Former Finance Minister Seth Terkper Advocates for National Dialogue on IMF Loans and Economic Revival

Former Finance Minister Seth Terkper has thrown his weight behind the incoming Mahama administration’s initiative to convene a national dialogue aimed at devising sustainable solutions for Ghana’s economic recovery and its reliance on the International Monetary Fund (IMF). Speaking in a recent interview on Joy News’ PM Express Business Edition, Terkper argued that the country’s ongoing economic challenges necessitate a broad-based discussion that involves experts, policymakers, and stakeholders from various sectors of society.

Terkper stressed that this dialogue is crucial to identifying concrete, actionable steps that will guide the country’s recovery. Drawing from his own experiences, he emphasized that when experts from different fields come together, they can better define what needs to be done to achieve the government’s economic promises. “It is based again on our experience that when you bring together experts and a mix of experts and other strata of society, you can put before them, in more concrete terms, what is needed to achieve the manifesto promises,” Terkper explained. He referred to the 2014 Senchi Economic Forum as an example of the success that can come from such collaborative efforts.

Terkper pointed to the Senchi Economic Forum of 2014 as a successful precedent for the kind of national dialogue being proposed. The forum played a vital role in shaping Ghana’s economic policies during the previous Mahama administration, introducing key reforms that helped guide the country through a period of economic turbulence. “Senchi was what produced smart borrowing. It was where concepts like operationalizing the Stabilisation Fund were discussed and implemented,” Terkper recalled.

He also noted the implementation of the Petroleum Revenue Management Act (PRMA) in 2013 as another outcome of the forum’s discussions. This act allowed the government to manage its oil revenues more effectively, setting the foundation for better fiscal management. Terkper expressed regret that some of these reforms were not sustained in the years following the forum, which he believes contributed to the country’s current economic woes. “We have gone through a period of difficulty that could have been averted if some of these things had been done,” he lamented.

Terkper also addressed the issue of Ghana’s borrowing practices, pointing out that during his time as finance minister, borrowing was aimed at specific, strategic goals, particularly to cover the costs associated with the Single Spine Salary Structure. “We were borrowing through domestic bonds primarily to pay for the Single Spine, not just for other purposes. At forums in places like Ho and Takoradi, we explained to labour that arrears would be paid gradually over time to allow government resources to stabilize,” he explained.

This approach allowed the Mahama administration to meet its fiscal targets within a relatively short time frame. Terkper emphasized that targeted borrowing, coupled with fiscal discipline, was a crucial factor in maintaining economic stability during his tenure.

Another key area that Terkper highlighted was the reform of Ghana’s energy sector, where public consultation played a central role in addressing the challenges posed by the country’s energy deficits. He recalled the introduction of the Energy Sector Levy Act (ESLA) as a specific measure designed to tackle debts in the energy sector, which were caused in part by disruptions in Nigeria’s gas supply. “When the pipeline from Nigeria was breached, leading to a non-supply of gas, VRA and others had to ramp up Independent Power Producers (IPPs). We went to the public and Parliament and said, ‘Let us use ESLA,’” Terkper explained.

This intervention was vital in stabilizing the energy sector, and the public’s understanding of the need for such measures played an essential role in garnering support. “It had a three- to five-year lifespan, but it provided the strength needed to address the crisis,” he said.

Finally, Terkper underscored the importance of transparency and effective communication in any successful economic recovery plan. He emphasized that policies must be clearly explained to the public to ensure that citizens understand the rationale behind them and the expected outcomes. “You need to explain to the public that if we do this, this will be the outcome. That’s the value of dialogue. It builds trust and ensures that everyone is on the same page,” he stated.

Terkper’s strong advocacy for a national dialogue underscores the need for collective action, transparency, and thorough planning to navigate the country’s economic challenges. The discussion that follows, he believes, could help Ghana find practical, long-term solutions to its fiscal struggles, and ultimately pave the way for a more stable and prosperous future.