Government running to IMF for bailout is the right thing to do – Alhassan Andani

Ghana runs to IMF for financial assistance

Government's programmes outflow exceeds the income generated, Alhassan Andani

Expenditure outflow and Income generated gap must be bridged, Dr Andani

Former Chief Executive Officer of Stanbic Bank Ghana, Dr. Alhassan Andani,

Read full articlehas said the government's decision to go to the International Monetary Fund (IMF) for financial assistance is the best thing to do amidst the current economic crisis.

He explained that it is appropriate for countries that have their expenditure exceeding their income generated to seek a lending hand from a lender [IMF] to bridge the gap.

Speaking in an interview with TV3, Dr Alhassan Andani averred that government's flagship programmes have positioned the country to a stance where the total expenditure outflow exceeds the income generated.

“I think it is the most appropriate thing to do, the IMF, in the finances of nations, is more or less the lender of last resort and every economic entity, individual, companies in dealing their financials, you get to a point where your expenditure exceeds your income and therefore you need to go to your lender to discuss how to bridge the gap.

“At the point where we are in Ghana clearly, all of the programmes the government is prosecuting has positioned the country where the total expenditure outflow exceeds the income and income in this case, taxes and all other receivables that the government has. There is a big gap and therefore, [government] has the right and indeed, the responsibility to go to a lender of last resort which is the IMF. So I think it is the right thing to do,” Dr Alhassan Andani stated.

President Nana Addo Dankwa Akufo-Addo, on Friday, July 1, 2022, instructed the Finance Minister, Ken Ofori-Atta, to commence official engagements with the International Monetary Fund.

According to a press statement sighted by GhanaWeb, the IMF support will 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 crisis.”

The International Monetary Fund (IMF) on the same day confirmed that the Government of Ghana had run to them for a financial bailout to stabilize the economy.

Announcing this on the microblogging site - Twitter - on Friday, July 1, 2022, the IMF said it was poised to assist Ghana to have a homegrown economic programme.

"We confirm Ghana officials have been in touch to request IMF support for a homegrown economic program. The Fund stands ready to assist Ghana & looks forward to starting initial discussions in the coming weeks," the IMF stated.

Meanwhile, IMF negotiations with Ghana began on Friday, July 6, 2022.

ESA/BOG