The International Monetary Fund (IMF) has clarified that the Government of Ghana did not conceal figures to them in its presentation to secure the $1b Dollar COVID-19 relief loan.
The government has been accused by the opposition NDC of presenting conflicting economic figures, specifically on fiscal deficit and gross international reserve.
According to Fact Check Ghana and the NDC, the government of Ghana had in its budgets to Parliament for 2018 and 2019 presented 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 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 to the IMF.
But the IMF has exonerated the government of allegations of deliberate deceit, insisting that the government did not submit wrong figures, neither did it conceal figures.
Speaking on Joy FM’s news analysis program News File on Saturday, IMF Country Representative, Dr Albert Touna Mama, said his outfit is aware of every figure and explained that the difference in figures is as a result of a difference in opinions 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 debates but I think we felt compelled here to accept the call from the Newsfile team just to clarify statements made by fact check Ghana,” the IMF Country Director said.
“They basically said and I quote: “the data presented by the government to the IMF are different from those in budget statements.”
“When it comes to the data we received that we worked with, in this debate, there is nothing new that we did not know about,” said the IMF Country Director.
“We will just like to focus on two metrics; the fiscal deficit and gross international reserve.”
The IMF Country Director said the IMF and the government of Ghana have different views on the calculation of fiscal deficit and they have agreed to disagree on it.
He said while the IMF calculates fiscal deficit with the financial sector costs and energy sector costs, the government argues strongly that the fiscal deficit ought to be calculated without the financial sector cost and energy sector cost.
The IMF Country Director, therefore, revealed that the 7.5 fiscal deficit for 2019 in their statement included the financial sector payments and energy sector payments, while the 4.5 in the 2019 budget does not include the financial sector and energy sector payments.
“The comparison that I see is comparing two different things on one side and we are aware of these differences; they are not new.”
“We can agree to disagree on the way 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 the 7.5 fiscal deficit in their statement was a figure they generated themselves from the data government presented to them, having added the financial and energy sector payments.
“Our number includes these two elements (financial sector payments and energy sector payment) and we know why the Governor of Bank of Ghana made the decision not to have these two elements in the fiscal deficits.”
Gross International Reserve
Again, the IMF Country Director, said the differences in figures bothered on the different methodology of calculation, and not necessarily an intent to hide figures on the part of the government.
He added that the IMF has been aware of the government’s methodology of calculating the Gross International Reserve since the beginning of the year because the Central Bank Governor made that clear at the beginning of the year.
“When it comes to Gross International Reserve, we have our definition; definition that we think it is the right one. But the Bank of Ghana also has a different understanding of what Gross International Reserve should account for. And the difference here is that Bank of Ghana accounts the Oil Fund; the Heritage Fund and the Stabilisation Fund as part of Gross International Reserve and I think that point was clearly made at the beginning of the year by the Governor of the Bank of Ghana. That is the difference and that is the position that they have taken.”
“The argument by the Bank of Ghana is that if push comes to shove and they need some additional buffers if you are in a situation of crisis, you can go to parliament and request access to the oil fund. What we say is that perhaps it is more complicated than that but we can agree to disagree and present the numbers that we think are more aligned with other countries because that’s our objective.”
On whether it is the IMF’s preference that the government must include financial sector payments and energy sector payments when preparing financial reports, the IMF Country Director said the IMF doesn’t necessarily need to have a preference.
“We don’t need to have a preference. These statements are at the back of a report. When you go through these reports, all these discrepancies are discussed and I believe that the budget statements also goes into these discrepancies. So you cannot go through these reports and at the end of the report compare apple and peers. You need to go through the reports and understand what are the figures that have been presented.”
Government is not wrong
The IMF Director added that it may not necessarily be wrong for the government not to include certain elements in determining fiscal deficits.
He cited an example of an agreement with the government to set aside financial sector payments in determining fiscal deficit at some point under the Ghana-IMF program, which ended in 2019 because the financial sector payment was not anticipated during the original design of the programme.
“For example during the program that expired in April 2019, when the issue of the financial sector came up, because initially in the design of the program, this is something that was not anticipated, and the program aimed to achieve some fiscal target, a decision was made that the financial sector really needed to be taken care of. And if you really want a true picture of the fiscal effort that the government is making, we need to strip out financial sector cost. Because this is a necessary action so that you can generate economic quotes in the future so we agreed on that. On the financial sector payment, we agreed to put them aside and just measure the fiscal effort without financial sector cost.”