Ghana paid high price for delayed IMF programme – Prof Bokpin

Professor of Finance at the University of Ghana, Godfred Bokpin, has stated that Ghana’s delayed decision to seek support from the International Monetary Fund significantly worsened the country’s economic crisis and resulted in what he describes as one of the most expensive IMF programmes in Ghana’s history.

Speaking on Newsfile on Saturday, May 16, Prof. Bokpin argued that the previous government failed to act promptly despite clear warning signs of economic distress, ultimately forcing the country into a more painful and costly economic recovery process.

According to Prof. Bokpin, Ghana’s economic fundamentals by the third quarter of 2021 clearly indicated the need for IMF intervention. However, the government at the time delayed approaching the IMF until the economy had deteriorated significantly.

He explained that countries facing similar economic pressures, including Kenya, acted earlier by entering IMF-supported programmes and were therefore able to avoid some of the harsh economic measures Ghana later implemented.

“The current programme that we are on, it is our considered view — and we said this before — that if the government had shown a little more proactiveness in reaching out to the IMF, we could have avoided domestic debt,” Prof. Bokpin stated.

He further noted that Ghana and Kenya previously shared similar economic indicators, but Kenya’s earlier engagement with the IMF helped stabilize its economy before conditions worsened.

“We were almost at the same economic fundamentals as Kenya. Kenya went in for a programme, but we delayed and that worsened the economic fundamentals. Eventually, we had to go for perhaps the most pricey IMF programme in all our history,” he added.

Prof. Bokpin argued that the cost of Ghana’s IMF programme extended far beyond traditional fiscal adjustments, with ordinary citizens and institutions bearing the brunt of the economic reforms.

He pointed specifically to the controversial Domestic Debt Exchange Programme (DDEP), expenditure cuts, and the financial pressures placed on public institutions, including the Bank of Ghana.

According to him, the long-term effects of these measures could take years for the country to fully overcome.

“If you look at the price that we have had to pay for these gains, it will take us years to recover, essentially, from the price we have had to pay,” he said.

The DDEP, introduced as part of Ghana’s debt restructuring efforts, required bondholders to exchange existing government bonds for new ones with revised terms, a move that generated widespread debate among investors, pensioners, and financial analysts.

Prof. Bokpin also expressed concern over the financial losses recorded by the Bank of Ghana, saying the issue remains unresolved despite explanations from government officials and the IMF.

While acknowledging that central banks are not necessarily profit-driven institutions, he stressed that the financial consequences of policy decisions must still be scrutinized carefully, especially when taxpayers may ultimately absorb the burden.

According to him, plans to recapitalize the Bank of Ghana effectively mean the public will shoulder the cost of the institution’s losses.

“The recapitalisation of the Bank of Ghana means taxpayers will eventually bear the burden, and that makes it a matter of national concern,” he indicated.

Prof. Bokpin’s comments add to ongoing national discussions about Ghana’s economic recovery, debt restructuring efforts, inflation, and fiscal discipline under the current IMF-supported programme.

Economic analysts continue to stress the importance of proactive policy decisions, stronger fiscal management, and timely interventions to prevent future economic crises and reduce the burden on citizens.