An economist at the University of Ghana Business School, Professor Lord Mensah, says the Finance Minister-designate, Dr Mohammed Amin Adam should have exercised caution before assuring Ghanaians that the economy was rebounding.

At the IMF and World Bank Spring Meetings in Washington on April 21, Dr. Mohammed Amin Adam announced that Ghana's economy was moving towards stability, citing robust economic progress and strong recovery as key factors.

Dr. Adam emphasized the significant improvement in Ghana's economic indicators, noting that the primary deficit, which was 4.3% of GDP at the end of 2022, had decreased substantially.

He highlighted that by the end of 2023, the primary deficit had reduced to just 0.3%, marking a remarkable four-percentage point decrease.

However, according to Professor Mensah, a comprehensive assessment of the economy should consider all indicators, including full-scale external debt service. Therefore, it might be premature to assert that the economy is rebounding without considering these factors.

In an interview on Joy FM’s Midday News on April 22, he said “The economy may be rebounding but then we have to also take into perspective (that) this is an economy that is not in full scale of its external debt service. We have suspended our external debt service and whatever the case may be, external debt service will require dollar so there will be more demand on the dollar which will call for a high price for the dollar and as a result we get the currency reacting to it.

“So effectively I would have waited to get the government fully in its debt service before I can comment on some of these indicators because you know these indicators are related.”

“When you talk about inflation the first true effect of the exchange rate is inflation. Obviously, once you are not servicing your debt and there is no full-scale demand of dollar on the market, we can’t comment that much on the exchange rate and then the inflation that we are recording,” he added.

The Finance Minister-designate expressed optimism about Ghana's ability to secure IMF board approval by June for a much-awaited $360 million release.

According to Professor Mensah, this achievement is feasible because the government has reached a level of understanding with external creditors, making the June timeline realistic.