IMANI Researcher and in-house economist, Hubert Nii-Aponsah took part in the Third National Civil Society Forum on Ghana’s IMF Programme organised by The Civil Society Platform on IMF Bailout (of which IMANI is part). The forum, which took place on 29 March 2016 was held on the theme: “A year on, what are the Gains and Shortfalls of the IMF Supported Extended Credit Facility Arrangement on the Ghanaian Economy?” See brief report below.
Reported by Hubert Nii-Aponsah | IMANI Press
The Civil Society Platform on IMF Bailout is an initiative to advocate for civil society inclusiveness in major public financial management issues and in particular the IMF bailout negotiations as well as the implementation of the final agreement. IMANI is one of the precursors of the platform.
1) After attendance and registration from 8:30 am to 10:45 am, the program kicked off with the welcome address by Mr Joe Winful, member of the platform.
2) He gave remarks regarding several previous IMF programmes and the need to consider this IMF programme as “the last dance”. He mentioned that President Mahama is of the same view too. He also explained the purpose of the Civil Society platform as a united front to engage the IMF and the government, review the programme as well as discuss areas of concern and how best to move forward.
3) Mr Joe Winful introduced the chairman in the person of Most Rev Prof Emmanuel Asante who justified why he has been chosen as chairperson stating that he is interested in the economy because it cannot be divorced from peace and that peace is important to him.
4) Oxfam, a civil society organisation who sponsored the programme gave brief remarks to thank everyone for coming and stressing the importance of reaping dividends from the programme.
5) There were two addresses by the IMF Resident representative, Ms Natalia Koliadina and Dr Alhassan Iddrisu, Director of Economic Research & Forecasting Division at the Finance Ministry. Ms Natalia Koliadina said the programme has largely been successful so far and that confidence in the economy is rising while fiscal debt has reduced substantially. On his part, Dr Alhassan Iddrisu mentioned on-going programmes such as The Government Integrated Financial Management Information System (GIFMIS) and surprise audits of various Ministries, Departments and Agencies (MDAs). These programmes form part of government’s efforts to clear ghost names in the public sector as a way of ensuring fiscal discipline within a tight fiscal space. About 35% of the tax revenue is going into servicing debts and about 44% to paying wages and salaries.
6) There were also two presentations respectively by Mr. Godson Aloryito, who highlighted the impact of the Civil Society platform on the Extended Credit Facilty arrangement with the IMF and Prof. Godfred Bokpin, on the theme: “ A Review of the IMF Programme One Year After Implementation”
5) Respectively, some key issues which emanated from the two presentations included:
- a) More improved tax reforms helped to contain wage rise and successful advocacy for the maintenance of expenditure on social interventions despite the fiscal consolidation programme.
- b) Structural similarity of the economy in 1965 (when Nkrumah first proposed going to the IMF but later rejected it due to his ambitious expansionary drive) and 2015 as well as various indicators showing that many targets have not been fully achieved as at December 2015 but there is still indication of progress. For example the primary balance was targeted at 0.9% of GDP in 2015 but 0.2% was achieved by December 2015. Inflation was also targeted at 12% but the actual was 17.5% for the same period.
6) There were comments and suggestions after the presentations relating to the need to manage expectations of oil revenue, allocate more expenditure to maintenance costs, pay attention to the supply-side and not just demand-side management, the need for the Ghana Revenue Authority (GRA) to do more than arm-chair collection of taxes but follow up on those in the informal sector to pay among other relevant contributions. The meeting ended at about 2:30 pm with closing remarks from the chairman.
IMANI’s Participation
From our perspective, I [Hubert Nii-Aponsah] expressed concern, particularly for the primary surplus target of 0.9% being missed because there are two ways to stabilize our debts which are the growth approach where growth should be greater than interest rate and the SUFFICIENT primary surplus approach which we have chosen. Therefore, missing the target would mean that the primary surplus is not sufficient to bring the economy from an explosive path to a sustainable path in the dynamic sense (over time). But IMF Representative, Ms Koliadina explained that those targets were set under different macroeconomic conditions both internally and externally at the time and further reiterated that in the current macroeconomic context, she has observed that the country is on track.
