Mr Abraham Koomson, Secretary-General of the Ghana Federation of Labour (GFL), has expressed the keen interest of Organized Labour and all Ghanaians in the utilization of the $3 billion loan facility from the International Monetary Fund (IMF).
“Ghana received approval for the three billion US dollar bailout, and the first disbursement of 600 million dollars has been released,” Mr Koomson stated, emphasizing that the disbursement was expected to occur in tranches.
Workers, according to Mr Koomson, are not particularly enthusiastic about the IMF Board's approval itself but rather about how the funds will be applied, as it will have a direct impact on their lives.
“It won't impact positively on the fortunes of workers; the hardships are going to worsen, and it will erode the gains that the unions have fought for over the years,” Mr Koomson added, expressing concerns that such bailouts often bring about hardship instead of comfort for the people.
Mr Koomson highlighted the introduction of three new excise duties as evidence of the potential hardships that companies and workers may face as a result of the loan approval.
“The economic management team of the Government should be forthright with the people on the conditionality and its implications instead of being evasive on the matter,” Mr Koomson urged, emphasizing the importance of transparency in communicating the details of the loan agreement.
In a press release obtained by the Ghana News Agency in Tema, titled “IMF Executive Board Approves US$3 Billion Extended Credit Facility (ECF) Arrangement for Ghana,” the IMF stated that the economic program supported by the ECF arrangement aligns with the government's Post COVID-19 Programme for Economic Growth (PC-PEG).
The IMF mentioned that Ghana has faced significant fiscal and debt vulnerabilities due to external shocks, resulting in a loss of international market access, limited domestic financing, and a reliance on government monetary financing.
“The authorities have taken bold steps to tackle these deep challenges, including by accelerating fiscal adjustment,” the IMF noted, acknowledging the government's efforts in addressing the crisis.
The IMF also emphasized the government's comprehensive debt restructuring to alleviate financing constraints and address the unsustainable public debt.
“Securing timely debt restructuring agreements with external creditors will be essential for the successful implementation of the new ECF arrangement,” the statement from the IMF highlighted, underscoring the importance of debt restructuring.
The program outlined key policies, including substantial fiscal consolidation, efforts to protect the vulnerable, ambitious structural reforms in tax policy, revenue administration, and public financial management, and steps to address weaknesses in the energy and cocoa sectors.
The IMF stated that appropriately tight monetary and exchange rate policies will be implemented to bring inflation back to single digits and rebuild international reserves. The program also places a strong emphasis on preserving financial stability, private investment, and growth.
