the $3 billion bailout from the International Monetary Fund will worsen the situation for the vulnerable in the country.

Prof. Bokpin said on Eyewitness on Citi FM that it is too soon to celebrate the program's approval, especially since it will have a bad impact on the poor.

“I don’t think that we should jubilate over this because there are painful adjustments ahead of us in order to restore macroeconomic stability. Whether we like it or not, restoring macro stability is going to come at a cost. Unfortunately, the adjustment cost in the programme will not be evenly distributed. The adverse distributional effect will impact the vulnerable more than those who actually inflicted this pain on us.

“If you look at the IMF programme, typically, the fiscal consolidation mix takes the form of revenue enhancement and expenditure restraint, but the IMF lent its support toward government’s approach such that the problem is more revenue than expenditure or corruption or efficiency and that is problematic,” he stated.

He also criticized the NPP government for its reckless borrowing and spending spree, which led to the country running to the IMF for a handout.

“You are looking at scaling up your tax-to-GDP ratio to up to 18.2 percent by the next two or three years and that is a lot of sacrifice on the part of businesses and households and it cannot be solely that the reason Ghana is facing this crisis is because of low revenue because that is not true. If we were efficient with the little we were able to generate, and we were able to deal with corruption, this is not where this country would have been,” he stated.