Ghana’s economy to grow by 4.8 percent in 2021 – says IMF

CAMBRIDGE, MA - MARCH 29: President of Ghana Nana Akufo-Addo delivers the Keynote Address for the 2019 10th Annual Africa Development Conference at Harvard University John F. Kennedy School of Government on March 29, 2019 in Cambridge, Massachusetts. (Photo by Paul Marotta/Getty Images)

Sierra Leone Telegraph: 15 May 2021:

The latest World Bank report on Sub-Saharan Africa’s economic prospect is bleak. It says that: “Sub-Saharan African countries have managed to keep the COVID-19 virus (coronavirus) under control with relatively low number of cases, the pandemic continues to take a toll on African lives and economies, economic activity is projected to decline by 3.3% in 2020, confirming the region’s first recession in 25 years. The substantial downturn in economic activity will cost the region at least $115 billion in output losses this year, in part caused by lower domestic consumption and investment brought on by containment measures to slow the spread of the coronavirus. This situation could also push up to 40 million people into extreme poverty, erasing at least five years of progress in fighting poverty”.

But Ghana, one of the largest economies in Sub-Sahara Africa is bucking that trend, with growth projected at 4.8% by the IMF in 2021.

An IMF mission led by Carlo Sdralevich held consultations under the Article IV during April 28 – May 12, 2021 with the authorities in Accra, Ghana, through virtual meetings. At the conclusion of the mission, Mr. Sdralevich issued the following statement:

“Ghana has managed very effectively the COVID-19 outbreak in the country, and thus succeeded in protecting lives. Almost 93,000 cases have been confirmed, and unfortunately 780 people have died as of today. The launch of mass vaccine rollout has been a breakthrough, with the administration of approximatively a million doses as of end-May.

“The impact of the pandemic on the economy has been severe. Real GDP growth slowed to 0.4 percent in 2020 from 6.5 percent in 2019, due to lower activity in the extractive industries and a collapse in hospitality and retail services, including the informal sector that especially employs female workers. Inflation spiked to double digit because of food price pressures, before falling to 8.5 percent in April 2021.

“Policy interventions in 2020 were also critical to safeguard livelihoods and paved the way for a faster rebound of economic activity. Real GDP growth is projected at 4.8 percent in 2021, driven by a rebound in mining and services. Inflation is expected to remain around the central bank’s target of 8 percent by end-2021. The CARES program has the potential to be transformative and inclusive for the Ghanaian economy, buttressed by its emphasis on SMEs and digitalization as well as leveraging the AfCFTA.

“Government interventions in 2020 also exacerbated pre-existing fiscal rigidities and public debt vulnerabilities. The government deficit, including energy and financial sector costs, reached 15.5 percent of GDP, while annual gross financing needs exceeded 20 percent of GDP. Public debt rose to 78 percent of GDP in 2020, from 64.4 percent in 2019, including ESLA of GHs7.63 billion in 2020.

“The 2021 budget’s recent policy pivot towards fiscal consolidation is an important step in the right direction and a difficult one in a pandemic. Fiscal consolidation should be deepened and anchored around debt and debt service reduction to create space for social, health, and development spending.

“Given the social and equity implications, fiscal consolidation should rely more on progressive revenue and spending measures, while guaranteeing fiscal support to the most vulnerable and social safety nets.

“Despite progress in rationalizing power generation, the financial viability of the energy sector affects people’s daily life and will remain a drag on productivity and a driver of public debt if not addressed decisively. Improving efficiency and collections remains a priority to achieve substantial savings.

“The planned audits of COVID-19 emergency spending and of arrears accumulated in 2020—in addition to routine budgetary reporting practices—are welcome as they will help account for the increase of spending and its effectiveness, and provide lessons to improve the robustness of Public Financial Management systems.

“The team had collaborative and constructive discussions with Vice President Bawumia, Finance Minister Ofori-Atta, Governor Addison of the Bank of Ghana, other senior government officials, Finance Committee of Parliament, private sector representatives, and civil society organizations.”

1 Comment

  1. Here we go again with the incessant lies and calculated deceptions coming from the worlds most merciless Loan sharks. Gentlemen – the IMF cannot be trusted for they are like leeches and hungry parasites that keep on fattening themselves at the expense of the welfare of our poor struggling people. Of this you can be rest assured – They are creative mathematical geniuses that are known for conjuring strange, bogus figures in the twinkle of an eye out of nowhere; Answer – which yardstick is the IMF using to measure tangible growth in Africa?

    Is it the same as those that got them kicked out of Bolivia in 1978? Who knows? Perhaps this is another clever trick by the IMF to keep Ghana optimistic that things are moving in a positive direction for them. Hold the a nervous dog on a leash while feeding it a delicious bone. Give a disgruntled slave his masters old garments to wear in order to keep him submissive to your hearts content.(lol) Geez! This is what being played like a fiddle looks like – a damn shame.

    The truth of the matter is that Ghana after a 16 year relationship with the IMF is still shackled by its debts to the IMF. Who’s the real dummy here – our leaders or the IMF? A 4.3 percent growth in the economy cannot and does not translate itself into better standards of livings for the poor people of Ghana – It is nothing of value to celebrate or be proud about. Word on the streets is that the people of Ghana have been advocating for a divorce from the IMF for some now time because of their impractical and dubious conditionalities. A 4.3 percent growth huh? Give me a break.(lmao)

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