The Resident Representative of the International Monetary Fund (IMF), Mr. Arnold McIntyre told representatives of industry and civil society organizations at a meeting in Accra on Wednesdays, that they should brace up to pay realistic prices for energy; since government cannot continue to use its budget to subsidise energy. The IMF contends that utility tariffs in Ghana are some of the lowest in Africa and must be reviewed to make for realistic charges. At press time On Wednesday Public Agenda had gathered that the life line system through which consumers of electricity and water were to pay higher rates only if they used the utilities beyond a certain threshold of the base rate was said to have been scrapped. This makes it very likely that utility prices could go up in the coming months. The IMF Representative argued that even as there was the need for safety measures to safeguard the poor, it remained a must that government spending is not thrown overboard by over subsidization. He asked the question as to how energy would be priced in Ghana to safeguard the vulnerable, while at the same time holding government spending in check. He was sure, as other countries have done; Ghana was capable of devising a means to tackle the problem. He thus suggested to industrialists as well as civil society groupings to advise government accordingly. He said in view of the prevailing global circumstances, Ghana has got some tough decisions to make, critical among which was the energy issue. "The question of energy," he said, "has to be squarely faced." But the Executive Director of the Integrated Social Development Centre (ISODEC) Mr. Bishp Akolgo responded by saying that in making those tough choices the IMF would have to give government a breathing space. He said government cannot make those difficult choices when the IMF comes "breathing down on their neck." Mr. Akolgo said Ghana has to find ways of targeting until the much expected gas is brought in to lower the cost of energy production and of consumption. In a position paper titled the "Reform of IMF under Article IV, CSOs led by ISODEC are arguing that the IMF does not have the capacity to delve into poverty reduction and development arena and that its policy interventions in development policy area have been largely harmful so far. "Aid and all development issues should be channeled through the appropriate multilateral and bilateral agencies that have the experience and capacity to handle them", the paper said. The CSOs further argue that there must be wide ranging changes in the content and application of the IMF's policy conditionalities and policy advice. On his part, a member of the Executive Council of the Association of Ghana Industries (AGI) Mr. Robert Akwasi Kwakyi Nketia observed that indeed, members of the industrial community were not opposed to paying reasonable rates for the utility since that could be in their own interest. He however wanted two issues to be addressed if they were to do so. The inefficiency in the system, for him, is too much and thus needs to be addressed. Also, the Managing Director of Raktia Holdings Ltd. wanted the issue of unfair competition between Ghanaian goods and their imported equivalents to be addressed. He insisted that countries that might be seen to be paying higher tariffs actually have measures that bring down the production cost in their manufacturing sectors, a reason why goods from such countries always out-compete Ghana's. Submissions from other participants agreed that indeed government could not continue to throw a chunk of its revenue into the energy sector. But Mr. Wilson Atta Krofah, President of the Ghana National Chamber of Commerce and Industry would rather non commercial users paid more. He argued that such users would be more responsible in their use of the resource if they knew they had to pay more for it. He cited instances where people leave air conditioners and other electrical gadgets on for hours on end without any regard for the wastage they are creating. Indeed, the IMF urged the previous administration to "return to an automatic price adjustment mechanism to maintain cost recovery pricing and depoliticize the price-setting process to cushion the impact on poorer households." The meeting discussed other matters that had a bearing on Ghana's economy and the concerns the private sector had about the direction of government policy vis-a-vis their own industry. The IMF representative said they were meeting with other stakeholders because they had changed from relying solely on their discussions with government in making policy recommendations. Mr. McIntyre said Ghana has a lot of potential for growth even though inflation and deficit spending are on the high side. What is good for Ghana, he noted, is its relatively better democratic credentials. In his view, it is not by accident that president Barack Obama has chosen to come to Ghana before other African countries. He thus advised that Ghana recognizes its strengths and use it to leverage itself. A Senior Economist of the IMF, Mr. Louis Erasmus wanted to know from participants whether avenues existed for dialogue with government and whether they accessed government information easily. Here, most of them agreed that "the business community is party to the budget" although they "previously did not have the capacity to track the budget." But Mr. Cletus Kosiba of the Association of Ghana Industries admitted that the BUSAG fund has helped in that regard. Source: Public Agenda