Deputy Finance Minister, Kweku Kwarteng, says the International Monetary Fund (IMF) pushed for the extension of the $918 million three-year credit facility, although the current administration was against it.
“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,” Mr Kwarteng told Bernard Avle on Accra-based Citi FM on Monday, 11 September.
“We didn’t think we needed that,” he said.
The extension of the facility by one year came a few weeks after President Nana Akufo-Addo announced that his government was not going to extend the programme which his party criticised while in opposition.
President John Mahama’s administration signed the deal with the Bretton Woods institution in a bid to restore debt sustainability and macroeconomic stability.
The bailout programme was also to foster high growth and job creation through agriculture and infrastructure investment, while protecting social spending, rebuilding external buffers, among others.
Explaining the sudden U-turn, Mr Kwarteng said, “What we didn’t anticipate was the response we subsequently got from the IMF”, which he said 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.”
Mr Kwarteng further explained that the government gave in to 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.”
“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,” Mr Kwarteng explained.