Business News of Tuesday, 5 July 2022
Source: www.ghanaweb.live
2022-07-05Subsidizing government's flagship initiatives will not be supported by IMF – Prof. Quartey
Professor Peter Quartey, Economist and Director of Research ISSER-UG
IMF team arrives in Ghana for formal talks
President Akufo-Addo to address nation on IMF engagements – Oppong-Nkrumah
Create business-friendly environment to support IMF programme – Prof. Quartey
Economist, Professor Peter Quartey, has opined that the International Monetary Fund will reject any programme that will see government subsidizing some its flagship initiatives.
Read full article/>
To get the buy-in of the Bretton Wood institutions to secure an economic support programme, Prof. Quartey called on government to adopt measures aimed at creating a business-friendly environment.
Sharing his opinion ahead of talks between government and IMF on July 6, the Director of Research at the Institute for Statistical, Social and Economic Research (ISSER) said subsidizing any key flagship programmes will not bode well for the engagements.
“I believe the IMF is not in support of any planted subsidies. They would like you to provide the enabling environment for key industries and sectors to thrive. So, whatever you can do to provide the enabling environment, I believe they would support that. But to say you are going to subsidize agriculture or manufacturing wholesale when you don’t have the resources, I don’t think you can do that,” he is quoted to have said by Citi Business News.
“So where there has to be an enabling environment for the sector to thrive they will indeed support us, given that we have the resources, otherwise they will not,” he added.
Meanwhile, government ahead of talks with the IMF has assured it will safeguard jobs in the public sector, security and other flagship programmes such as the Free SHS, One District, One Factory and among others.
Background
President Nana Addo Dankwa Akufo-Addo on July 1, authorized the Finance Minister, Ken Ofori-Atta, to hold formal talks with the Bretton Woods institution.
This comes after Ghana has in recent months been faced with rather difficult economic challenges which have left almost all economic indicators in distress.
The country, in spite of some gains made during the COVID-19 pandemic, is facing a huge debt burden, revenue generation constraints and other factors which have placed the economy in a dire situation.
Recent developments on the globe, coupled with supply chain disruptions, the fallout from the pandemic and Russia’s invasion of Ukraine have made the situation even direr.
Government of Ghana is however targeting about US$3 billion from the International Monetary Fund under an economic support programme.
This was contained in a document released by the Ministry of Finance spelling out some details of the government's engagement with officials from the Bretton Woods institution in July.
The ministry explained that it seeks to secure the fund under a recently introduced innovative blended programme from the IMF dubbed; High Combined Credit Exposure (HCCE) policy.
MA/FNOQ
