Former Finance Chief Terkper assesses IMF programme impact on Ghana’s economy
Former Finance Minister Seth Terkper, in a virtual media dialogue on April 26, 2024, offered nuanced insights into Ghana’s engagement with the IMF program and its consequential impact on the nation’s economic trajectory.
Mr Terkper speaking during the virtual media dialogue emphasized the necessity of a holistic assessment of the Fund programme, noting that a comprehensive evaluation typically necessitates waiting until the programme’s conclusion.
While acknowledging certain positive developments in the early stages of the Fund programme, the former Finance Chief voiced reservations regarding the medium-term outlook of the Ghanaian economy and the efficacy of the primary balance metric as a performance criterion as against the use of the fiscal balance metric.
Advocating instead for a focus on the fiscal balance, in alignment with Ghana’s Fiscal Responsibility Act, Mr Terkper expressed concerns about the programme’s performance thus far, citing it as somewhat lackluster.
Furthermore, he underscored the ongoing challenges in reducing the Government’s reliance on Treasury bills and re-establishing access to capital markets.
“Well for a true assessment of every fund programme normally is going to the end of the program. We are barely a year into this one from the first review. I think we have been shown the positives. But you know my reservations, which have to do with the medium term and the performance criteria being used, which is the primary balance that does not give me much hope in terms of performance.
“Because we should rather be looking at a fiscal balance and not the primary balance to judge our performance in line with our own fiscal Responsibility Act. So performance has been a bit lackluster. But in terms of returning to the capital markets and stopping the excessive reliance on Treasury bills to finance the budget and others, I think there isn’t much to expect from there,” he remarked.
Meanwhile, the IMF Mission Chief to Ghana, Stephane Roudet, has commended Ghana’s performance under the IMF programme.
According to Mr Roudet, Ghana is overperforming under the IMF programme. He lauded the programme’s effectiveness, noting that it not only meets but exceeds its promises.
“Ghana is overperforming under the IMF programme and that is good. Ghana’s programme is delivering on its promises and in fact, it is over-delivering,” he remarked.
Ghana’s robust performance has prompted the IMF to reconsider its growth forecasts for the country for 2024, with Mr Roudet citing better-than-expected inflation figures as a contributing factor.
“We are also surprised by how well growth has performed under Ghana’s programme, a development that was not anticipated at the programme’s outset,” he posited attributing this success to Ghana’s commitment and earnestness in implementing the programme, with the Bank of Ghana actively contributing to inflation control.
