Government creating false impression to IMF that we don’t need debt restructuring – Mensah Thompson

The Executive Director of the Alliance for Social Equity and Public Accountability (ASEPA) has said the government is engaging in financial misreporting in its negotiations with the International Monetary Fund (IMF).

Mr Mensah Thompson says officials of government in their recent talks with the IMF team bloated the third quarter Gross Domestic Product (GDP) figure, which gives a false impression that the country is not debt distressed.

He noted that the increase in the figure would lead to a lower debt-to-GDP ratio, giving the impression that Ghana's debt is sustainable “when in fact we all know it's not.”

In a Facebook post on Monday, October 10, Mr Thompson said, “At that engagement, the government provided to the IMF a GDP figure of ¢590 billion when its projected GDP for the end of the year 2022 was actually ¢509 billion.”

“We don't know what the ¢81 billion or 15% increase in GDP value is attributed to considering the economic challenges we have encountered this year.

Again, your end-of-year projection in the 2022 budget is ¢509 billion; how did the government come by ¢590 billion at the beginning of the third quarter?” he asked.

With the current GDP value of ¢590 billion, Mr Thompson stated that the debt to GDP ratio will be 68% when “actually our debt to GDP is over 90%.”

Again, the GDP value of ¢590 billion as presented to the IMF would be used to calculate the revenue-to-GDP ratio. This brings the revenue to GDP ratio to 14%,” Mr Thompson added.

“Now this 14% would be used to back a false narrative to the IMF that the problem Ghana is facing is not corruption, reckless and wasteful expenditures but revenue generation and that it is Ghanaians who are not paying taxes.

All this would inform the type of programme the IMF would admit Ghana to, a programme that emphasises revenue generation instead of cutting the wastefulness,” he argued.

He described the situation as a “major disappointment”, adding that the Ken Ofori-Atta and Bawumia-led economic management team may not end the financial misreporting and creative accounting anytime soon.

“The Government wants to do the same things that led us into this ditch, profligate expenditures, ostentatious spending and unwarranted largesse at the expense of the poor taxpayers.

“But most importantly, the imminent IMF programme would be very aggressive on taxes because, guess what?, the government has told the IMF it is not reckless but it is you who are not paying your taxes.”