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Terkper Proves Why President Has Confidence In Him   
 
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14-May-2014  
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Finance Minister, Seth Terkper is proving just why President Mahama has so much confidence in him.

In an interview with Joy FM yesterday, he showed that he is an independent minded person who can hold his own against even the IMF when he rebuffed the claims of the international body that there will be a deterioration of the economy unless there is “specific time-bound action plans” to reverse the downward trend of the economy.

The IMF’s Executive board issued the warning yesterday during consultation with Ghana after government submitted its medium plan meant to salvage the economy.

The IMF’s directors had expressed concern over the emergence of significant short-term vulnerabilities stemming from high fiscal and external current account deficits. These imbalances, they claim, make the country vulnerable to a deterioration of external conditions and are creating pressures on interest rates and the exchange rate.

They claimed if unaddressed, the imbalances risk weakening economic growth and public debt sustainability.

The Fund also urged government to take additional short-term measures to reduce the fiscal and external imbalances because in their assessment, achieving the 2014 fiscal deficit target, which is 8.5 percent of GDP, will be challenging, in light of high interest rates, a depreciating currency, and a possible growth slowdown.

“In light of current imbalances, Directors recommended a more ambitious medium-term consolidation path to stabilize public debt and debt service at sustainable levels. While the risk of debt distress remains moderate, Directors expressed concerns about the high debt service-to-revenue ration. A stronger medium-term adjustment could set off virtuous cycle of lower fiscal deficits and falling interest rates, creating space for social and infrastructure spending and crowding-in of private sector activity.”

But Seth Terkper, downplayed the dire issues raised by the IMF.

He told Joy FM yesterday that the prevailing situation is different from what was assessed by the IFM in February based on the third quarter report of the Ghana Statistical Service. He cited for instance the increasing prices of cocoa and gold, which is positive for the country.

“…the fourth quarter report has been released, and we all know that the economy has grown robustly at 7.4, the IMF has since not revised the 4.5, which was based on an economy, which was going to grow at about 5 percent. So I think that it is about timing issue in our discussions, which we must take into perspective.”

The Finance Minister also stated calls for specific time-bound action plans to reverse the downward trend, reinforces exactly what the government is doing.

He strongly defended the Bank of Ghana’s measures on foreign exchange, which the Fund says would not stabilize the Ghana cedi in the face of rising public spending and expenditure.

“The Bank of Ghana measures to arrest the cedi fall have not failed,” Mr. Terkper emphatically said to rebuff the suggestions of the IMF.

Additionally, estimations by government agencies, Mr. Terkper said, suggest “the trajectory for revenue would be different, the trajectory for growth itself would be different”.

He recalled the President’s show of faith in government’s middle term policies at the ongoing National Economic Forum at Senchi near Akosombo, stating, “First of all, we know that we are going to be moving into a gas era, secondly we know that gold prices have tapered off, if no increased, the decline has stopped, cocoa prices have gone up, the one-year long disruption of gas supply from Nigeria has been resolved, even though we are not getting as much gas as we would, and our won gas is going to come on stream; we should be hopeful.”

He is certain by 2016, Ghana would see a turnaround in its economy.

“No country, and Ghana is not exception, even when it is under an IMF programme turns round its economy in one-ear. And Ghana has had IMF programmes, the minimum period for the turnaround is three years under all the programmes,” he said.
 
 
Source: Daily Post/Ghana
 
 

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