IMF Reviews Ghana’s Growth Forecast

The International Monetary Fund (IMF) has started the process to validate data to enable it to revise upwards its growth forecast for Ghana.

This is after it has satisfied itself that the economy will grow stronger than initially projected, based on recent developments and provisional data.

The fund has started consultations with some relevant state institutions to obtain and validate data to feed into its revision of the country’s economic outlook, especially the growth position.

The Ghana Resident Representative of the IMF, Dr Albert Touna Mama, told the Daily Graphic’s specialised programme on banking and finance, Banking & More, last Thursday that the fund was optimistic that the economy would grow around two per cent — above the IMF's earlier forecast of 0.9 per cent and the government's target of 1.5 per cent.

The fund had earlier cut its growth forecast for Ghana from 6.1 per cent at the beginning of the year to 1.5 per cent in April, before dropping it further to 0.9 per cent around June.

Areas covered

Dr Touna Mama was responding to a range of questions on Ghana’s economy, including the impact of the coronavirus disease (COVID-19) pandemic on growth and debt, the utilisation of the IMF’s $1 billion loan to the country and its take on the state of the economy before and after the December general election.

In the interview, which is scheduled to be broadcast at 9. a.m. today and Thursday, the resident representative also expressed a view on whether or not the IMF expected Ghana to return to the Bretton Woods institution next year for technical and financial support in managing the economy.

GSS data

Commenting on the impact of the COVID-19 on growth, Dr Touna Mama said from the onset, the IMF was convinced that economic growth in Ghana would remain in the positive territory for 2020, although the fluid and uncertain nature of the situation made it difficult to be exact on projections.

Giving the bases for the fund's brighter prospects for the economy lately, he said data from the Ghana Statistical Service (GSS) showed that the COVID-19 shock on the economy was lower than initially feared.

He said while the 3.2 per cent contraction in growth for the second quarter did not come as a surprise, the rate of negative growth was lower than previously anticipated.

“Our current forecast is that the collapse of economic activities in the second quarter will be larger than what we are seeing. So, in that context, we are currently thinking about revising upwards our growth projections that currently stand at 0.9 per cent for 2020.

“There is a chance that we may revise that below two per cent, but we need to see the data,” he said, noting that the upward revision in growth would be a direct implication of the release of the data by the GSS.

Dr Touna Mama added that the fund expected growth in the third quarter to be better than that of the second quarter.

Key drivers

Beyond the GSS data, he said, the fund had noticed significant increases in economic activities and a pick-up of business recovery recently.

He said Google mobility data had indicated increased activities in urban areas throughout the country, signifying an appreciable return to normalcy.

On the areas that could drive the expected strong growth, Dr Touna Mama mentioned information and communications technology (ICT) and digital services, pharmaceutical and health services, agriculture and manufacturing as some of the key areas that the fund expected to drive growth.


Touching on public spending, the resident representative said it was commendable that the government found a fine balance between spending to contain the virus and its impact on lives and spending on previously budgeted items.

He said the several rigidities in the budget meant that the government had less space to navigate around as far as public spending was concerned.

He, however, said Ghana should start finding creative ways of sharing the financial burden of the pandemic with the current generation, instead of putting it on future generations through loans.

“In the medium term, there will definitely be merit in having more burden sharing, reviewing perhaps the social contract to ensure that the burden is not just on future generations, because that is what debt is doing.

“Perhaps there is room to bring the burden on to this current generation,” Dr Touna Mama said.