Seth Terkper, lead partner of tax firm, PFM Tax Africa and Ghana’s former Finance Minister, has objected the return of Ghana to a developing country status.
According to him, the country’s resilience in maintaining its middle-income status despite the numerous crisis faced during the previous NDC government, is indicative that the country cannot fall back into the classification of a developing country.
“We became a middle-income country at a time when we were saddled with a number of crisis, the global financial crisis, the crude oil/gas crisis and the dumsor crisis and had just one oil field and a rebasing of the economy. Now we have 3 oil fields with a fourth one coming in, the developed countries are also recovering from the Covid-19 and when they fully recover there is going to be a surge in the demand for our resources ie gold, cocoa etc, so by what determination can Ghana be classified as a developing country,” he stated.
“Also, the primary criteria for classification is per capita GDP and at the time we were classified as a middle income country, we had a per capita GDP of a little over $1,000. But today it’s over $2,000,” he added.
Mr Terkper’s assertion follows plans by the World Bank to review Ghana’s classification as a high risk debt distress country mid-next year and a possible reclassification of Ghana as a developing country if it is found to be unable to sustain its debts and meet its debt obligations as well as facing low revenue generation.
But according to the former Finance Minister, Ghana must be proud of being a middle-income country and must work hard to maintain its middle-income status.
He also told Ghanaians to reject the ambivalence being created by the World Bank that the country is likely to return to a developing country status.
“We had a vision of becoming a middle-income country by 2020, but we achieved that vision years ago, so let’s work towards maintaining our status as a middle-income country because there is a certain level of prestige that comes with it,” he said.
“When you manage the economy properly, manage your debts properly, borrow reasonably and use the laid down mechanisms used in paying back debts so you can borrow again, that is where you can go a bit further and be classified as an emerging economy,” he noted.
“I don’t think we should accept the ambivalence and assertion that mid-2021 we are going to be assessed by the World Bank to be determined if we are a middle-income country or a developing one. We should accept that we are a middle-income country and work towards maintaining it because that’s how the world is going to look at us,” he added.
