Chief Executive Officer for the Association of Ghana Industries (AGI), Seth Twum-Akwaboah has backed the government’s decision to seek economic support from the International Monetary Fund (IMF).

He said although the decision is “unfortunate,” the current economic circumstances present the country with no other choice.

“I wouldn’t say we are so excited about going to the IMF. However, under the current circumstances, we don’t have much choice,” he said on the Super Morning Show on Wednesday, July 6, 2022.

He explained that the country has encountered serious economic challenges which urgently need an intervention.

“If you look at the past few months, all the macro-economic variables are in serious difficulties. Inflation rate is going up, policy rate is at 19% which means borrowing, the lending rate is at 25%, and oil prices are going up. We have serious challenges in the macro-economic environment and stability is very critical,” he stressed.

He was contributing to discussions on the government’s decision to seek an IMF bailout to restore confidence in the economy.

The decision has been greeted with mixed reactions. While some have commended the decision, labour organisations, including the Trades Union Congress (TUC) have cautioned the government against the decision.

According to the Union, the decision may impose more economic hardships on the citizenry.

Director of Labour Research and Policy Institute at the Trades Union Congress (TUC), Dr Kwabena Nyarko Otoo, fears the government’s decision to seek financial support from the IMF may not augur well for workers.

He said previous IMF interventions have not been able to sustainably address the country’s economic challenges, and as such any move will only worsen the country’s growth.

But wading into the conversation, Mr Twum-Akwaboah maintains the decision is a step in the right direction since it will bring about economic stability.

He, however, noted that an IMF bailout is a temporal solution to the country’s economic woes.

“Now, whether it will solve our problems, what I know from the previous experiences we have in the past is that we always run to the IMF when we are in difficulty. The IMF is not necessarily not going to transform and change the structure of the economy.

"The situation we find ourselves in and previous experiences clearly show that IMF coming in and coming in at a time when the country is in crisis is not going to help with the transformation agenda. It’s only going to help us stabilize.

“Normally, if we had a clear plan and then went to the IMF and said this is our transformational agenda and we need the support of this nature to help transform our economy that’s different but we most times go to the IMF when we are in crisis and when the IMF comes in they only come in to stabilize the system. So we realise that even though we have been to the IMF, the structure of the economy has not changed,” he said.

He believes many gains will be made if the structure of the economy is changed.

“At this point, we don’t seem to have much choice. An IMF programme has some positive implications for us in terms of stability but it’s not going to transform our economy. We need the stability but I think it’s also very important that the kind of negotiation we do this time around is critical,” he said.

 "So, let’s go for the IMF to help with the stability but we shouldn’t lose sight of the transformational agenda,” he added.