The International Monetary Fund (IMF) has settled the ongoing debate on whether or not the government of Ghana ‘lied’ about the state of the Ghanaian economy when it made a presentation to the international body for the request of a US$ 1billion credit facility to help the country mitigate the impact of COVID-19 on the country’s economy.
Over the last few days, there has been a raging controversy over whether or not the Akufo-Addo government, supplied IMF with the same macro-economic figures it [Government] has been presenting to Ghanaians.
It follows claims by a section of the populace including flagbearer of the opposition NDC, former President Mahama, that the country’s 2018 fiscal deficit which was 3.0%, was allegedly presented to the IMF as 7.0%. Also the 2019 fiscal deficit of 4.5%, was allegedly pegged at 7.5% when the country made presentations to the Bretton Woods institution.
Clarifying the issues on JoyNews on Saturday, May 9, 2020 however, the Country Representative of the International Monetary Fund (IMF), Albert Touna Mama dispelled notions that the said figures were presented by the government saying they were rather generated by the IMF.
Explaining why that happened, Mr. Touna Mama disclosed that the IMF in calculating a country’s fiscal deficit includes two elements; payments made in the energy and the financial sector which is different from the Bank of Ghana’s understanding of fiscal deficit.
According to him, the IMF has some statistical standards which they use in making comparisons between countries and that standard makes it important to include the two elements.
Mr. Touna Mama further noted that the IMF does not add oil funds in calculating gross national reserves but the Bank of Ghana does, with the latter believing it is important to add the heritage and the stabilization fund as part of the gross internal national reserve.
In effect, the IMF insisted that the comparison being made as the basis for this raging debate is completely based on two different metrics.
“What I’m saying is that the 4.5 you’re seeing for example in 2019 does not include financial sector payments and energy sector payments. Our number includes these two elements and we know well and why the government of Ghana made the decision not to add these two elements in the fiscal deficit. This is what we generated, this is our understanding of the fiscal deficit.”
“When it comes to the gross internal reserves, our explanation is the same method, we work with a lot of countries and we do have some statistical standards, we may well disagree for example if you take the gross national reserve and I think that is a point that some people may agree to…I think the argument by the Bank of Ghana is that if you are in a situation of crisis, you can go to parliament and request access to the oil funds, what I can say is we can disagree to disagree and present the numbers that we think are more aligned to comparison with other countries because that’s our objective,” he said.
“Let me just make that point clear, we present the deficit with and without financial sector payment and energy sector payment so the comparison that I see making the rounds is comparing two different things on one side and we are aware of these differences, they are not new and I think we can agree to disagree to it but I think there’s really no new information here, it is important to compare similar things.”
The crux of the debate sparked by the Media Foundation for West Africa’s fact-checking online portal, Fact-check Ghana has been that the Government of Ghana presented different figures to the IMF, but Mr. Touna Mama insists that when it comes to the data received and what appears in Government’s budget statement, there is nothing that they do not know.
“It will be fair to respond to this call just to clarify a statement made by fact-check Ghana…they basically say and I quote, ‘the data presented by the government to the IMF are different from those in the budget statements’ and here I would just like to focus on two metrics, the fiscal deficit and the Gross Internal National Reserve, in our report, if I’ll start with the fiscal deficit, we present two measures of the fiscal deficit; with and without financial sector and energy sector payments.
“For the debate about whether or not the government is massaging data…when it comes to the data we’ve received and what we’ve worked with in this debate there is nothing new that we have not known about,” he added.