Ghana’s 17th March to IMF, any hope?
Ghana’s leadership have decided to participate in a 3 years IMF program.
The Hot Seat of NSG News looks into the criticisms and disadvantages of participation in IMF programs.
The move by Ghana’s leadership to the IMF is the 17th time.
Irrespective of the number of times Ghana participated in IMF programs, there is no significant change in Ghana’s economic affairs except infrastructural deficit across all sectors and institutions in Ghana.
The downward change in the trajectory of Ghana’s economic outlook which is adverse to Ghana’s infrastructural development across all sectors is as the result of IMF programs over the years and the 17th program will not be any different – NSG News states.
This is supported by the statement by Nobel Prize winner Joseph Stiglittz “IMF is the primary culprit for the failed development policies implemented in some of the world’s poorest countries” – Could Ghana be one of them?
Brief Background of IMF – IMF started on the 27th December 1945 with 29 member states and by 1946, IMF’s membership grew to 39 member states.
IMF aims to promote global economic growth and financial stability. Encouraging international trade and reduce poverty around the world – Question, is this Ghana’s experience?
IMF also aims to increase productivity, job creation and economic wellbeing – is this Ghana’s experience for being IMF member?
IMF is to work to achieve sustainable growth and prosperity for all of its 190 countries and help promote financial stability and monetary cooperation – Could poorer countries attest to this as a fact?
IMF is located in Washington DC United State of America.
One-question remains, who controls the affairs and decisions of the IMF?
One main disadvantage identified is, IMF programs causes long-term dependency than to act as a short-term assistance.
Disadvantages of IMF – source: accountlearning.com
- Passive approach by IMF
- Unsound policy for fixation of exchange rate by IMF
- Non-removal of foreign exchange restrictions by IMF
- Inadequate resources
- High interest rates by IMF
- Stringent conditions by IMF is one of its disadvantages
Conditional clauses imposed by IMF:
The conditional clauses imposed by IMF after 1995 are stiff which big disadvantages of IMF are. To state a few:
liberalizing trade by removing exchange and import controls;
eliminating all subsidies so that the exporters are not in an advantageous position in relation to other trading countries; and
Treating foreign lenders on an equal footing with domestic lenders. The fund maintains a close watch on the activities of the borrowing country related to monetary, fiscal, trade and tariff programmes. IMF’s intervention in the domestic economic matters of the borrowing countries places them in a difficult position. - Failure to play an effective role in international monetary matters is one of the disadvantages of IMF:
- Failure to tackle East Asian currency crisis is one of the disadvantages of IMF:
- Domination by rich countries is one of the disadvantages of IMF
With all the disadvantages and no evidence of significant change in Ghana’s economic affairs, should Ghana as a natural resource giant be approaching IMF? Some of the possible outcome of this IMF program for Ghana will be her developmental projections and infrastructural capacity building will be cancelled and become things of the past and ongoing projects may be abandoned.
Could it be that, IMF is set up in a way to disadvantage natural resource rich countries who are labelled as third world or poor countries to the advantage of the dominant countries? A question for us all to explore as Ghana embarks on its 17th March to IMF. Watch video bellow.
