IMF projects Ghana’s economy to rebound to 4.8% growth in 2021 on mining, services

by Justice Lee Adoboe

ACCRA, May 18–The International Monetary Fund (IMF), projects a rebound in the Ghanaian economy to a 4.8 percentage growth with strong recoveries in the extractive and services sectors after the downturn in 2020, a release said here on Saturday.

   The release issued after officials of the fund held discussions with Ghanaian authorities under the Article 1V Consultations from April 28 to May 12, said the government’s policy interventions in 2020 had been critical to safeguarding livelihoods and paved the way for a faster recovery in economic activities.

   “Real Gross Domestic Product (GDP) growth is projected at 4.8 percent in 2021, driven by a rebound in mining and services. Inflation is expected to remain around the central bank’s target of eight percent by end-2021,” said the statement.

   The release added that  Ghana’s Covid-19 Alleviation and Revitalization of Enterprise Support (CARES) program had the potential to be transformative and inclusive for the Ghanaian economy.

    “The impact of the CARES program will be buttressed by its emphasis on small and medium enterprises, and digitalization while leveraging the African Continental Free Trade Area,” said the release.

   The positive signs notwithstanding, the Fund urged the Ghanaian authorities to ensure that fiscal consolidation relied more on “progressive revenue and spending measures while guaranteeing financial support to the most vulnerable and social safety nets.”

   The release signed by Carlo Sdralevich, leader of the IMF’s virtual consultations with Ghana described the economic impact of COVID-19 on Ghana in 2020 as severe, slowing activities in the extractive industry.

   It said the outbreak also resulted in “a collapse of hospitality and retail services, including the informal sector that especially employs female workers.”

   The IMF urged the Ghanaian authorities to take urgent steps to solve the energy sector challenges, to avoid the negative impacts of power shortage on the economy.

   “Despite progress in rationalizing power generation, the financial viability of the energy sector affects people’s daily life and will remain a drag on productivity and a driver of public debt if not addressed decisively. Improving efficiency and collections remains a priority to achieve substantial savings.” It urged.