IMF bailout: Crises are inevitable, says Seth Terkper
Speaking on The Asaase Breakfast Show on Monday (4 July), the former finance minister Seth Terkper said crises such as the war in Ukraine and COVID are inevitable, adding the world must always be prepared for them
The former Finance minister Seth Terkper has said the rippling effect of the current global economic crisis, especially on Africa, is a clear indication that countries must be prepared for emergencies.
According to the African Development Bank (AfDB), the continent risks sliding into stagflation – a cycle of slow growth and high inflation – as it battles the lingering effects of the pandemic and rising fuel and food prices caused by the Ukraine conflict.
Despite experiencing relatively low death rates compared to more developed regions, Africa was dealt a heavy economic blow by the COVID-19 pandemic.
Speaking on The Asaase Breakfast Show on Monday (4 July), Terkper said crises of such nature are inevitable, adding the world must always be prepared for them.
Last week, President Nana Akufo-Addo directed his Finance Minister Ken Ofori-Atta to start engaging the International Monetary Fund (IMF) for 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 crises.”
Don’t belittle crises
Terkper said it was unfortunate the New Patriotic Party (NPP) then in opposition “belittled” the crisis that hit the John Mahama administration, adding the turn of events should serve as a big lesson for everyone.
“There seem to be a narrative that the crisis that Ghana faced in 2014 and much earlier were somewhat domestic. Though there were some concessions that it came on the onset of the global financial crisis.
“That itself tells us that there was an external element to it. Those crises were severe because it let stalwarts on the continent like Angola, South Africa, Nigeria and others went into recession and Ghana didn’t go into recession,” Terkper said.
He added: “It’s also curious to attribute ‘dumsor’ – power cuts – as domestic. You recalled that the genesis of dumsor was the breach of the West African pipeline which led to disruption in gas supply from Nigeria. It affected Nigeria and West Africa. In 2014 and 2015/16 there was a fall in crude oil prices and that could also not be generated by Ghana.”
“What I am driving at is that crises are inevitable and we shouldn’t belittle any crisis. I didn’t even mention fall in commodity – oil and cocoa – prices. The important lesson for us was the measures like the stabilisation fund, the sinking fund among others to manage our debt to create buffers. It does not serve the nation if we try to belittle somebody’s crises. The important thing is to prepare for crises whether big or small,” Terkper said.
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