Business News of Friday, 24 February 2017
A member of the Economic Management Team of the governing New Patriotic Party, Dr. Mark Assibey-Yeboah has castigated the NDC government for failing to meet International Monetary Fund (IMF) targets aimed at ensuring macroeconomic stability.
Contributing to a debate on the President’s State of the Nation Address in Parliament, the MP for New Juaben South, Dr. Mark Assibey-Yeboah listed missed targets which he says rubbishes the rationale behind going for a $918 million bail-out in July 2014.
The former government also aimed to stabilise the currency to keep the dollar exchange rate at 1dollar to GHC3.9. But by December 2016, it had hit GHC4.2.
The inflation target was 10.1% but as at December, it stood at more than 15%.
He said the IMF program has not addressed economic growth which has stuttered before and during the program. Economic growth was 4.0% in 2014, 3.9% in 2015 and 3.6% in 2016.
A missed target which analysts say has serious implication is the fiscal deficit. Despite an IMF goal of 5.3% for 2016, the NDC government missed this target, widening the deficit to more than 9%, Dr. Mark Assibey-Yeboah said.
“So why did we enter the IMF program to start with? It has been a complete waste of time”, the New Juaben South MP exclaimed on the floor of parliament Thursday.
Ghana’s economic growth rate struggled after it topped 9 percent in 2011. In the next three difficult years, growth decelerated markedly in 2014, to an estimated 4.2 percent.
The economy was characterized by slowing activity, accelerating inflation, and rising debt levels and financial vulnerabilities, the IMF has said adding the country’s economic prospects were put at risk by the emergence of large fiscal and external imbalances, as well as by electricity shortages. The IMF program was to restore confidence in the economy.
Macroeconomic stability is measured by a basket of indices that include inflation, interest rates, exchange rate, deficit and GDP growth.
Dr. Assibey- Yeboah’s criticism has largely been the position of the NPP towards the government’s handling program.
The NPP economic czar, Dr. Mahamudu Bawumia who is now the vice-president described the then government’s handling of the economy as a “toxic mixture of incompetence and corruption.”
The NPP government has made it clear that it intends to extend the IMF programme to 2018.
“Originally the programme was expected to end on April 2018 but I know they are discussing extending it to December 2018″, the Monitoring and Evaluation minister Dr. Akoto Osei has said.
The call to review the IMF program is supported by a Senior economist at the University of Ghana, Dr. Ebo Turkson who says the failure of government to meet the targets calls for a renegotiation.
He told the B&FT in January 2017, I think for the 2017 targets we might have to go back to the table and sit down with the IMF and revise the targets”.
The NDC has criticised the government’s decision to re-negotiate the IMF deal. In a statement presented by the Minority leader, he said:
“We find it curious that President Akufo-Addo did not repeat his emphatic statements on campaign platforms that he will review the programme because it was inimical to our interest as a nation”
“Akufo-Addo has broken yet another campaign promise because the reality has dawned on them,” Haruna Iddrisu said as part of the NDC’s reaction to the State of the Nation Address presented to Parliament last Tuesday.