Former Finance Minister of Ghana Seth Terpker has stated that the country cannot be classified as a low-income country because, the indicators being used to measure the economic growth of developing countries, by the International Monetary Fund (IMF) differ.
He said the country isn’t behaving as a lower-middle-income country hence, the reason it has been downgraded to a low-income developing country.
In an interview with GhanaWeb’s Amos Ekow Coffie, Mr Terpker said statistics are proving that the country’s Gross Domestic Products (GDP) is growing and this is proof that the country cannot be classified as a low-income country.
“The IMF physical affairs department every year during the spring meetings and annual meetings issues what we a call physical data and there are other departments under the IMF that also issue reports, the Africa departments issues the Africa version of the World Economic Outlook, after all the data is collected that’s where we have what we call the Overall World Economic Outlook which the world bank itself issues.
“When you come to the classification, if you say you are a middle-income like Ghana maybe 10% of people are businessmen, household, chief executives and things they probably own about 75% of Ghana’s GDP and the majority of people are, you know we did a strategic division currently Ghana’s per capita income is about $2,000 and so if a minimum is $1,000 or $1,035 then Ghana is nowhere near being a low-income country and we are also not an upper-income country because we are nowhere near $4,000,” he said.
Meanwhile, the Ministry of Finance has clarified that the classification of Ghana as a low-income developing country in the International Monetary Fund’s (IMF) April 2021 Fiscal Monitoring document is not a downgrade.
According to a press statement issued by the Ministry, it said, “We wish to state that Ghana continues to be categorised as a ‘Lower-Middle Income Economy’ based on the widely-recognised classification of the World Bank and the UN.”
This follows some social media posts and news reports that said the IMF in its April 2021 Fiscal Monitor forecast report had downgraded Ghana’s economic classification from a low-middle-income country to a low-income developing country.
But the Ministry says “Ghana’s classification in the recent IMF Fiscal Monitor did not change” hence cannot be declared as a downgrade.
However, the world’s Middle-Income Countries (MICs) are a diverse group by size, population, and income level. They are defined as lower-middle-income economies are those with a Gross National Income(GNI) per capita between $1,036 and $4,045, and upper-middle-income economies - are those with a GNI per capita between $4,046 and $12,535 (2021).
Middle-income countries are home to 75% of the world’s population and 62% of the world’s poor.
Listen to the full interview below
