Economist challenges IMF's remarks on Ghana's economy

Adnan Adams Mohammed
A renowned economist has challenged the remarks by the
International Monetary Fund's, that the economy is healthy, saying Ghana is
likely to return to the IMF.
According to a team from the Breton Woods institution, led
by Mr Carlo A.E. Sdralevich, which is in the country for Article IV
Consultations said, Ghana’s economy remained stable and projected a 7 percent
Gross Domestic Product (GDP) growth for 2019.
The fund made the disclosure at a meeting with the Finance
Committee of Parliament as part of its mission last week. The discussions
centred on macro-economic performance, revenue mobilisation, the financial
sector clean up and matters bordering on the post-Extended Credit Facility
(ECF) programme.
But contrary to the IMF's remarks, the Ghanaian economist
has said, if the country continues to dwindling in its revenue, and debt
continues to go up, it may be forced to subscribe to the IMF programme in the
coming years.
“If we continue to realize this dwindling revenue over the
years and it continues for about five years, I think we are not far from going
to IMF again” Dr. Lord Mensah, Lecturer at University of Ghana Business School
stated in an interview with an Accra base radio station.
Mr. Mensah said
Ghana has made a lot of investment in the bid to enhance revenue generation,
but the effect is not visible.
“As a country we’ve done a lot of investment in a direction
to enhance revenue generation. So I ask myself why is it that all this
investment is not building up into the revenue generation. Is it because the
investment has been done and there is a large effect that we expect to see in
the future? So for me, I think that there are so many things that are not
adding up in the economic indicators that we have in the country. That is why
when IMF came they had to caution us as to how our debt is brewing in relation
to the revenue that we are generating.”
Mr Sdralevich of the IMF noted that, the macro-economic
situation in Ghana remained favourable and the projected GDP growth would be a
reduction from the original 8.8 percent.
Nonetheless, he asked the government to be watchful about
the country’s rising external debt.
Also, the Chairman of the Finance Committee of Parliament,
Dr Mark Assibey-Yeboah addressing the media in Parliament disclosed that, the
IMF had been impressed with the management of the economy after Ghana’s
three-year ECF programme with the fund.
“Inflation is now at 7.8 per cent, and if you look at the
trend over the past 13 months or so, it's not expected to rise,” he said.
The 12-day Article IV Consultations, which ended last week,
were part of the fund's mandatory multilateral surveillance for all IMF-member
countries.
They are the first Article IV Consultations since Ghana
successfully concluded the four-year IMF-supported ECF programme in April.
The last IMF Article IV Consultations were held in 2017.
A statement put forward by the Ministry of Finance in
connection with the visit of the IMF Mission said: “A typical IMF Article IV
Consultation would have an IMF team of economists visit a country to assess
economic and financial developments and discuss the country’s economic and
financial policies with the government and central bank officials.
“IMF staff missions also often meet with some
parliamentarians and representatives of business, labour and civil society.
This is currently the stage we are engaged in with the IMF since Monday,
September 30, 2019.”
“After these consultations, the IMF team reports its
findings to IMF management and then present them to the Executive Board for
discussion, which represents all of the IMF’s member countries. A summary of
the board’s view is subsequently transmitted to the country’s government. In
this, the views of the global community and the lessons of international
experience are brought to bear on national policies,” it added.
Dr Assibey-Yeboah further disclosed that the IMF team also
praised Ghana for the smooth nature in which it had undertaken the banking
clean-up exercise.
"Regarding the banking sector clean-up, what I
gathered from them was that the whole process had been smooth and it really
amazed them,” he said.
“For you to resolve all these banks, microfinance
institutions and savings and loans companies challenges within a short period
and still have financial stability, those at the helm must be doing something
fantastic. What they have achieved is amazing," he added.
The Ranking Member of the Finance Committee, Mr Cassiel Ato
Forson, told journalists after the meeting that the team raised both positive
and negative issues.
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