The International Monetary Fund’s team which visited Ghana between 17th to 27th September to conduct the seventh review of Ghana’s Extended Credit Facility has published its preliminary findings on Ghana’s economic prospects.
In statement on the website of the IMF, the team observed that “growth prospects remain strong, supported by a robust oil and cocoa production. Inflation has remained in single-digits. S&P upgraded Ghana’s ratings from B- to B with a stable outlook in September 2018”
On the team’s observation of the cedi’s performance, the IMF stated that “Ghana has been affected by the volatile environment for emerging and frontiers markets, which has exerted pressure on the currency resulting in cedi depreciation”
In the heat of cedi depreciation debate, Vice President Dr. Mahamudu Bawumia at a policy summit in Tamale stated that “I will like to note again that over the last few months the US dollar has strengthened against many currencies globally: Argentina – 50.2%, Turkey -42%, South Africa – 19.2%, India – 11.2%, U.k – 4.29%, Ghana – 7%”
Dr. Bawumia argued that “in this context the exchange rate of the cedi to the US dollar remained relatively stable when compared with movements in other currencies against the US dollar. The reason for this is because of the relatively stronger fundamentals”
On the economy, both Dr. Bawumia and the IMF cited the recent Standard & Poor ratings to buttress their respective conclusions that Ghana’s economy is strong. The Vice President at his lecture stated “macroeconomic performance shows quite clearly that Ghana’s economic fundamentals are strong. This was confirmed last week by Standard and Poor’s (S&P) Global which upgraded Ghana’s sovereign credit rating from B- to B with a stable outlook, the first upgrade by S&P for Ghana in 10 years!” The IMF’s mission also concluded that Ghana’s economy “remains strong” arguing that “S&P upgraded Ghana’s ratings from B- to B with a stable outlook”
The IMF team’s assessment lends support to Vice President Dr. Bawumia’s view that the economy is strong and the cedi’s marginal depreciation cannot be blamed on weak economic fundamentals.
