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Business News of Wednesday, 8 June 2016

Source: Myjoyonline.com

Economist plays down IMF, gov't's economic gains report

An economist with the University of Ghana Business School has played down an IMF report hailing Ghana's economy.

Professor Godfred Bokpin insists government's own macroeconomic indicators do not show a booming economy and has cautioned government against celebrating a "jobless growth" in the economy.

His comments are in reaction to a report by the IMF which suggests a positive growth outlook for the economy.

The government has been quick to hail the report, with the Communications Minister Omane Boamah issuing a statement to trumpet government's economic achievements.

The statement captured part of the IMF report which puts Ghana’s GDP per capita in current terms in the year 2015 at US$1,340.4.This represents 5.9% increase over the 2008 figure of US$1,266.1.
"Our current per capita income is also higher than that of Cote d’Ivoire (US$1,314.7), Senegal (US$913.0) and Kenya (US$1,338.5)," the statement said.

The statement also pointed out that Ghana has achieved the Millennium Development Goal 1 target of reducing the proportion of poor people by half by 2015 in 2013- a clear two years ahead of the deadline.

A recent World Bank study, “Poverty Reduction in Ghana: Progress and Challenges” supports this.

On education, health, and other social interventions the report also shows a marked improvement in investment which has culminated in higher standards of education as well as an improved life expectancy.

Omane Boamah insists “government takes the position that mere economic growth and its associated indicators are necessary but not sufficient measurements of human well-being.”

But in a reaction, the head of Finance Department at the University of Ghana Business School, Professor Godfred Bokpin said Ghana is performing below its potential.

He said no "objective" Ghanaian will be convinced by government and IMF's claim of a booming economy.

The provisional figures for 2016 puts the GDP growth at 3.9%. That is not sufficient enough. So we have seen some growth but we have seen a bit of a jobless growth.

He said government should rather focus its attention on achieving an "all inclusive growth."

"We should be looking at reducing interest rate, we should be looking at inflation being far below 5 per cent but look at where we are now?
The inflation rate for April 2016, stood at 18.7%, a figure the Economist believes is unacceptable.

In the face of these figures, the Economist says government's claim will be difficult to accept.

"Given what government has said vis-a-vis the macro variables, as at this time, it is very difficult to tout their achievement to the extent that very objective people can actually sympathise with," he said.