President John Dramani Mahama has dismissed assertions that the government sought a bailout from the International Monetary Fund (IMF) due to the failure of its home-grown solutions.
He explained that government made the decision because there was the need for policy credibility and confidence from the international financial institutions to restore economic stability and growth.
The President noted that turning to the IMF was to gain the seal of approval from the Bretton Wood Institution for the country’s home-grown measures.
Answering a question about the decision to join the Fund’s programme at GE-Economist event as part of the US-Africa Leaders’ Summit in Washington DC, President Mahama stressed that there will be no significant changes in Ghana’s domestic policy.
“We are going to discuss with the IMF how we can turn the deficit around quickly and create the kind of confidence even in the short-term narrative,” he stressed.
The GE sponsored event focused on “Africa Ascending: Powering Inclusive Growth” brought together a number of global leaders including government officials, business leaders, NGOs, policy experts and entrepreneurs at the forefront of solving the world’s energy challenges.
“We are taking subsidies off fuel and the utilities, streamlining the spiraling public sector wages, we are working to improve revenue collection and efficiency in collecting taxes and also reforming the public financial management system,” the President stated.
According to President Mahama, there is a grave misunderstanding about Ghana’s potential due to the fixation on the short-term narrative.
“As much as we have tried to draw attention to Ghana’s potential, there is too much fixation with the short-term narrative; yes, there has been a deficit and inflation has gone up but we have put in measures to turn that around.
Deficits are not turned around just in a year or two… the deficit will be brought under control by 2017,” he stated.
He however acknowledged that the unfortunate international narrative on the short-term challenges of Ghana was because the country has been “one of the few most potential emerging markets in Africa in recent times.”
President Mahama called for a change in the international narrative about Ghana because the nation’s medium term prospects for growth are good.
He disclosed that Ghana would, by the end of August, sign a new deal with ENI concerning the country’s Sankofa field to explore more than a trillion cubic feet of gas in addition to 50,000 barrels of oil daily.
“The potential for growth is therefore good”, he noted.
With GE preparing to kick-start a 1,000MW electricity project and the expected signing on Tuesday of a new MCC compact, which will channel some $300milion towards the improvement of the country’s power sector, President Mahama said the target to attain 5,000MW of electricity generation for Ghana is on course.
