GSS TASKED TO EXPLAIN REVISED GDP

Posted on: www.dailyguideghana.com

By William Yaw Owusu

Wednesday, October 22, 2014

An Economic expert wants the Ghana Statistical Service (GSS) to explain the reason for Ghana’s revised GDP ratio from 7.1% to 4.6% by the International Monetary Fund (IMF).

He told DAILY GUIDE at the weekend that he did not understand why the IMF could unilaterally revise Ghana’s GD growth rate significantly downward and the GSS will just keep mute “if there was nothing wrong with the GSS data?”

“I am wondering why the GSS has still not found it prudent to explain why the IMF revised Ghana’s much touted 7.1% GDP growth to 4.6% after checking their data.”

The IMF after revealing that Ghana’s debt to Gross Domestic Product (GDP) ratio was higher than what the government had presented as part of the bailout talks with the Bretton Woods institution had to beat a quick retreat to insist that they based their analysis on data from 2013.

Sanjeev Gupta, IMF’s Deputy Director of Fiscal Affairs Department had contradicted the figures submitted by the Bank of Ghana (BoG) indicating the country’s real debt to GDP at a news conference in Washington DC, United States recently.

According to Mr. Gupta Ghana’s GDP was actually 71% contrary to the 55% put out by the NDC led John Mahama admnistration.

Just as the issue was gathering political storm, the IMF made a u-turn with a news release that sought to clarify the fund’s position on the economic situation in Ghana, a move interpreted by many government officials as an exoneration of government and the central bank.

“The latest actual figure available to IMF staff for end-2013 is equivalent to 56 percent of GDP, consistent with the figures released by the Bank of Ghana,” the Fund clarified in a statement signed from its Communications Department signed by Ismaila Dieng.

“The number (71%) corresponds to the level projected at end-2015 under our baseline scenario published in the World Economic Outlook, which assumes the continuation of current economic policies (very gradual fiscal adjustment in 2015, a more depreciated exchange rate, and lower growth related to remaining high vulnerabilities),” the statement further explained further.

However, the expert was of the opinion that “this downward revision means Ghana’s GDP is actually smaller than had first been anticipated and explains why the IMF is maintaining that the Debt to GDP ratio will be over 65% at the end of December 2014.”

Making up estimates

He said he had reliable information from inside sources that the GSS staff explained to the IMF that because they were not getting some key data from the Ghana Revenue Authority, they just made up their own estimates.

“The IMF in its so called exoneration of the Bank of Ghana was careful in choosing its words and sticking to 2013 even though it has  data for 2014,” he said.

“The level of public debt in Ghana is 71 percent of GDP. The number corresponds to the level projected at end-2015 under the baseline scenario published in the World Economic Outlook, which assumes the continuation of current economic policies (very gradual fiscal adjustment in 2015, a more depreciated exchange rate, and lower growth related to remaining high vulnerabilities). The latest actual figure available to IMF staff for end-2013 is equivalent to 56% of GDP.”

2013 vs 2014 data

He contended that the fact that the IMF could only confirm as accurate the 2013 figures even though it had 2014 data suggested that the IMF could not vouch for the 2014 figures even though this was the subject of controversy adding “why did the IMF not refer to the 2014 data even though it has it in its possession? 

“The government went to the IMF for policy credibility and with negotiations going on a possible bailout, it may not be in the IMFs interest to raise more questions about Ghana’s credibility and this could be the reason for its attempt to control the damage done by its officials.”