It emerged yesterday (April 12, 2021) on various social media pages that Ghana has been downgraded from a lower-middle-income country to a low-income country.
The claim was shared by many social media handles, notable among them being Isaac Adongo, the member of parliament (MP) of Bolgatanga Central, and Mensah Thompson, the Executive Director of Asepa Ghana.
On Facebook, Isaac Adongo, the MP and who was also a deputy ranking member of Parliament’s Finance Committee, said:
“Ghana became middle income country in 2010 (NDC was managing the economy). Ghana becomes Low [sic] income country in 2020 (NPP with Dr Bawumia managing the economy). Who are better managers of the economy?”
Mensah Thompson, who was reacting to a post by the Acting Communications Director of the President’s office, Eugene Arhin, also noted that: “IMF downgrades Ghana from a middle income country to lower income country here’s what they are celebrating at the jubilee house. Whatever we did to deserve this Government, God we are really sorry, we will repent!!”
A similar claim had been made by Accra-based Joy FM on their Twitter page. Hours later, the said tweet was deleted.
Fact-Check has verified these claims and conclude that they are misleading. Below is the explanation.
Ghana became a lower-middle-income Country in 2011 and still is currently
Contrary to the post by Isaac Adongo, Ghana became a lower-middle-income country in 2011 (not in 2010). This was announced by the World Bank in a news report on July 18, 2011, following the release of their country classification report on July 1 that year.
“The recent production of oil in Ghana has led analysts to revise upwards the country’s gross domestic product (GDP), spurring hopes for greater strides in the fight against poverty. On July 1, the country moved from low-income to lower middle-income status, according to World Bank country classifications,” the World Bank said in the news report.
The World Bank’s latest report, which was released on July 1, 2020, has captured Ghana under lower-middle-income country classification.
Further, in an email response from the Ghana office of the International Monetary Fund (IMF) to Fact-Check Ghana, the IMF confirmed that Ghana is still a lower-middle-income country, and the claim that the Fund has downgraded the country is false.
“The story is misleading and untrue. The generally accepted classification of countries by income level is done by the World Bank. The World Bank assigns the world’s economies to four income groups—low, lower-middle, upper-middle, and high-income countries,” said Osa Ahinakwah, an Economist at the IMF Ghana Office.
He further added that “the latest updated [classification report by the World Bank] was completed on July 1, 2020 (https://datahelpdesk.worldbank.org/knowledgebase/articles/906519-world-bank-country-and-lending-groups) with Ghana still classified as LOWER-MIDDLE INCOME ECONOMIES ($1,036 TO $4,045).
Also, Albert Touna-Mama, the IMF Country Representative in Ghana, while reacting to the Tweet by Joy FM which suggested the Fund had downgraded Ghana, tweeted at Fact-Check Ghana labeling the claim as “Fake news”.
Why is Ghana captured as Low-Income Country in IMF Report?
In one of Isaac Adongo’s posts on Facebook, the MP presented a table from IMF’s recent fiscal monitor report where Ghana is captured under low-income countries classification as proof of the downgrade.
Osa Ahinakwah of the IMF has, however, explained that it is just the way the IMF breaks down countries for analytical purposes in the Fiscal monitor and it is not new.
“For analytical purposes, the IMF Fiscal Monitor breaks down countries into three groupings: 1) Advanced Economies; 2) Emerging Market and Middle-Income Economies; and3) Low-Income Developing Countries. This analytics classification is not new and it does not have an incidence on the countries’ access to IMF or World Bank facilities,” he said.
To verify if the classification of Ghana as a low-income country by the IMF is really not new and also not as a result of bad management of the economy by the current government as Isaac Adongo claimed, Fact-Check Ghanadecided to ascertain from some of the previous IMF Fiscal Monitor Reports.
The team purposively selected IMF Fiscal Monitors released in 2012 and 2015. During both years, Ghana had already been declared a lower-middle-income country and the opposition NDC was managing the economy.
This, therefore, debunks the claim that the IMF has downgraded Ghana and supports the assertion that the classification of Ghana as a Low-Income country is not new.