Accra, Ghana, May 11, 2020//-The Caucus for Democratic Governance, Ghana (CDG—Gh) says the recent admission that the Akufo-Addo led government cooked figures to the IMF for $1billion cash, is an indication that the country’s economy is in the Intensive Care Unit (ICU).
Ghana recently received $1 billion from the IMF under its Rapid Credit Facility (RCF) to enable it deal with the COVID-19 pandemic shocks.
The disbursement according to the International Monetary Fund (IMF) would help address the urgent fiscal and balance of payments needs that Ghana is facing, improve confidence, and catalyze support from other development partners.
The COVID-19 pandemic is already impacting Ghana severely. Growth is slowing down, financial conditions have tightened, and the exchange rate is under pressure.
This has resulted in large government and external financing needs.
The authorities have timely and proactively responded to contain the spread of the COVID-19 pandemic in Ghana and support affected households and firms.
The IMF continues to monitor Ghana’s situation closely and stands ready to provide policy advice and further support as needed, according to a statement from the Breton Wood institution.
The government’s u-turn to the IMF for the CRF has generated hue and cry in the country after the government claimed that the country’s economy is robust an on sound footing.
“The so called robust Ghana economy is on its knees struggling for breath, when other weak African economies are running”, Dr E.K.Hayford, Executive Director of CDG-GH, collaborated.
He continued: “The Ghana Government is among the first few victims, to cry to IMF for a lifeline, three weeks after the COVID -19 struck. With cooked figures which did not reflect the 2020 budget statement, it received first $100 million and a month later $1 billion from IMF”.
As if that is not enough, the government is also negotiating with World Bank for a bail out. Dr Hayford and many Ghanaians are asking about did the government spend its internally generated funds. It could have been that the government spent these funds on infrastructure but there is nothing to show for it, according to him.
“We have always suspected that our economy is fragile, looking at the polished macroeconomic figures which Government since 2017 has been presenting”.
Recently, the flagbearer of the opposition National Democratic Congress (NDC), John Dramani Mahama had to draw the attention of Finance Minister to the sinful practice creative accounting.
Dr Hayford also added that the Finance Minister was engaging in creative accounting, where a number of debts are put under the base line to escape accounting.
Just two months ago, Moody’s, a leading global rating agency had predicted that Ghana’s debt could hit 70 percent of its Gross Domestic Product (GDP) this year.
“The country’s debt projections include an assumption that these contingent liabilities add an additional 2% of GDP annually, implying a further increase in the debt ratio to close to 70% of GDP in 2020 from 64% in 2019”, Moody’s stated in its recent release.
According to Bank of Ghana’s December summary of financial and economic data, Ghana ended 2019 with a total debt stock of GH¢218 billion, pushing the country’s Debt-to-GDP Ratio at 63 percent.
If the $3 billion Eurobond loan and others are added to the debt stock, it will further worsen the country debt sustainability position.
At the time of going to the press, Ghana has recorded 4,700 confirmed cases of COVID-19 with 22 deaths.
BELOW IS THE COOKED FIGURES IN THE 2018,2019 BUDGET AND FIGURES IN IMF REPORT 2020
INDICATOR DATA FROM BUDGET DATA FROM IMF
STATEMENTS STATEMENT
| Date
|
2018
|
2019
|
2018
|
2019
|
| Fiscal Deficit of GDP | 3.0% | 4.5% | 7.0% | 7.5% |
|
Primary Balance (% of GDP) |
-0.5% |
-0.3% |
-1.4% |
-1.8% |
| Current Account
Balance (% of GDP) |
-1.5% |
-1.2% |
-3.1% |
-2.7% |
| Gross International
Reserves (millionsof US$ |
6.800 |
8.100 |
5.317 |
6.634 |
Source : Budget StatementS, Ghana(2019, 2020) and IMF Statement ( 2020)
African Eye Report
