According to Mr. Seth Tekper, the current economic crisis does not support the implementation of policies such as the Free SHS, and that all capital-intensive projects should be reviewed immediately.
“I am going to use the Free SHS, unfettered free SHS, I am free to say it because in 2017 I tweeted and said unfettered free SHS was attractive but cannot be achieved. Ghana cannot conduct unrestricted free SHS,” he stated.
He also stated that the IMF agreement will impose spending constraints. So, if the flagship policy is suspended, the funds raised can be used to build roads and hospitals.
“If we have a project that we have agreed to finish in three years, I believe we can put it on hold for a year until we improve the situation…for example, some roads or some hospitals.”
The government and the Bretton Woods Institution announced a Staff-Level Agreement on economic policies in a joint press statement on Monday, December 12.
This will be backed up by a new three-year arrangement of around $3 billion under the Extended Credit Facility (ECF).
According to a fund statement, the decision was influenced by the government’s strong reform program aimed at restoring macroeconomic stability and debt sustainability while protecting the vulnerable, preserving financial stability, and laying the groundwork for a strong and inclusive recovery.
The staff-level agreement, however, is subject to IMF Management and Executive Board approval, as well as Ghana’s partners and creditors providing the necessary financing assurances.
Meanwhile, the government announced that it will suspend debt service payments on certain types of external debt, including Eurobonds, commercial loans, and the majority of bilateral debt.
According to the government, the goal is to bring the country’s unsustainable debt level under control, according to a statement from the Ministry of Finance.