IMF Deepens Doctored Figures Controversy 

Dr. Philomena Nyarko, Government  Statistician

The International Monetary Fund (IMF) is running for cover after revealing that Ghana's debt-to-Gross Domestic Product (GDP) ratio was higher than what the government had presented as part of the bailout talks with the Bretton Woods institution.

Sanjeev Gupta, IMF's Deputy Director of Fiscal Affairs Department, had contradicted the figures submitted by the Bank of Ghana (BoG), revealing the country's real debt-to-GDP ratio last Wednesday at a news conference in Washington DC, United States.

 
71% vrs 55%
According to Mr Gupta, Ghana's GDP was actually 71%, contrary to the 55% put out by the Mahama-led National Democratic Congress (NDC) administration.

Just as the issue was gathering political storm, the IMF made a u-turn with a news release that sought to clarify the Fund's position on the economic situation in Ghana—a move interpreted by many government officials as an exoneration of the country's central bank.

 
IMF Clarification
A statement signed by Ismaila Dieng of IMF's Communications Department said Mr Gupta's statement was rather their projected figure for 2015.

'The latest actual figure available to IMF staff for end-2013 is equivalent to 56 percent of GDP, consistent with the figures released by the Bank of Ghana.'

The statement further said: 'The number (71%) corresponds to the level projected at end-2015 under our baseline scenario published in the World Economic Outlook, which assumes the continuation of current economic policies (very gradual fiscal adjustment in 2015, a more depreciated exchange rate, and lower growth related to remaining high vulnerabilities).'

 
Lingering Doubt
However, some economic experts are insisting that the IMF, in an attempt to explain away the emerging issues, has left more questions than answers.

An expert told DAILY GUIDE that 'interestingly the IMF totally ignored the 2014 figures provided by the Bank of Ghana and rather chose to stick to the 2013 figures to do the damage control it sought to do, despite it being the norm that the latest available data is always used by the Fund.'

He said 'it should be noted that the end-of-year 2013 debt-to-GDP ratio of 55.5% is not much in doubt. The real issue is about the 2014 data of the Ghana Statistical Service and the Bank of Ghana vis-a-vis what the IMF found out and believes after its recent visit to Ghana on the Bailout talks.'

MPC Admission
The expert reminded the public that the Bank of Ghana in September 2014, at its last Monetary Policy Committee (MPC) meeting, stated emphatically that Ghana's debt-to-GDP ratio had declined from 55.5% in December 2013 to 55.4% as at June 2014, despite the BoG's own admission that the debt stock had increased by an amazing GH¢11.5billion in the first six months of 2014, representing a 22% increase in the total debt stock since the end of 2013.

He quoted the MPC as saying in September that 'the stock of public sector debt as at the end of June 2014 was 55.4 percent of GDP, marginally lower than the 55.5 percent observed at the end of December 2013.'

 
Debt Stock Cooked
He said 'Ghana's debt stock was a total of GH¢52.1 billion as at December 2013, according to the Bank of Ghana. This figure had shot up to GH¢63.6 billion, according to the Bank, as at June this year (a growth of GH¢ 11billion or 22%); on the other hand, the Bank of Ghana is saying that the debt-to-GDP ratio had rather declined to 55.4%.'

These figures, in the opinion of the expert, do not add up, leaving a wide gap to be filled.

The expert said the debt stock figure provided by the BoG 'flies in the face of the IMF figures for 2014 as the IMF projects that Ghana's debt-to-GDP at the end of 2014 will be a colossal 65.3%.

'Clearly, there cannot be a 10% jump in the debt-to-GDP figures in only a space of six months, especially when an increase of GH¢11 billion or 22% in the debt stock in the first six months had rather seen a decline in the debt-to-GDP ratio and this is the clearest indication that the Bank of Ghana's 2014 figures were cooked to make the books look good. This was primarily done to make Ghana's debt look sustainable.'

 
IMF's Logic
He said per the IMF's projection for end of 2014, it would mean that 'rather than declining, Ghana's debt-to-GDP had even crossed the 60% mark as at June 2014, contrary to the Bank of Ghana's figures.

'The Bank of Ghana figures which suggested a marginal decline in the debt-to-GDP ratio as at June 2014 despite the huge increase in the debt stock over the last six months, was primarily based on the Ghana Statistical Service's GDP data which had revised its data to show that Ghana's GDP for 2013 had grown by 7.1%.'

He said the figures made the size of Ghana's GDP large and as a result, lowered the debt-to-GDP ratio saying, 'Thus because of the inflated GDP according to the GSS figures, Ghana's debt seemed sustainable.'

 
Cooked Figures
The expert pointed out that the IMF, after their initial visit to Ghana to discuss the bailout, quickly realised that the GSS numbers on the GDP 'were cooked' and quickly revised the GDP growth from 7.1% to 4.6%.

'This downward revision means Ghana's GDP is actually smaller than had first been anticipated and explains why the IMF is maintaining that the debt-to-GDP ratio will be over 65% at the end of December 2014.'

By William Yaw Owusu