The government has finally given reasons for the government’s decision to extend the three-year International Monetary Fund (IMF) Credit Facility programme by a year.
According to government, it was compelled to approve the extension because the IMF threatened to immediately abrogate the whole deal if government declined the proposal.
A Deputy Minister of Finance, Kwaku Kwarteng who made the revelation on the Citi Breakfast Show on Monday said the IMF told them that the programme “had under-performed” and Ghana would miss its objectives for going for the facility, hence the only way to be back on track is an extension.
…The IMF has been around for two years and they the IMF are now telling us that the programme has so under performed and so we should now extend it. We didn’t think we needed that. So when we expressed that view to them… what we didn’t anticipate was the response we subsequently got from the IMF was that…if we do not extend then there is no way we were going to achieve the objectives of the programme so they will end the programme today,” he said.
The NPP government had in the past chastised the Mahama government for putting Ghana under the IMF programme and promised not to extend it after the programme elapsed in 2018 but per the new agreement the programme will now end in April 2019.
IMF approved an additional 94 million dollar disbursement for the extension which implied that freeze on government sector employment will linger on.
A lot of Ghanaians subsequently lashed out at the Akufo-Addo government for the one year extension window.
But defending the issue on the Citi Breakfast Show, Mr. Kwarteng said government approved the extension because “we didn’t want to hurt Ghana’s credible image”
“…I for instance thought that from what we had told them that we did not want to come out of the programme as though there is a new government and government had abandoned the programme, it will send a wrong signal to the market and it will hurt our image as a credible country so we said we were not going to do that.”
He said the IMF further threatened not to continue with the fourth quarter review of the IMF programme with Ghana if the government rejects the request for an extension.
“That was in plain language that the IMF was telling us that if you do not extend beyond first quarter of 2018, then we think that we are not even going for the review,” the Deputy Finance Minister added.