IMF supports Ghana's economy

Economic growth in Ghana continued at a robust pace of eight per cent in 2012 amid rising fiscal and external imbalances, a mission from the International Monetary Fund (IMF) to Ghana has said.
The fund said in a statement after the mission had concluded discussions with gvernment officials that “the mission strongly supports the government’s ambitious transformation agenda centred on economic diversification, shared growth and job creation, and macroeconomic stability.
It urged the government to gain control over the rising public sector wage bill. It further recommended a thorough audit of the 2012 payroll and welcomed that the government had already started that process.
“The government’s deficit target of 6 per cent of GDP by 2015 will keep public debt high and buffers low.
The mission led by fund’s Chief of Mission to the country, Ms Christina Daseking, visited Accra from April 2 to 12, to conduct discussions for the 2013 Article IV consultations.
They met President John Mahama, Vice-President Paa Akwesi Amissah-Arthur, Finance Minister, Mr Seth Terkper, Bank of Ghana Governor, Dr Henry Kofi Wampah, members of parliament, and representatives of the private sector, think tanks, trade unions, and civil society.
Ghana has, meanwhile weaned itself of support from the fund following the end of its programme in the country.
It, however, does not mean that recommendations and findings of the fund on the country’s economy would not be considered by the government.
The Minister of Finance and Economic Planning, Mr Seth Terkper, said at a media briefing after the IMF concluded itsc consultative meeting with Ghanaian officials that although the country’s programme has ended, the Article IV Consultations would continue as it is done for every member state of the fund.
The IMF provided critical support for the economy to achieve stability for business planning and growth.
“It is not every country that has a program with the fund but currently as we speak our program has ended but the article 4 consultations is done so long as you are a member of the IMF,” he explained.
Under the Article IV consultations, discussions went on between led by Ms Daseking, and the government of Ghana as well as the Ministry of Finance, Bank of Ghana, representatives of the private sector, think tanks, trade unions and civil society.
The interaction was to brief the media on discussions that had gone on between the Ghanaian government and the IMF from April 2 to 12 as well talk about the health of the economy according to their findings
The fund’s Chief of Mission to Ghana explained that “we are here to do the Article IV consultation, although we do not have any program with Ghana any more, it does not mean our discussions are less interesting.
She said the mission had “very candid and open discussions” with various people to get a good picture of the economy.
Presenting their findings on the macro economy at the end of the mission, she said “economic growth continued at a robust pace of 8 per cent in 2012 amid rising fiscal and external imbalances.”
She was however quick to add that despite Ghana’s strong economic potential, short-term stability risks have risen adding “low external buffers and a rising domestic debt ratio expose the economy to risks, such as weaker terms of trade, reduced capital inflows, or unanticipated spending needs.”
Ms Daseking added energy sector problems could curtail growth, while excessive government borrowing is raising the cost of credit to the private sector adding “both factors have been identified as key growth constraints in Ghana.”
She also urged government to control the “ballooning” wage bill which if untamed, will bring debt levels that could endanger the government’s transformation agenda.
The IMF however projects a reduction in the fiscal deficit to 10 per cent of deficit of GDP this year, about 1 per cent higher than the budget projections, assuming a delayed adjustment in utility tariffs.