Dr. Albert Touna Mama
The International Monetary Fund (IMF) has described as false, reports that it has ‘downgraded’ Ghana to low-income country status.
The IMF Country Representative, Dr. Albert Touna Mama, described the claims of a downgraded classification as “fake news.”
The so-called low-income agenda started when a private local radio station, Joy FM, on Monday claimed on social media that “The IMF has classified Ghana as a low-income country according to their fiscal monitor classification. #JoySMS.”
It was posted on Twitter at 7:24 am on April 12, 2021 and the post was deleted without offering any explanation for their actions.
It is unclear what motivated Joy FM to make the post, but immediately they put out the tweet, which the IMF said it was false, the opposition NDC elements started attacking the government, particularly Vice President Dr. Bawumia, who is the head of the Economic Management Team (EMT).
The classification of Ghana as a low-income developing country in the IMF’s April 2021 Fiscal Monitoring document is not a downgrade as it has been so in most of the IMF’s previous report even dating back to April 2017, according to Fact-Checkers.
An IMF Fiscal Monitor Report, published on April 1, 2021 presented an overview of the fiscal actions taken by various countries in response to COVID-19 and how they can get ahead of the pandemic and towards economic recovery, and Ghana had been amongst the low-income developing countries.
The IMF’s previous Fiscal Monitor Report produced in October 2019 indicated Ghana was already classified as a low-income developing country, as indicated by Fact-Checkers.
“With the IMF’s Fiscal Monitor Report produced twice each year, we went through all previous reports up to April 2017 and discovered that Ghana had consistently been listed as a low-income developing country in those reports,” the Fact-Checkers said, adding “this goes to make the case that there hasn’t been a downgrade of the country’s classification at least for the 10 previous reports examined.”
The Fact-Checkers said “in response to an email inquiry, Senior Communication Officer at the IMF Press Office in Washington, US, Lucie Mboto Fouda said the classification of countries in the IMF’s Fiscal Monitor is solely for analytical purposes and cannot be related to the World Bank’s classification.”
They said they also contacted Professor Peter Quartey, of the Institute of Statistical, Social and Economic Research (ISSER) at the University of Ghana, who explained to them that there might be a confusion between the World Bank’s classification and the IMF’s classification.
“The World Bank classifies countries according to their per capita income, so if your income is above a certain threshold, then you are classified as a middle income or if it is above a certain threshold then you are a low income country… According to the World Bank classification, we are a low-middle income country.
“The IMF classification looks at fiscal data whereas the World Bank classification looks at income per capita in other words your GDP (total income), if we were to share it equally across the population, what will be each person’s share and that is what we call per capital income.”
Prof. Quartey however, said he believes the World Bank’s classification presents a better classification of a country’s economic status as the IMF’s classification is “a narrow way of defining a country in terms of its economic status.”
Per the World Bank’s latest country classification update of July 1, 2020, Ghana remains a low-middle income country. It is amongst the 50 countries of the world in that category, according to Fact-Checkers.
“The claimants appear to be basing their claim on the erroneous assumption that Ghana, a known lower-middle income country (according to the World Bank) is a now a low-income developing country,” adding, “This is wrong because the two classifications are independent of each other and calculated differently by the two separate organisations.”
Fact-Checkers said “Our findings from about 10 previous Fiscal Monitor reports of the IMF show that Ghana has consistently been classified as a low-income developing country, hence it is false to claim that the 2021 report shows a downgrading of Ghana’s economic classification.”
Terkper Intervention
Even a critic of the government who served as Finance Minister under the Mahama NDC government, said Ghana has not downgraded to low-income status and that the media got the whole thing wrong.
“We’ve not been downgraded if you use the main criteria, which is per capita income which is calculated by the World Bank,” he said on Starr FM in Accra yesterday.
He said “If you are a middle-income country, you must have a revenue of 17-18% income to GDP. At the moment we’re doing about 11%. We must equip GRA (Ghana Revenue Authority) to perform and raise the revenue from the current 11% to at least 15-17%,” he told Accra-based Starr FM.