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Former Finance Minister, Seth Terkper, has asked the government to deploy measures to cut down on expenditures as it seeks an International Monetary Fund, IMF bailout.

According to him, doing so will help redirect the economy back onto the path of recovery.

In an interview with Accra-based Joy FM, Mr. Terkper observed that government’s flagship programmes including the Free SHS was taking a huge chunk of it resources.

He said the cost of sponsoring the programme was unsustainable.

“Free SHS in its unfettered form is not sustainable. Your debt is not sustainable, and you’re borrowing. You’re using your whole revenue to cover compensation and interest. You’re borrowing for the past debts that you’ve borrowed to repay the past debt that you borrowed to support free SHS. That’s not a palatable discussion,” he said.

Recounting how the Mahama-led administration dealt with an economic downturn, Seth Terkper said it had to ‘tighten its belt’ in the continuation of some of its flagship programmes.

He indicated that the government then had to scale down on the number of ‘E-block’ schools it was constructing.

“We were in the Fund [IMF], when crude oil prices fell in 2015/2016. [Then,] our flagship programme was the E-schools. We initially stated that we were going to construct 200 schools.

"But when the reality hit, President Mahama indicated that we were not going to be able to complete all the 200, we may be able to do 150 and even with that, we rolled it into 2017, and 2018. We were able to construct about 70 when we were leaving office,” he recalled.

“So that’s the sort of decisions you have to make,” he added.

Background

President Akufo-Addo on July 1 ordered Finance Minister, Ken Ofori-Atta to begin formal engagements with the IMF.

In a statement signed by Information Minister, Kojo Oppong Nkrumah, the engagement will be to invite the Fund to support an economic program put together by government.

"Among other things, the government says the IMF support will provide “balance of payment support as part of a broader effort to quicken Ghana’s build back in the face of challenges induced by the COVID-19 pandemic, and recently, the Russia-Ukraine crisis.”

Meanwhile, the IMF team is expected to arrive in the country July 5 for the first engagement to take place.