A Professor at the University of Ghana Business School, Godfred Bokpin has cautioned against being overly optimistic about Ghana’s economic recovery due to the $3billion International Monetary Fund (IMF) programme.
He indicated that the economic recovery is going to be slow and painful.
Prof Bokpin was commenting on the update that was given by the Finance Minister Ken Ofori-Atta on the programme. The Finance Minister had indicated that the deal significantly paved the way for the implementation of an ambitious and well-thought-out programme of reform for our economy and country.
“In fact, the real work of adjustments, re-alignments and the return to a path of steady economic growth has just begun,” he said while providing updates on the deal at a press encounter on Sunday.
The approval was secured on Wednesday, May 17 with the first tranche of $600 million received.
The Finance Minister stated that “Let us brace ourselves for the needed reforms, especially in expenditure control, non-arrears accumulation, revenue growth, ECG collections and Energy Sector reforms, in order to rebuild the walls of the Republic with urgency.
“That said, our reform programme, the Post COVID-19 Programme for Economic Growth
(PC-PEG), now supported by the 3-year Extended Credit Facility arrangement with the
IMF, is built on clear targets and strong policy and structural measures.”
Reacting to this on the Business Focus with Paa Kwasi Asare on TV3 Monday, June 19, Prof Bokpin said “If you look at the way the programme has been structured, Ghana actually started implementing some of the projects in the programme, our prior actions, even before the board approval. So if you see utility adjustments, they are prior actions we had to follow before the board approval but I think broadly we seem to be overly optimistic, I think from the Finance Ministers’ perspective.
“I think we need to be cautious because the recovery is going to be slow, it is going to be painful, you need to look at this within context also. I think if you look at Ghana’s inflation probably it is one of the highest in Africa, food inflation and the rest of them, and typically if that is coming down we say it is good news but it is still very high.
“If you are celebrating inflation at 42.2 percent, by world average it is still very especially if you look at food inflation.”