The Integrated Social Development Centre (ISODEC) has kicked against the new Policy Coordination Instrument (PCI) agreement between the Government of Ghana and the International Monetary Fund (IMF), insisting that the arrangement would not inure to the benefit of the country.
According to the policy and advocacy organisation, the decision by government to enter into another IMF-backed programme, barely weeks after the conclusion of the $3 billion Extended Credit Facility (ECF), represented a continuation of Ghana’s dependence on external economic control rather than a path towards genuine economic independence.
In a statement issued by ISODEC on the PCI in Accra yesterday and copied to The Ghanaian Times, said the PCI, though described as a non-financing arrangement, still imposed strict policy conditionalities similar to those attached to IMF loan programmes.
It explained that under the arrangement, the IMF would assess Ghana’s economic policies every six months, a process which the organisation argued could undermine the country’s economic sovereignty and place Ghana’s borrowing credibility under external supervision.
“The PCI is structural adjustment by another name. It does not provide financing, but it imposes conditionality, and that is precisely the problem,” the organisation stressed.
ISODEC noted that the government’s justification that the PCI would improve investor confidence and create room for more international borrowing reflected what it described as a “dangerous dependence on external debt.”
It maintained that Ghana’s economic difficulties could not be resolved through repeated IMF oversight, but rather through strengthening domestic fiscal capacity and pursuing policies tailored to the country’s developmental needs.
According to ISODEC, the IMF’s emphasis on expenditure cuts, subsidy removals and strict deficit targets had over the years contributed to hardships for Ghanaians, including pressure on public services and employment opportunities.
ISODEC argued that Ghana, as a sovereign issuer of its own currency, should focus on policies that expanded domestic production, reduced import dependency and created sustainable jobs.
The organisation also raised concerns over illicit financial flows (IFFs), which it said continued to deprive the country of critical revenue.
It estimated that Ghana lost about $32.6 billion between 2013 and 2023 through trade misinvoicing, tax abuse and related practices.
According to ISODEC, the amount lost through illicit financial flows far exceeded the support Ghana stood to gain from IMF programmes.
The organisation therefore called on government to intensify efforts to combat illicit financial flows through stronger customs enforcement, improved tax administration and the renegotiation of extractive sector agreements.
Among its recommendations, ISODEC proposed the adoption of a Functional Finance framework for national budgeting, the implementation of a national Job Guarantee Programme, and the exploration of alternative African financing arrangements such as the Pan-African Payment and Settlement System (PAPSS), the African Export-Import Bank and other South-South financing partnerships.
It also called on Parliament to undertake a comprehensive review of the long-term impact of IMF conditionalities on Ghana’s economic development, fiscal autonomy and public service delivery before approving any new arrangement.
ISODEC stressed that Ghana’s future depended on building a self-reliant economy anchored on domestic resource mobilisation, productive investment and national sovereignty rather than continued dependence on IMF supervision.
BY KINGSLEY ASARE
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