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General News for Saturday, May 9, 2020
Source: www.ghanaweb.com
2020-05-09
IMF Country Representative Dr. Albert Touna Mama
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The International Monetary Fund (IMF) has clarified that the Government of Ghana did not hide the figures from them in its presentation to guarantee the $ 1b Dollar COVID-19 relief loan.
The government has been accused by the NDC opposition of presenting conflicting economic figures, specifically on the fiscal deficit and the gross international reserve.
According to Fact Check Ghana and the NDC, the Ghanaian government had in its budgets the Parliament for 2018 and 2019 had fiscal deficits of 3.0% and 4.4% of GDP, but changed the figures to 7.0% and 7.5% of GDP to the IMF for 2018 and 2019. For the Gross International Reserve, Fact Check Ghana and the NDC also alleged that the government quoted 6,800 and 8,100 for 2018 and 2019 in its budget to Parliament, but changed the figures to 5,317 and 6,634 for the same period, respectively, IMF.
But the IMF has exonerated the government of accusations of deliberate deception, insisting that the government did not present incorrect figures, or hide figures.
Speaking on the Joy FM News File news analysis program on Saturday, IMF Country Representative Dr. Albert Touna Mama said his team is aware of each figure and explained that the difference in the figures is the result of a difference of opinion between the IMF and the government in arriving at figures for two metrix; fiscal deficit and gross international reserve.
“We try as much as possible to stay out of the discussions, but I think we feel compelled here to accept the call from the Newsfile team just to clarify the statements made by the Ghana fact-check,” said IMF Country Director .
“Basically they said and I quote:” The data presented by the government to the IMF is different from that contained in the budget statements. “
“Regarding the data we receive with which we work, in this debate, there is nothing new that we did not know,” said the IMF Country Director.
“We would like to focus on two metrixes: the fiscal deficit and the gross international reserve.”
Fiscal deficit
The director of the IMF in the country said that the IMF and the government of Ghana have different points of view on the calculation of the fiscal deficit and have agreed not to agree.
He said that while the IMF calculates the fiscal deficit with the costs of the financial sector and the costs of the energy sector, the government firmly argues that the fiscal deficit should be calculated without the cost of the financial sector and the cost of the energy sector.
The IMF Country Director therefore revealed that the fiscal deficit of 7.5 for 2019 in his statement included payments from the financial sector and payments from the energy sector, while 4.5 in the 2019 budget does not include payments from the financial sector and the financial sector.
“The comparison I see is comparing two different things on one side and we are aware of these differences; they are not new.”
“We may agree to disagree on how we have to capture it, but I think there is no new information here.”
In an emphatic admission that exonerates the government, the IMF Country Director said that the fiscal deficit of 7.5 in his statement was a figure that they generated from the data that the government presented to them, after having added the payments from the financial sector and energetic.
“Our number includes these two elements (financial sector payments and energy sector payments) and we know why the Governor of the Bank of Ghana made the decision not to have these two elements in fiscal deficits.”
Gross International Reserve
Once again, the IMF Country Director said that the differences in the figures bothered the different calculation methodology, and not necessarily an attempt to hide the figures by the government.
He added that the IMF has been aware of the government’s methodology to calculate the Gross International Reserve since the beginning of the year because the Governor of the Central Bank made it clear at the beginning of the year.
“When it comes to the Gross International Reserve, we have our definition; a definition that we think is correct. But the Bank of Ghana also has a different understanding of what the Gross International Reserve should take into account. And the difference here is that the Bank of Ghana represents the Petroleum Fund, the Heritage Fund and the Stabilization Fund as part of the Gross International Reserve and I think that point was clearly made earlier in the year by the Governor of the Bank of Ghana. difference and that is the position they have taken. “
“The Bank of Ghana’s argument is that if the momentum comes to an end and they need some additional buffers if they are in a crisis situation, they can go to parliament and request access to the oil fund. What we are saying is that maybe it is more complicated than that, but we can agree not to agree and present the numbers that we think are more aligned with other countries because that is our objective. “
On whether it is the IMF’s preference that the government should include payments from the financial sector and payments from the energy sector when preparing financial reports, the IMF Director in the country said that the IMF does not necessarily need to have a preference.
“We don’t need to have a preference. These statements are at the end of a report. When you review these reports, all of these discrepancies are discussed and I think the budget statements also go into these discrepancies. So you can’t go through these reports and at the end of the report compare apples and peers. You should review the reports and understand what the numbers have been presented. “
The government is not wrong
The Director of the IMF added that it cannot necessarily be wrong that the government does not include certain elements in the determination of fiscal deficits.
He cited an example of an agreement with the government to reserve financial sector payments to determine the fiscal deficit at some point in the Ghana-IMF program, which ended in 2019 because the financial sector payment was not anticipated during the program’s original design.
“For example, during the program that expired in April 2019, when the financial sector problem arose, because initially in the design of the program, this is something that was not anticipated, and the program aimed to achieve some fiscal objective, a The decision was made that the financial sector should really be served. And if you really want a true picture of the government’s fiscal effort, we must eliminate the cost of the financial sector. Because this is a necessary action so that it can generate economic budgets. going forward, so we agreed to that. In paying the financial sector, we agreed to put them aside and just measure fiscal effort without the cost of the financial sector. “
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