IMF $1b Covid-19 Related Emergency Relief Program: Transparency and Accountability in Government Spending Criticality Important

We thank the IMF for the financial support, but must make sure that its anti corruption measures are fully applied in its Covid-19- related emergency relief programs to ensure that the $US1 billion it has disbursed to the country help the most vulnerable, improve our healthcare sector and support the Covid-19 fight in general. The IMF shouldn’t relax its anti- corruption measures because of the crisis. The scale of the crisis raises the risks and dangers of the theft of public money that should be used to support the Covid-19 fight, rebuild livelihoods and save lives.

I know that the IMF in recent years, has put a renewed emphasis on combatting corruption as part of a broader recognition that resilient economies require good governance, inclusive growth and strong social protection. Corruption and mismanagement of public resources are the major problems affecting our development hence the urgent call on the IMF to quickly include basic measures to reduce the risk of mismanagement and corruption.

The need for government to act quickly and the speed of spending and distractions that may interfere with oversight mechanism can allow government to take advantage of the crisis for its own benefit. The President and the finance minister have already predicted that government cannot achieve the projected growth figure of 7% as a result of the pandemic. Fall in oil prices and the projected high global economic recession will definitely affect the Ghanaian economy, so it is right for the IMF to step in to help, but I am appealing to the IMF leadership to make sure that this rapid disbursement doesn’t come at the expense of basic transparency and effective anti corruption measures that should be required of recipient countries. Already, corruption is affecting government’s ability to provide certain basic amenities such as adequate health care, potable water, schools etc.

The IMF should publish all information related to this program on its website, make sure government furnish it with information about public contracts and also ensure that our procurement laws are strictly adhered to. Government must be made to use open and competitive bidding, and limit the use of sole sourcing. Names and beneficial ownership of companies awarded contracts under this program should be published for all to see. Civil society organisations and good governance organizations should be contracted or encouraged to monitor how contracts are awarded and funds are disbursed to avoid collusion or over pricing.

The auditing by the auditor general of Ghana and other monitoring agencies is the other critical issue. Already, the auditor-general is in court with a the Senior minister over alleged misuse of public funds. Some government officials and communicators are not comfortable with the way the auditor general is exposing corruption in the administration. The IMF should therefore make sure government make all information on how the US$1 billion is spent available to the auditor general and as soon as practicable, to civil society organizations. The whole economy will be at risk if our leaders do not put the fund to good use. This is not time for merrymaking our government must be made to deploy prudent policies and avoid reckless spending as has been the case the last three years.

Time and again, the world bank’s projects and your fund’s programmes fall short because of these weaknesses of independent law enforcement hence the need to partner with civil society organizations to check these negative activities. Unlike with the fund’s standard programs, emergency funds are generally disbursed in lump sums, with limited, if any, transparency, conditions, or reviews. We are in an election year, some very senior members of the ruling party were caught on tape saying their party was in dire need of money for their party’s activities. The ruling party will soon hold its parliamentary primaries across the country so, the likelihood that part of this fund will go into the party’s activities is very high. This is the fear of the opposition, civil society organizations, religious leaders and majority of Ghanaians. The IMF’s conditions, review process, and anti corruption measures are not going to be tied to this fund which is going to give government limitless space to do whatever it wants to do with the fund to the detriment of the populace

Already, normal funding for Sub Saharan African countries have been reasonably favourable in terms of conditions. Debt issuance in the region has been at very high level. But the people do not benefit from these funds because of corruption and mismanagement. Governments do not use the funds for implementation of amenities as required or implement financial stability measures to ensure sustainable outlook. The story is not going to be different if the IMF fail to institute the measures I have mentioned.

In 2015, when our economy faced challenges, the Mahama administration turned to the IMF for a $918 million loan to help stabilize the economy. The money did not come in lump sum but because the administration adhered strictly to the attached conditions, it was able to lift the economy from its low point. We saw improvement in our revenue collection, massive infrastructure development culminating in the slight growth recorded the following year. The IMF and the world bank project between 7 to 8 percent growth in the economy by 2017-18 because of these prudent policies and the huge investments. This is what we want to see with this fund. The lockdown has affected local businesses, created job losses and slowed down economic activities. It is projected that production cocoa which is the mainstay of the economy, will drop sharply, the number of homeless people has increased. Monies channeled into the system should therefore go to these areas to mitigate the situation.

Priority should be given to areas such as health, public procurement, infrastructure, and social security expenditure. We still have almost completed hospitals in bushes abandoned by the current administration because of politics, we’ve recorded low covid-19 cases because of poor testing and inefficient contact tracing systems, PPE is still a problem in our hospitals, allowances for our front line workers including our security personnel another critical issue. Making sure funds disbursed to our government is used judiciously, can reduce the effect of covid-19 on our economy and save lives!

The Executive Board – IMF
Mr Zhang, Deputy Managing Director and Chair, International Monetary Fund