A lecturer of the Ashesi University, Dr Lloyd Amoah, has lashed out at the International Monetary Fund (IMF) for presenting itself as having all the answers to economic challenges.
“The IMF doesn’t have all the answers and yet it has postured itself to be an entity that has all the answers. It seems as though if you have the IMF, heavens will open; no doubt our government says we have to go to the IMF for policy credibility. That is the silliest argument I have heard in my entire life,” he said.
Speaking at the maiden edition of the Thinkers Dialogue Series (TDS), Dr Amoah described the Washington-based fund as a “worrying beast” which has succeeded in portraying itself as a haven of economic solutions and, therefore, many governments run to it anytime they had challenges.
“The IMF is underpinned by American power and it has a vast reach. So whatever it says can either affect an economy negatively or positively. So managers of an economy would want to be in the good books of the IMF, psychologically because of the power they wield. It can even affect the flow of Foreign Direct Investments (FDIs) into a country,” he said.
He said the IMF was more like a hegemony that insisted on a particular understanding of the economy, describing it as dangerous because “it stops the possibility of contrary thinking and tries to prescribe ways in which African economies should be run.”
Despite lashing out at the IMF, Dr. Amoah said the fund was still useful to an economy because countries could gain from their interaction with it.
“It is a vast research entity that has a lot of understanding of the global financial system. You can gain from interacting with them in terms of data and technical competence. The IMF is useful because it is an economic healer of a sort, so if you have a problem with your budget or balance of payments, you can fall on the IMF,” he said.
IMF, not Ghana’s problem
A medical doctor and founder of the African Reform Movement (ARM), Nii Amu Darko, who joined the discussion via Skype from Australia, said the fundamental principles underlying Ghana’s economic challenges were constitutional and political, and not an IMF programme.
Development and progress, he said, depend on good governance and good governance also depends on a good system of government.
“Bad governance comes from a bad system of government and, therefore, bad governance is the reason Ghana keeps going to the IMF for bailout; Ghana’s problem is not the IMF. The challenge of Ghana lies squarely with the constitution,” he said.
He also stressed that “when you badly govern your country and become poor, you have no choice but to go to the IMF and be dictated to. We do not have a reason for going to the IMF.”
The President of Policy Think Tank, IMANI Ghana, Mr Franklin Cudjoe, said the country’s current economic woes were as a result of failure to prudently manage financial resources and not because of the IMF.
He said signing on to the IMF brought temporary gains but as to how they were used should be concern for all. He lamented the wasteful spending of successive governments.
“The IMF and the World Bank programme during Kufuor’s time helped to stabilise the country’s economy. During 2008, an election year, we spent so much that we came back to our initial position and our debt crisis rather soared,” he said.
He also added that the government, in the last six years, had generated more than US$16.2 billion in tax revenue in addition to generating over US$13.4 billion in oil revenue but still managed to go the IMF for support.
Ghana and the IMF
Successive governments have resorted to the IMF for bailout since the 1960s till date. The IMF in 2015 approved a US$950 million loan for Ghana to support its economic reform programme.