Doubling your loan request won’t change anything – Prof. Hanke to government

President Nana Addo Dankwa Akufo-Addo and Prof. Steve Hanke
President Nana Addo Dankwa Akufo-Addo and Prof. Steve Hanke

Steve H. Hanke, a professor of applied economics, Johns Hopkins University, USA, has stated that Ghana’s double loan request from the International Monetary Fund (IMF) will not solve the dire economic crisis of the country.

According to him, Ghana’s current IMF bailout will fail as the rest has failed in the past.

Prof Hanke advised the West African country to mothball its central bank and install a currency board to deal with the current economic crisis.

He indicated that Ghana’s current inflation as measured from Hanke’s Inflation Dashboard reads 63%.

“In July, Ghana’s Pres. Akufo-Addo passed the begging bowl to the IMF – for the 17th time. Today, GHA’s inflation surges at 63%/yr by my measure. To stop it, a currency board is what a good Money Doctor would prescribe.

“Ghana has DOUBLED its loan request from the IMF to $3 billion. SPOILER ALERT: Requesting more money won’t change a thing. Like Ghana’s past 17 IMF programs, a new one will fail. Instead, Ghana must mothball its central bank & install a currency board,” Prof Steve Hanke’s August 13, tweet read.

Bloomberg reported that Ghana’s loan request from the IMF has been doubled from $1.5 billion to $3 billion.

“Since negotiations for the program are starting now, it’s too early to comment on the final form the program will take,” an IMF spokeswoman said in an emailed response.

“The Extended Credit Facility for low-income countries is the Fund’s main tool for medium-term support for countries facing protracted balance of payments problems, similar to Ghana’s. The duration of such an arrangement is between three to four years, and extendable to five years,” Bloomberg reportage added.

The Government of Ghana, on July 1, announced a u-turn of an initial decision of not resorting to the IMF for support despite economic hardship hitting the citizenry.

Consequently, a team from the IMF arrived in Ghana to start negotiations with the Ghana government. The government has since maintained to secure a good deal for the country.

Source: GhanaWeb


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