{"id":659936,"date":"2019-07-19T15:03:26","date_gmt":"2019-07-19T15:03:26","guid":{"rendered":"
\n\t\t

John Dramani Mahama<\/strong><\/p>\n

An International Monetary Fund (IMF) Report has exposed John Dramani Mahama\u2019s handling of the economy during his tenure as president.<\/p>\n

According to the Breton Wood institution, Mr Mahama sup"},"modified":"2019-07-19T15:03:26","modified_gmt":"2019-07-19T15:03:26","slug":"imf-stings-mahama-over-free-fall-spending","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2019\/07\/19\/imf-stings-mahama-over-free-fall-spending\/","title":{"rendered":"IMF Stings Mahama Over Free Fall Spending"},"content":{"rendered":"

<\/p>\n

\n

John Dramani Mahama<\/strong><\/p>\n

An International Monetary Fund (IMF) Report has exposed John Dramani Mahama\u2019s handling of the economy during his tenure as president.<\/p>\n

According to the Breton Wood institution, Mr Mahama supervised an \u2018out-of-control government spending\u2019. By 2015, under the erstwhile Mahama administration, Ghana\u2019s economy was in trouble.<\/p>\n

\u201cGhana has been hailed as one of sub-Saharan Africa\u2019s success stories. It was the first to free itself from colonial rule in 1957. It built a stable democracy in the 1990s, overcoming decades of political upheaval. A thriving economy fuelled by exports of cocoa, gold, and\u2014more recently\u2014oil helped cut the poverty rate from 53% in 1991 to 21% in 2012,\u201d the report stated.<\/p>\n

\u201cBut by 2015, Ghana\u2019s economy was in trouble, hobbled by widening current account and budget deficits, rampant inflation, and a depreciating currency,\u201d it said.<\/p>\n

\u201cCredit dried up as interest rates rose and banks\u2019 bad loans piled up. At the root of Ghana\u2019s woes was out-of-control government spending largely to pay salaries of an overgrown civil service,\u201d it added.<\/p>\n

IMF Bailout<\/strong><\/p>\n

Due to the massive mismanagement of the economy, the incompetent Mahama government had to fall on the IMF for a bailout to help put Ghana back on track.<\/p>\n

\u201cIn early 2015, Ghana turned to the IMF for a $918 million loan to help stabilize the economy,\u201d adding that as a result, the IMF advisors, working with the Ghanaian government, developed a three-part programme.<\/p>\n

Strict Conditions<\/strong><\/p>\n

It said the first was to \u201crestore debt sustainability\u201d where the Mahama government had to limit hiring and wage increases and eliminated subsidies for utilities and petroleum products.<\/p>\n

Luxury Cars Tax<\/strong><\/p>\n

\u201cTo raise revenue, it cracked down on tax evasion and rationalized exemptions. New revenue sources included a tax on luxury cars and increased taxes on high earners. To put Ghana\u2019s finances on a sounder footing, the new Public Financial Management Act called for improved accounting standards, procedures, and technology,\u201d the report indicated.<\/p>\n

It also asked the government to \u201cstrengthen monetary policy,\u201d and according to the report, \u201cThe authorities agreed to gradually end Central Bank financing of the budget deficit\u2014a major source of inflation\u2014and to fortify the inflation-targeting regime.\u201d<\/p>\n

Furthermore, the IMF asked the Mahama government to \u201cclean up the banking system,\u201d saying \u201can asset quality review revealed significant under-capitalization.\u201d<\/p>\n

\u201cSome banks were recapitalized, and the Bank of Ghana used its newly enhanced authority to wind down insolvent lenders. The Central Bank developed regulations to ensure that banks meet sound underwriting and credit evaluation standards. It also paid back insolvent microfinance institutions\u2019 depositors,\u201d the report said.<\/p>\n

Positive Projections<\/strong><\/p>\n

The report indicated that currently due to sound policies of the government, \u201cGhana\u2019s economy is on the mend,\u201d adding \u201cthe trade and budget deficits are narrowing.\u201d<\/p>\n

\u201cThe pace of economic growth is poised to rise to 8.8% in 2019 from 2.2% in 2015. The inflation rate is projected to fall to 8% from almost 19%.\u201d<\/p>\n

It said \u201ccuts to wasteful spending made room for much needed social services, such as free secondary education.\u201d<\/p>\n

\u201cFor Ghana\u2019s 28 million people, it all adds up to higher incomes, better job opportunities, and more purchasing power. Still, Ghana remains largely reliant on foreign financing, exposing it to swings in investor sentiment. Maintaining fiscal discipline will also be a challenge,\u201d it added.<\/p>\n

BY Melvin Tarlue<\/strong><\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

John Dramani Mahama An International Monetary Fund (IMF) Report has exposed John Dramani Mahama\u2019s handling of the economy during his tenure as president. According to the Breton Wood institution, Mr Mahama supervised an \u2018out-of-control government spending\u2019. By 2015, under the erstwhile Mahama administration, Ghana\u2019s economy was in trouble. \u201cGhana has been hailed as one of […]<\/p>\n","protected":false},"author":1,"featured_media":659937,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-659936","post","type-post","status-publish","format-standard","has-post-thumbnail","category-politics"],"yoast_head":"\nIMF Stings Mahama Over Free Fall Spending - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2019\/07\/19\/imf-stings-mahama-over-free-fall-spending\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"IMF Stings Mahama Over Free Fall Spending - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"John Dramani Mahama An International Monetary Fund (IMF) Report has exposed John Dramani Mahama\u2019s handling of the economy during his tenure as president. 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