IMF by itself can’t create prosperity; they come in for stabilization, balance of payment support – Alan

There is no evidence that the International Monetary Fund (IMF) by itself can create prosperity for nations, Trade and Industry Minister Alan Kyerematen has said.

He explained that the IMF comes in purely for stabilization, balance of payment support and liquidity support.

Mr Kyerematen said these at a meeting with private business owners on in Accra Monday July 4.

He said “We have come from quite a long distance, those of us who went round the country with the President campaigning around the country [in 2016], the circumstances in which we found ourselves were very difficult. Static growth, high inflation, high debt, all the indicators of an economy that it is in severe distress were apparent at that time. But the point is that, we did something which probably we have not explained quite eloquently to people.

“[Ghana] was in an IMF programme when [NPP] took over. We decided that we had no choice but to complete the programme. But whiles we took the decision to complete, our strategic objective was to exit because again, there was no evidence where the IMF itself and its programmes can create prosperity for you. So IMF comes in purely for stabilization, for balance of payment support and liquidity support.

“So, whiles we agreed to remain with the programme, we try to work ourselves out of the programme and that is what we did. So, again, the evidence is there, within two years we were able to meet all the conditionalities and the requirements for the programmes and we were about to exit with our chest out.

“I remember, Madam Christine Lagarde [then Managing Director of the IMF] very uncharacteristic of the World’s central bank, she actually was praising us when we were exiting. I am making this point because whiles we agree and decided that we would keep to the programme through fiscal consolidation and prudent expenditure management and control, we decided also at the same time to embark on an aggressive transformation programme.

“It is important that we understand that , whiles we were ensuring that we achieved fiscal consolidation with the IMF programme, at the same time and we needed a lot of courage that, whiles you are doing that you decide to embark on a transformation programme because, if the transformation does not occur, you will go back to IMF, and to get into the substance of the transformation programme, it requires a lot of money.

“There is no way you can achieve transformation without resources, that was one of the main reasons why we had no choice but still to borrow to fund the transformation agenda that we were pursuing in parallel. It is clear, agricultural transformation, Planting for food and jobs, planting for export rural development, very comprehensive porgramme 10-point agenda for transformation.”

The Akufo-Addo government is heading to the IMF for support.

On Friday July 1 President Nana Addo Dankwa Akufo-Addo gave instruction to the Finance Minister Mr Ken Ofori-Atta to commence the engagements with the IMF following a telephone conversation between the President and the IMF Managing Director, Miss Kristalina Georgieva, conveying Ghana’s decision to engage with the Fund.

The Ministry of Information announced this in a statement.