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04.09.2006 General News

Ghana to halve poverty before 2015 - IMF Official

Ghana to halve poverty before 2015 - IMF Official
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The International Monetary Fund (IMF) said Ghana, at her current development pace, could achieve the Millennium Development Goals (MDG) of halving poverty in 2012 ahead of 2015 deadline.

Briefing the media in Accra after a Staff Mission to Ghana, Senior Advisor in the African
African countries, Ghana's economic performance over the last few years has been very satisfactory with real GDP growth increasing from 3.7 per cent in 2000 to 5.9 per cent in 2005.

Mr. Itam noted that the situation had led to a more than doubling of the growth of real GDP per capita from 1.2 per cent in 2000 to 3.2 percent in 2005.

The delegation held discussions on the Sixth and final review under the Poverty Reduction and Growth Facility (PRGF) arrangement with the IMF with President John Agyekum Kufuor, Minister of Finance and Economic Planning, Mr Kwadwo Baah-Wiredu, the Governor of the Bank of Ghana, Dr. Paul Acquah, Ghana Economic Management Team.

Ghana has a three-year PRGF arrangement with the IMF to support Ghana's poverty reduction strategy approved in May 2003 for 274.20 million dollars. This was later extended until October 31, 2006.

In the last few years, economic activity has broadened and while agriculture continues to be a key sector, manufacturing and construction are emerging as important contributors to overall growth.

Mr Itam said even though the process of disinflation had not been smooth, 12-month inflation declined from 40.5 per cent in 2000 to 14.8 percent in 2005.

Inflation has been well contained more recently, apart from the impact of oil price increases in the context of high world crude prices and the recent adoption of a full-cost pass-through regime. The inflation figure declined to a single digit levels in March- April 2006 for the first time in more than 20 years.

Mr. Itam described policy implementation that has underpinned the good economic performance throughout the programme period of 2003-2006 as satisfactory.

Overall deficit has reduced from 6.7 per cent of GDP in 2003 to 3.0 percent of GDP in 2005. Total public debt declined substantially as a result of both fiscal prudence and debt relief under the HIPC Initiative and the Multilateral Debt Relief Initiative went down from about 24 per cent of GDP in 2000 to 11 percent of GDP in 2005.

Mr Itam said he was happy that government was able to maintain fiscal consolidation resulting in a significant reduction in domestic debt service.

There was a sharp drop in interest rates while poverty-related spending increased from 4.7 per cent of GDP in 2001 to 8.5 percent in 2005.

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