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Fake news alert; IMF Downgrades Ghana to low income status, Charles Opoku writes

Ignore the fake news that IMF has downgraded Ghana to Low Income Country. Note that such grading and classifications are done by the World Bank and not IMF.

On July 1, 2011, Ghana moved from low-income to lower middle-income status, according to World Bank country classifications. This giant strides came on the account of the discovery and production of oil in commercial quantities (credit to President Kuffour and the NPP) making Ghana the fastest growing economy in the world, with a projected GDP growth of 13.4% then.

The massive work done by the Kuffour Administration on the economy, especially on job creation and implementation of social protection (pro poor) policies like the NYEP, LEAP, NHIL etc. helped Ghana to leapfrog from the dire state of hopelessness to a state with a cistern of economic opportunities, cutting the country’s poverty rate in half, from 52.6% to 21.4% between 1991 and 2012.

Between 2013 and 2016, the economy experienced lots of setbacks as a result of endemic mismanagement, corruption and incompetence leading to massive graduate unemployment, nationwide dumsor-dumsor, acute inefficiencies in the social protection system that compromised social mobility etc. This unfortunate development deprived Ghana from a possible upgrade by the World Bank to a fully fledged Middle Income status, as the fight against poverty and the promotion of shared prosperity was significantly compromised - the poverty rate worsened, from the 2012 figure of 21.4% to 23.4% (poverty rate figures from the World Bank)

Between 2017 and 2019, the economy went through rapid transformation with widespread and far reaching positive effects on Ghanaians. The social protection system has been revived with the reintroduction of policies like the trainees allowance and the introduction of new ones like Free SHS and the improvement of existing ones like the School Feeding program, LEAP and NHIS. Economic growth picked up, with an annual average growth rate of 7% between 2017 and 2019.

The emergence of the COVID-19 pandemic and its concomitant economic challenges in 2020 eroded some of the gains, specifically GDP growth and employment. Economic growth fell below 1% from the average growth figure of 7% between 2017 and 2019. About 30,000 jobs out of the about 3 million jobs created were lost due to COVID-19.

The Goodnews is that majority of lives and livelihoods (jobs) were saved by the timely interventions introduced by the government - from stimulus packages to businesses to households support and assistance to the poor and vulnerable. These initiates helped a lot of people from slipping back to the poverty threshold (which is US$1.90 a day).

Ghana has been hailed globally for the competence and solid leadership it brought to bear in the fight against COVID-19. Admittedly, there are lingering challenges like revenue shortfalls and huge debt; however, these vulnerabilities are not enough for a downgrade to low income status.

The World Bank is yet to release its official figures from its Poverty headcount ratio at national poverty lines (% of population) in an era of pandemic; however, Ghana has been tactful, proactive and resolute in fighting poverty head-on, even in the era of COVID-19, so it wouldn’t possible that the poverty rate will worsen let alone Ghana being slapped with a downgrade to low income status.

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Charles Opoku Ghana IMF Kuffour Administration NHIL


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