IMF did not say the reality about Ghana’s economy but just a diplomatic talk – Seth Terkper
Former Finance Minister Seth Terkper has dismissed the assertion by the International Monetary Fund Director Madam Kristalina Georgieva that Ghana’s economic situation is due to external shocks from the Russia and Ukraine war, calling it a “diplomatic talk”.
According to him, it was a diplomatic conversation the IMF engaged in since such institutions are diplomatic in nature but the real conversation with the government over the ailing economy did not come out.
He said, “if you go to the IMF’s article 4, 2019, that was a year before Covid. Covid had not come, we were reading the budget, it showed that there was a fiscal gap if you make some adjustments of 3 to 5% of GDP. If you compare that token, what the fund was saying to the budget that was being run, we are saying that if IMF said the deficit around that time[2019] was 5.7% or 5.9%, the IMF says that gap is higher by 5% it means the deficit was probably around 13 and 14%“
The former Minister enumerated the speed with which Ghana took the Covid loan between March and May from the IMF despite weaning itself from the program six months ago. According to him, if you look at “the Covid loan report you will realize that the gap had increased and they did not attribute all the gap to the money we need for Covid”.
He added, “if the gap had increased to 8 or 9% what accounted for the 6% gap because Covid is ahead of you and the estimate government gave is, I need 3% of GDP which the Fund gave $1 billion and others chipped in and whatever, so what is accounting for the 3 to 5% which had increased to around 6, 7%? So it means that there was a problem before”.
Article 4, 2021 which was done last year, there were difficulties. The World Bank country director and others had said Ghana had a deficit of 5% before Covid. That was so obvious. So I will say that does not reflect our reality. We had been saying that they should add the banking sector cost, the energy sector cost because ELSA had been collateralized to show the true deficit. The IMF did that adjustment. The IMF went back to 2018 and adjusted all our deficits to 7%, 7.5%, not 4.3%, 4.5%.
