In what appears like an unprecedented move, President John Mahama seems to have passed a vote of no confidence in his finance minister, Seth Terkper by relegating him from the forefront of the upcoming negotiations with the International Monetary Fund on a possible bailout for the country�s ailing economy.
President John Mahama announced in an interview with the Reuters News Agency on Friday that former Finance Minister Kwesi Botchwey will lead the discussions with the IMF due to start on September 16th, a far departure from global norm and practice where Finance Ministers all over the globe have become automatic leaders of such delegations in representing their states to negotiate with the Fund.
According to various experts the paper spoke to, on condition of anonymity, on the announced arrangement, the IMF in all their dealings with various countries deals mainly with Ministers in charge of the Finance Portfolio and as such it is the global practice for such Ministers to represent their states in such crucial discussions especially because it is the responsibility of the Minister of Finance to oversee the implementation of whatever decisions and agreements the parties reach.
With the current Minister relegated to the background in the upcoming negotiations, it remains to be seen if the President will hand the job of implementation to a body headed also by Kwesi Botchwey or if it is yet another sign that the days of Seth Terkper as Finance Minister are numbered as speculations have been rife for some weeks that the Minister is likely to be replaced after the IMF discussions with suggestions that the Presidency is busy head hunting for a successor to help rescue the gravely troubled economy.
The decision to name Dr. Kwesi Botchwey as head of the delegation is also for some, a troubling sign of an acute shortage of trusted competent hands available to the current administration when it comes to fixing the economy. Dr. Botchwey is already the Chairman of the Ghana Gas Company and is also the Chairman of the National Development Planning Commission.
The latest development comes amidst new concerns in the international finance markets on what has become a seemingly confusing strategy to rescuing the economy. On Monday, the respected Wall Street Journal raised issues with Ghana�s intent on getting a bailout from the IMF while at the same time trying to sell bonds to investors on the finance markets.
�African countries have been selling bonds at a record pace this year, but the latest deal might raise more than a few eyebrows.
Just a couple of weeks after seeking a bailout from the International Monetary Fund, Ghana on Wednesday outlined plans to meet bond investors about borrowing cash from them as well.�, the article said.
Stuart Culverhouse, Chief Economist and head of research at Exotix, an investment banking brokerage amplified the concerns of the market stating �It�s a little bit confusing as to what they are playing at. I can�t think of a situation where the timing has been like this before. Normally a country would seek an IMF program if it couldn�t borrow in the market. It seems a little bit contradictory to try to do both�.
Government after many months of denial, early last month decided to seek a bailout from the IMF to rescue the economy which is facing its worst crisis in years. With the burden of consecutive double digit deficits and an unprecedented public debt portfolio which has led to ballooning interest payments, the economy is in dire need of resources to stabilize the situation and rescue the local currency which has as a result of the weakened fundamentals depreciated by over 40% so far in 2014.
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