In an article titled “Breaking the 17; Alternatives to IMF conditionalities for economic development in Ghana,” ace Ghanaian journalist and The Citi Breakfast Show host Bernard Avle discusses several key points regarding Ghana's reliance on the International Monetary Fund (IMF) for financial assistance and the need for alternative approaches to economic development.
Here is a detailed report on the main points raised in the article:
Ghana and IMF
The article highlights that Ghana has had to turn to the IMF for financial bailouts numerous times over the past 65 years. The latest approach to the IMF marks the 17th program since the country gained independence in 1957. The author emphasizes that previous IMF programs have not effectively transformed Ghana's post-colonial economy into a dynamic and resilient one.
Ghana's challenges
The article discusses the challenges faced by Ghana, including large fiscal deficits, high debt levels, low public investment, and recurring debt service costs. These challenges have led to fiscal policy difficulties and the need for debt restructuring.
Ghana's recent IMF programs
The article briefly outlines Ghana's most recent IMF programs in 2003, 2009, and 2015. These programs aimed to address fiscal adjustments, budget management reforms, debt sustainability, and policy credibility. However, the author suggests that these programs did not lead to the desired transformation of the economy.
Beyond fiscal discipline
The author argues that there are deeper factors contributing to Ghana's recurring reliance on IMF programs. These factors include ideological, cultural, philosophical, and historical elements that are not adequately addressed by short-term IMF programs. The article highlights the need for a fundamental shift in the country's economic structure.
Limitations
The article points out certain limitations of IMF programs. It criticizes the IMF's focus on debt servicing and macroeconomic stability rather than addressing the underlying structural issues causing the debt. The author also highlights the shift from concessionary to non-concessionary loans and the increasing vulnerability to international capital markets.
Dependence on imports
The article discusses Ghana's dependency on imported food and fuel, which puts pressure on the Ghana Cedi and leads to increased borrowing in foreign currencies. The author argues for a shift towards producing and consuming locally grown food and harnessing renewable energy sources to reduce dependence on imports.
Value-added manufacturing
The article emphasizes the importance of value-added manufacturing for Ghana's economic development. It cites the example of Vietnam as a country that has successfully pursued an export-oriented approach focused on manufacturing and integration into the global supply chain. The article suggests that Ghana should strive for similar progress in the manufacturing sector.
Education
The author highlights the importance of high-quality education, specifically business education, in developing the necessary skills for industrialization and global competitiveness. The article praises the Accra Business School for its practical and job-centered approach, emphasizing the need for more business schools in Ghana and Africa to prioritize creating business leaders who can drive economic growth and job creation.
Mr Avle calls for alternative approaches to Ghana's economic development, emphasizing the importance of food sovereignty, energy sovereignty, value-added manufacturing, and high-quality education. And he suggests that Ghana should focus on long-term structural changes rather than short-term IMF programs to break the cycle of reliance on external financial assistance.
