IMF Bailout last option – Osaafo Maafo

• Posted on August 5, 2014August 5, 2014
• by Nana Kwesi Coomson
• Comment

Osaafo Maafo has stated that an International Monetary Fund (IMF) bailout, which the government intends to seek, is the only option in the face of a biting financial predicament.

Speaking on Oman FM radio yesterday following the decision to turn to the Bretton Wood institution by a previously reluctant government, he said besides making funds available to a cash-strapped system, it would ensure that those in charge adhere to a regimen of financial discipline, which has been lacking in the past years.

“The IMF would only rescue a cash-strapped country after administering various disciplinary measures such as ensuring that the payroll is bereft of ghost workers and avoiding unfeasible projects,” he said.

“I am not against government turning to the IMF in as much as it would restore some level of fiscal discipline in government, the lack of which has sent us to the state in which we are today. When you are receiving an IMF treatment, you can’t spend recklessly as you have always done,” he said.

The money being used to salvage our ailing economy is sourced from other people’s taxes and revenue and so it behooves the IMF to ensure that such funds are not expended recklessly.

“I am happy government has taken this decision even though the conditionalities would come with hardships. Let us pray that government would listen to the IMF. The home-grown policy to salvage the ailing economy has not been helpful,” he said.

“If they had listened to us when we counseled them from 2009 the situation we are in now would have been obviated. They decided to insult me when I cautioned them. In economic matters insults do not count. It is not about equalization and politicization which they resorted to,” he said.

On the way forward, he said “let us accept that we are in crisis. If we do so then we would attract the sympathy of others who can come to our aid. Let us examine the bonded warehouse issue, our revenue, ensure that our procurement law works and avoid the inflation of figures. What we cannot afford let us not pretend we can. We should minimize on loans which are unhelpful to our cause.

“When the import bill is huge and there is low inflow, the value of the currency would depreciate,” he added.

Mr. Osaafo Maafo was a Finance Minister under the previous Kufuor administration.

His tenure saw a massive improvement in the country’s fiscal management. From 1996 to 2008, the Civil Engineer was MP for the Oda constituency.

His remarks come on the heels of the government’s eventual decision to bit the bullet and turn to the IMF to rescue it from the current fiscal crisis.

BY A.R. Gomda