The country should no longer continually turn to the International Monetary Fund whenever it experiences economic difficulties, according to former president John Dramani Mahama.
He claimed that the country’s citizens no longer had confidence in its democracy and that instability was a result of the “going and coming” to the IMF.
In an interview with VOA’s Straight Talk Africa program, Mahama said that the current return to the IMF has been prompted by two problems, namely excessive borrowing and revenue outpacing expenditure.
He believed that the country now had a responsibility to achieve fiscal consolidation as well as reduce debt to levels that are manageable.
“This administration has two issues. One is macroeconomic instability as a result of massive revenue deficits. Revenues are not operating effectively. The second issue is that they went on a borrowing binge and increased our debt to unmanageable heights.
“The World Bank just recently visited and stated that we have two concerns since our debt to GDP is almost 104. First, to achieve fiscal consolidation; second, to reduce debt levels to levels that are manageable. They are therefore faced with it, he conceded.
Mahama hinted that in order for the economy to prosper, problems like the battle against corruption and the strengthening of state-owned institutions needed to be addressed.
The current return to the IMF to achieve debt sustainability and policy credibility, he said, should signal the beginning of governments managing the economy carefully.
“The environment in which the economy is placed. It cannot exist in a vacuum, so steps must be taken to foster an atmosphere where the economy may flourish. Some of them include challenges with governance, bolstering state-owned institutions, the battle against corruption, and a host of other concerns that help to foster a prosperous economy.
“I believe that we should start from there and retain that caution when we embark on this program, reduce debt levels to manageable levels, and get the bridging facility in order to establish policy credibility and win back the trust of investors in Ghana. This should be the last time we visit the IMF because returning and visiting causes instability throughout the entire system and erodes public confidence in our democratic system, according to Mahama.
After the economy took a turn for the worst in July, Ghana opened up communications with the IMF. The decision was made as a result of rating agencies like Fitch, Standard and Poor, and Moody’s downgrading the economy and preventing the nation from participating in the global financial market.
With this effort, Ghana is asking for a $3 billion program over three years. The program is expected to assist in putting the nation back on a road of advancement, according to the authorities.