World Bank Warns: Ghana Tipping Off The Economic Cliff

The World Bank has admonished Ghana to cut its coat according to size. It worries that while most African countries are experiencing reduction in inflation, the same cannot be said of Ghana. The gold, cocoa and oil rich West African country of 25 million people currently has an inflation of 15.5 percent and a domestic debt stock of Ghc55.6 billion. The local currency has been on a tumbling trend since the beginning of 2014. It has fallen in value by about 18 percent. The Bank of Ghana came out with a tall list of measures to salvage the cedi against the dollar and other international currencies of trade. The World Bank is advising the government to deal with the real issues underpinning the poor macroeconomic conditions. At a press conference on the sidelines of the IMF/WB Spring Meetings in Washington, World Bank President Jim Yong Kim said Ghana must strengthen its economic fundamentals to bounce back to healthy ways. ��The message is really get back to the fundamentals, tackle the basics; if the fundamentals are in good shape then the market would recognise that and punish Ghana less,� Kim told journalists. Also Chief Economist of the Bank�s Africa Region, Francisco Ferreira is of the conviction that Ghana can rise above its current economic woes if the Government learnt got prudent with its economic policies. He said: �A number of decisions taken, including large raises in public sector or so have contributed to a fiscal situation in Ghana that is less comfortable than I think anybody in Ghana would like or we will like,� adding that: �The balance of payment situation in Ghana, where there isn�t an enormous amount of reserves; let�s not sugarcoat things.� �The macroeconomic situation in Ghana does require attention,� Ferreira pointed out while observing that while inflation is generally falling on the Continent, �it is definitely not falling in Ghana.� �When we talk about fiscal deficit rising across the continent, they certainly have been rising strongly in Ghana,� he stressed. In his view, it is important that Ghana and other emerging economies lived within their means to salvage their economies. �We must live within our means. Fiscal deficits above 10 percent of GDP are very dangerous and they are particularly dangerous when especially external financing can be challenging," he added