Former Finance Minister, Seth Terkper, has jumped to the defense of the International Monetary Fund and the World Bank for their numerous warnings to the government over the poor fiscal state of the Ghanaian economy.
The IMF in its 2019 Article IV review warned the government to cut its rising debt and budget deficit to sustainable levels.
Again, the World Bank President in 2020 urged the country to join the G20 Covid-19 Debt Service Suspension Initiative.
The government, however, did not listen to all these advises, therefore, leading to the economic challenges facing the country today
Some Ghanaians also believed the two Bretton Wood institutions contributed to the challenges facing the economy today.
But in a tweet, Mr. Terkper, said the Fund and the World Bank cautioned the country about the potential serious risk of debt distress if it does not bring it house to order.
“We must give these agencies their due. They gave enough warning in 2019 Article IV [IMF used this to revise our deficits and debt], 2020 COVID-19 loan report and Article IV that warned of serious risk of debt distress”.
“In 2020, the World Bank President too asked us to join the G20 Covid-20 Debt Suspension Initiative. We shoved it aside without a domestic or external alternative. As market players, we kept borrowing till the door shut, despite the rapid downgrades by the rating agencies to junk status”.
Terkper calls for national consensus over debt exchange
On the debt exchange, Mr. Terkper called for national consensus, saying, without that the situation will worsen.
“It’s time to strive for national consensus, else the situation worsens. That call came from others a long time ago, including Mr. Pianim, JM and others. The government leads and we need the IMF, World Bank, AfDB etc. at the table. Which takes to my next points.”
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