An Economist, Dr. Kofi Amoah has criticised government for resorting to the International Monetary Fund(IMF) for a bailout as a result of the economic challenges.
Ghana is expecting about $940 million from the IMF over a three-year period to rescue Ghana’s ailing economy but Dr. Amoah believes the programme may not be beneficial to Ghanaians.
[contextly_sidebar id=”KWuEiFbIlYtRm5wMHU7YnKCPNz11jPyx”]Speaking on the Citi Breakfast Show, Dr. Amoah described the move as a “mistake.”
He said government is unable to settle its debts because it does not invest funds secured from other partners into businesses that will generate more revenue for the country.
“There is nothing wrong in borrowing money so long as you are going to use the money and invest properly….our currency keeps weakening because you need to pay back the loans that you got but you use the money to do things that are not productive, that are not returning anything in the short term so you have to keep borrowing to pay for the loans that you got the year before and the year before.”
He described the Finance Minister’s decision to secure another $1 billion through a Eurobond as a ponzi scheme- a fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned by the operator.
Dr. Amoah’s comments were made a day after the 2016 vice presidential candidate of the main opposition New Patriotic Party (NPP) Dr Mahamudu Bawumia criticised the Mahama-led administration for seeking refuge in the Bretton Wood institution when it could have avoided it.
The 2016 Vice Presidential Candidate stated at the public lecture at Central University College that : ““Any economic and financial programme is only as good as the data used to formulate the programme. Credible data provides the basis of the analytical framework to respond adequately to economic challenges.”
“If you have a make-believe data you will end up with counter-productive or inadequate responses to economic policies. If your data is not credible, the anchor cannot hold. With make-believe data as the basis, the best you can achieve is make-believe results which will soon be exposed as we are witnessing currently,” he added.
But commenting on Bawumia’s analysis, the Economist said “whether you believe in Seth Terkper or Bawumia is not the issue. The fact of the matter is that we’re overly indebted.”
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By: Marian Efe Ansah/citifmonline.com/Ghana