Daniel Nonor
14 January 2009
The immediate past Minister of State at the Ministry of Finance and Economic Planning, Dr. Anthony Akoto Osei has advised the Mills led administration to be wary of the International Finance institutions when they begin to heap praises on them, about the state of the economy.
Speaking on Joy FM -a local radio station in Accra, Dr. Anthony Akoto Osei descended heavily on what is widely perceived as the World Bank's tradition of praising African governments on the state of their economy whiles in office only to spank them when they are about leaving office.
He recalled that "During the Rawlings regime he was hailed and condemned, and President Kufour's time too he was hailed. At the end he is being condemned. My advice to the new administration is that, yes, initially they would be hailed but they need to be extra careful. For me the $250m that is being offered should be looked at very closely because it may come with strings attached."
His advice comes at the heels of the recent World Bank report presented to the new administration which indicated a gloomy macroeconomic projection for the country in the coming years.
In that report, the World Bank warned that the Mills led administration would inherit high fiscal and balance of payment deficits that were unsustainable, given the current state of international financial markets.
It further stated that the country would have to spend 14 per cent of its total Gross Domestic Product (GDP) to service its fiscal deficit, while the balance of payment deficit would be larger.
The World Bank explained that in the past, the fiscal deficit had been financed from proceeds from the privatisation of state assets and the leftovers of the Eurobonds issued in 2007, while the current account deficit was financed with foreign reserves; these revenue sources the bank said were no longer available.
The World Bank, however, pledged to support the new government to among other things, address the macro-economic imbalances, attain macro stability and protect the poor and the vulnerable in Ghana.
The Bank has disclosed it disclosed that Ghana had a generous IDA allocation of about $450 million per year and a large IDA portfolio that the bank could help to "front-load" for urgent use.
The World Bank's Country Director in Accra, Ishac Diwan has, however, stated that Ghana's gloomy economic outlook was transitory and would take shape when the country begins drilling its oil deposits.
The 2007 global report, compiled by the World Bank and the International Finance Corporation, the private financing agency of the World Bank Group titled "Doing Business 2007: How to Reform," placed Ghana in the top ten of 175 countries surveyed, as being most serious in reforming its business environment.
The report placed Ghana at the ninth position, joined in the top ten by only one other Africa country, Tanzania, which was at number ten.
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