Sep 30



AN IMF press release reports that a mission from the Fund visited Bamako, Mali, from September 11 to 25, for discussions in preparation for a review of the Mali government’s economic programme supported under the IMF’s Extended Credit Facility, approved in December 2013.
The Mission also found that inflation remains low, and that for 2015, the projections are for “real growth to continue at 5.5 percent and inflation to remain [at] well below the central bank’s 3 percent target”.
The IMF press release then reported that “a resolution was found for the issues raised by the extra-budgetary spending—on a presidential plane and a military contract—which delayed the first review, originally scheduled for June 2014. It includes: publishing the two independent audit reports on these transactions; reporting on the sanctions process; redressing the over-billing in the military contracts; subjecting future military procurement to stringent controls; incorporating all extra-budgetary spending in the budget, and stopping such practices in the future.
The muted reference made by the press release to the resolution of the problem created by “extra-budgetary spending on a presidential plane and a military contract” will infuriate not just Malian citizens, but IMF watchers everywhere, who had hoped that the Fund was turning over a new leaf and would henceforth show ruthless transparency when dealing with corrupt governments in the world. In Mali’s case, a major scandal had arisen over the purchase, by President I B Keita, a few weeks after he had taken office, of a Boeing 737 presidential jet, costing $40m.
Many Malians regarded the purchase of the jet as insensitive, to say the least, in that it demonstrated that the new President was more interested in his own personal creature comforts than in trying to resettle the millions of Malians from the north of the country, who had had to flee to the south to escape murder and torture at the hands of Islamic extremists, who had seized parts of the north.
The Malian army was also finding it difficult to obtain adequate arms and equipment to drive out the extremists. France and other Western governments were in fact putting in their oar, at a cost of valuable lives, to help Mali out of its trouble. Yet all its President could think about was luxurious transportation! How he took money from the coffers of the country to make the purchase was itself a mystery to many Malians — including some of his own Ministers.
In addition, the President had spent $200 million on military procurements without using the laid-down procurement procedures. Most people in Mali suspected that he and his cronies had benefited from the purchases, and they were pleased when the IMF decided earlier this year to suspend its agreement with Mali. But now, all is smooth again – without the Fund specifying exactly what the President had done to change the Fund’s mind and whether there would be any punishment of those guilty of abusing the process of government procurement rules.
For us in Ghana, the IMF’s position in Mali only goes to show that if we expect international organisations to support our demand for transparency from our Governments, we shall be deceiving ourselves. Surely, the IMF office in Accra must have furnished the Fund with information regarding the one billion or so Cedis said to have been pumped into GYEEDA? What has that funding managed to produce? What about the money to SADA? And the judgement debts, many of which are coming into the public domain for the first time ever? And what about the other payments for services not performed? Did all those corrupt items of expenditure not contribute to the enormous deficits which have been sinking the Cedi once again?
Yet, as the negotiations between Ghana and the IMF commence, all we can assume will be taking place will be discussions on how to cut down the country’s huge public sector wage bill to size; how to eliminate the alleged subsidies paid to make the public utilities affordable; and how to end the under-collection of taxes.
We shall not hear much about seizing the properties of GYEEDA and SADA top guns and selling the properties to retrieve money back into the public chest. Nor shall we hear about cutting down the size of the Government itself, or reducing the burden placed on the economy by servicing Government leaders at the public expense.
Now, hovering over Ghana’s team to meet the IMF is the new Senchi Consensus” leader, Dr Kwesi Botchway, a man who has spent more years dealing with Ghana’s finances than any other individual. He will be able to talk to the IMF all right – after all, it was he who took Ghana to the IMF when the Cedi was worth 2.75 to the US dollar, and ended up reducing it to such a low rate of exchange — with so many noughts at the end — that a successor government had to artificially drop many of the noughts to make the currency less unwieldy!
One question Kwesi Botchway should answer is this: “Ei, so Kwesi, the people currently in government have so much regard for you, do they? Kwesi, they must respect you a lot — for reasons best known to themselves. Now, tell us, Kwesi –if they have such a high regard for you, why did you not warn them to stop incurring GYEEDA-type wasteful expenditure, as it would reverse any gains you made in the earlier years of co-operation with the IMF, as well as those subsequently made by successor governments? Did you advise them to cut down on the size of the government administrative setup? Did you not tell them that the deliberate and careless depreciation of one’s currency leaves a bad taste in the mouth that lasts for years and years and years? Huh, Kwesi?”-
By Cameron Duodu


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