Election pressure could send Ghana back to IMF within next 2 years - Economist

Election pressure could send Ghana back to IMF within next 2 years - Economist
Source: Ghana | Ebenezer Sabutey | JoyBusiness
Date: 20-06-2019 Time: 08:06:16:pm

Economist, Professor Godfred Bokpin is warning that Ghana could return to the International Monetary Fund (IMF) for support in the next two years if the government fails to manage expenditure for the election year.

According to him, the country's debt ratio is reaching an unsustainable situation which must be dealt with immediately before escalating to higher levels.

He was speaking at IMANI’s public lecture on the theme “Is Ghana’s debt sustainability under serious threat after the IMF program?” 

Prof Bopkin said “The discussions have been heavy on the country's public debt and it's sustainability after the External Credit Facility program with the IMF We don't have a sufficient fiscal space so any election-related expenditure beyond certain level may be the reason why Ghana could go for its 17th IMF program, it's real.”

He added, “Because we have seen that the deficit turns to escalate in every election year since 1992 with the exception of 2004" he noted,  but quick to add that.Government will cite the fiscal responsibility act that has cap the numerical value to 5 per cent of GDP but the issue is compliance and enforcement because we use to have a Bank of Ghana Act that allows the central bank to do the deficit financing to the tune of 10 per cent of total revenue but we never respected that law so what makes us think that we will respect this one and who is going to do the Monitoring".

He concludes that the last four months of every election year, the economy is left without monitoring.

Prof. Bokpin has also blamed the slow growth in the non-oil sector of the economy on the inability of the government to allocate substantial funds for infrastructure projects.

According to him, the country is likely to experience a non-growth if the government does not pay attention to capital expenditure on infrastructure.

The oil and gas sector has continuously led growth for the country's economy leaving the non-oil sector, a situation Professor Bokpin describes as a threat.