A former Minister of Finance has asked the government to suspend the Free SHS policy until the economy rebounds.
Seth Tekper said 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 urgently.
“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 do unfettered free SHS,” he said.
He added that the IMF deal will come with constraints to expenditure. So should the flagship policy be suspended, the money from it can be used for roads construction and hospitals.
“If we have a project which we have signed to complete in three years, I think we can suspend it for one year until we improve the situation…for instance some roads or some hospitals.”
The government and the Bretton Woods Institution in a joint press statement on Monday, December 12, said a Staff-Level Agreement on economic policies has been reached.
This is to be supported by a new three-year arrangement under the Extended Credit Facility (ECF) of about $3 billion.
According to a statement from the fund, the government’s strong reform programme aimed at restoring macroeconomic stability and debt sustainability while protecting the vulnerable, preserving financial stability and laying the foundation for strong and inclusive recovery, was key in this decision.
However, the staff-level agreement is subject to IMF Management and Executive Board approval and receipt of the necessary financing assurances by Ghana’s partners and creditors.
Meanwhile, the government announced it is suspending debt service payments on certain categories of external debts, including Eurobonds, commercial loans and most bilateral debt.
According to the government, this is aimed at bringing the country’s unsustainable debt level under control – a statement from the Ministry of Finance said.