Cedi fall: Don’t stand aloof; announce confidence-building measures ahead of IMF programme – Kwakye

The Government of Ghana must immediately announce austerity and confidence-building measures ahead of the International Monetary Fund (IMF) program, Director of Research at the Institute of Economic Affairs (IEA) Dr. John Kwakye has said.

He stated that the austerity and confidence-building measures will boost the strength of the Cedi as negotiations with the Fund go on.

“Our leaders should understand the power of the markets to drive the exchange rate. The President and the economic management team shouldn’t stand aloof while the cedi continues to slide irretrievably.

“They must immediately announce austerity, confidence-building measures ahead of the IMF program,” he tweeted.

The government is seeking support from the IMF to help it deal with the situation.

An IMF team, led by Stéphane Roudet, met during October 11-19 in Washington, DC with Finance Minister Ofori-Atta, Bank of Ghana Governor Addison, and their teams, to continue discussions on a possible IMF-supported program.

At the conclusion of the meetings, Mr. Roudet issued the following statement: “The Ghanaian delegation and IMF staff had very fruitful discussions on the authorities’ post-COVID program for economic growth and associated policies and reforms that could be supported by a new IMF arrangement.

READ MORE: Cedi-Dollar ratio: We need a paradigm shift; same strategies aren’t working – Forex Bureau operators

“We made good progress in identifying specific policies that would restore macroeconomic stability and lay the foundation for stronger and more inclusive growth. The IMF team and the Ghanaian authorities remain fully committed to reaching an agreement on a framework and policies for an IMF-supported program as soon as feasible. Discussions will continue in the weeks ahead, with a follow-up mission to take place expeditiously.”

Finance Minister Ken Ofori-Atta was hopeful that the IMF will approve the program by end of the year.

He told TV3’s Paa Kwesi Asare in an earlier interview on the sidelines of the annual meetings of the IMF and the World Bank in Washington DC that the Fund is motivated to close the deal by end of the year.

“…To get us close to a staff level agreement as possible so that we can incorporate all of our decisions also into the budget so there will be no reversal and therefore, by the year ending, hopefully, the board will approve.

Do you see that happening? he asked.

In response, he said “We have to make it happen, the Fund is very motivated, we are 24/7, we will stay a few more days after this annual meeting and ensure we make solid progress going forward.

“I am excited about where we are, which therefore means that if we complete it by end of the year, disbursements from the fund which replace what we would have done going to the international market. Clearly, in my mind, there is no need for speculation as to where the currency should be.”

Earlier, Mr. Ofori-Atta assured at a press briefing on Wednesday, September 28 the fast-track negotiations with the IMF to ensure key aspects of the program are reflected in the 2023 budget statement.

“In line with the President’s dialogue with the IMF Managing Director, Kristalina Georgieva, negotiations will be fast-tracked to ensure that key aspects of the program are reflected in the 2023 Annual Budget Statement in November 2022,” he said.

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Source:3news.com