The International Monetary Fund (IMF) has finally agreed a $1 billion economic bailout program with Ghana. The deal was reached on Wednesday in New York but the agreement is however subject to approval by the IMF Board. Ghana is hoping to restore its ailing economy within the next three years on the advice of the IMF. In early February this year, government said it had concluded most of the outstanding issues concerning the negotiations and the deal will soon take off. Civil Society Organizations have said that the country’s economy might collapse if emergency measures are not taken by the government to seek external intervention. But critics of the IMF program have said that it will further worsen the country’s ailing economy. Opposition Spokesperson on Finance at Ghana’s Parliament, Dr Anthony Akoto Osei has said that people should brace up for harsher economic times following the government turning for an IMF bailout. "We are in for tough times, in the short term there will be difficulty. Utility prices will go up as a result, and the government will be asked to cut down expenditure by the IMF", Mr. Osei told Joy News.
But the Managing Director of the IMF, Christine Lagarde has downplayed such assertions that a bailout programme from IMF could see Ghana go through another phase of hardship. "There is always in partnership a bit of hardship to go with it. If the Fund is called upon to help, it is that the country feels that it cannot decide certain things on its own. It needs backup support, financing to make sure that it has access to enough funding to finance itself", she said. She added that it is in the interest of IMF to see Ghana restoring its fiscal discipline and macroeconomic stability and insisted that the IMF has changed its policy, moving away from the structural adjustment programme. "Structural adjustments-that was before my time. I have no idea what it is. We do not do that anymore. No, seriously, you have to realize that we have changed the way in which we offer our financial support. It is really on the basis of a partnership", Mrs. Lagarde added. The Ghanaian government requested last year for an IMF bailout after it struggled with the economy. Ghana’s currency fell about 40% against the major trading currencies, making it the worst-performing currency in Africa. Inflation shot up from a single digit to almost 15%, bringing a sharp rise in goods and services in the country. Ghana first sought IMF help in the 1980s when the country was under military rule. The implementation of the IMF’s program then saw subsidies wiped, public sector jobs cut and low wages for workers.