The clarification by the IMF on the macro-fiscal data has generated further political debate about the economy. The data published by the IMF shows the true state of the economy.
The whole issue about misreporting is not about misreporting of economic data to IMF, but to the people of Ghana through the budget. Economy watchers are inclined to believe that the data published by the IMF is true about the Ghanaian economy. So what is the IMF explaining to us?
The people of Ghana know the deficit in 2019 to be 4.5% but the IMF knows the true state of the deficit in 2019 was 7.5%.
Watchers are inclined to believe that the correct data was presented to IMF and what is now known as misreporting is what was presented to Parliament via the budget.
The explanation by IMF is strange and may be tagged as involving in domestic politics. We ought to be guided by our Constitution and financial management principles, objectives and strategies enshrined in the Public Financial Management Act, 2016 (Act 921) in which the finance minister is the main executive member with financial management responsibility. It is therefore the finance minister who should face the country to explain the data agreed upon with the IMF. It was unnecessary for the IMF to attempt to do what the finance minister should be doing by the dictates of the PMFA.
Now to the substantive issues, let us take for example that Ghana raised $2bn in a year but spent $3bn and decided to divide the extra $1bn into $600M and $400M and stated in its financial statement that over expenditure was $600M but disclosed in the notes to the financial statements that the country over spent another $400M which was also approved by Parliament. In this case, how much was the over expenditure that parliament approved on behalf of the people? The answer is $1bn.
Now, why did IMF accept the figures presented by government in its dataset? The obvious answer is that it is the true picture about the Ghanaian economy, therefore the true picture of the deficit, reserves, debt to GDP ratio and primary balance as well as GDP growth presented by IMF from the data supplied by government remain the true state of the Ghanaian economy.
Ask any member of the IMF team, a member of the minority or member of government that if they are taken as consultants to look at the macro-fiscal data in the budget and that of IMF data for a client to provide macro-fiscal situation of Ghana for critical and informed decisions, will they look at the true state as presented by IMF or not?
Accountants will tell you the purpose of the notes to an account gives extra critical information that you must use without which your assessment of the account is meaningless and incomplete.
The separation or no separation of financial sector and energy costs does not take away the fact that the true state of the economy is what the IMF data presented and the granting of the $1bn Rapid Credit Facility was based on the true state of the macro-fiscal situation, which is also the more reason the IMF attached the macro-fiscal data of Ghana to the disbursement letter to Ghana.
The “disagree to agree” or “agree to disagree” clarification by the IMF does not change the premium Ghanaians, international institutions and investors place on the true state of the economy as reported by the IMF from government’s own data.