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Discussion Starter · #1 ·
IMF warns Ghana on unsustainable debt build-up

REUTERS


The International Monetary Fund urged Ghana on Friday to improve its fiscal performance to avoid an unsustainable build up of public debt through increased foreign borrowing.

In a statement at the end of economic consultations in the capital Accra, IMF mission chief to Ghana, Peter Allum said initial estimates for 2011 and the medium term showed "substantially larger budget deficits and public borrowing than envisaged under the (IMF) program.

The IMF approved a $602.6 million loan program for the West African country in July 2009 to ease financial strains caused by the global economic slowdown.

Allum said widening in Ghana's budget deficit reflected a costly public sector pay regime and the rise in external borrowing to finance infrastructure projects.

Ghana, which is due to join the club of commercial oil supplies by the end of this year, sealed nearly $13 billion in loans from two Chinese banks earlier this month to finance oil and gas infrastructure and agricultural development.

"Discussions focused on the impact that higher deficits and higher borrowing would have on Ghana's rising public debt stock, and on the importance of tailoring spending plans to projected revenues, which oil incomes will increase only modestly in the coming years," Allum said.

He said talks were continuing on options for reducing projected deficits by limiting spending growth and strengthening domestic revenue.

Government data is expected to show a "substantial" upward revision in the size of Ghana's economy and per capita incomes, he added.

"These data will be important to provide a more reliable assessment of recent economic performance, and better gauge Ghana's fiscal and debt management situation and challenges," Allum said.

He said Ghana's financial performance in its power sector had improved since mid-2010 increases in electricity tariffs and by savings in power supply costs due to gas deliveries via pipeline from Nigeria.

"While power tariffs are now at or close to cost-recovery levels, the proposed quarterly review of power tariffs will be important to avoid the emergence of new subsidy costs," he noted.
 

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Discussion Starter · #3 ·
And you think Borrowing from the Chinese is any better? Frankly i don't think this is the right thing to do now borrowing money from Chinese Banks. What Ghana should do is is try to lure in foreign investors and embrace the spirit of competitiveness, Ghanaians have a funny way of chasing away foreign investors one they get too successful, weird.
 

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And you think Borrowing from the Chinese is any better? Frankly i don't think this is the right thing to do now borrowing money from Chinese Banks. What Ghana should do is is try to lure in foreign investors and embrace the spirit of competitiveness, Ghanaians have a funny way of chasing away foreign investors one they get too successful, weird.
Well China is a foreign investor. I don't think it's good either but I'm just saying I don't set much stock by the IMF.
 

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Discussion Starter · #5 ·
China is more exploitative than the IMF mark my words besides i dont think borrowing close to %60 of your GDP a wise move, Ghana's current oil reserve is just approaching the one Billion mark. One stride at a time.
 

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Mutu ya Chuma.
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Chinese banks, Western banks. shame shyt different smells.

But i have heard about Ghana's uncompetitiveness in business . But they are organized well and have less corruption.

But eitherway. screw IMF. these fuckers never, never gave better advise.

Ghana need to ignore them like Malawi did.
 

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Mutu ya Chuma.
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China is more exploitative than the IMF mark my words besides i dont think borrowing close to %60 of your GDP a wise move, Ghana's current oil reserve is just approaching the one Billion mark. One stride at a time.
Your must be sick of some serious illness in saying IMF is less exploitative.

Your saying as if the world has better views of super poison called IMF.:nuts:
 

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Discussion Starter · #10 ·
Chinese banks, Western banks. shame shyt different smells.

But i have heard about Ghana's uncompetitiveness in business . But they are organized well and have less corruption.

But eitherway. screw IMF. these fuckers never, never gave better advise.

Ghana need to ignore them like Malawi did.
Then why is Atta Mills Government frustrating Nigerian investors because they are unable to compete and instead of learning from them, they chose to allow inferiority complex and sentiment influence their judgement.What foreign investors could be better than fellow Ecowas country members investing in each other? The type that comes with The type that comes with Western exploitation or Eastern retrogression?Ghananians will pay a heavy price in the not-too-distant future. Dem find small oil, next thing be say: "Erhm, minister of interior, please drive out this bloody Nigerians, they are too succsessful in our country ...and erhm, minister for investment, please borrow 13 Billion from China let us show the world we have arrived
 

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Why cant ECOWAS of the African union work like the EU where a member state loans to a member state I think borrowing from say Kenya would be better than China. Or the AU sets up a investment fund that each of the members contribute to and if a state needs the capital the AU can devise terms and conditions that would be more realistic than the IMF and World Bank's own....

Or maybe I'm dreaming...
 

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Discussion Starter · #13 ·
Poisonous Cobra? If African leaders had properly utilized funds borrowed from the IMF and not embezzle things would be different.
 

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China is more exploitative than the IMF mark my words besides i dont think borrowing close to %60 of your GDP a wise move, Ghana's current oil reserve is just approaching the one Billion mark. One stride at a time.
True,personally I dont trust Chinese intentions in Africa!We should be very carefull.
 

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Poisonous Cobra? If African leaders had properly utilized funds borrowed from the IMF and not embezzle things would be different.
Thank you.Finally someone who understands the reality on the ground.the IMF or the West is not the problem.
 

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The fact that developing countries go back to the IMF for borrowing needs is a telling fact in and of itself. When the global financial crisis was at its zenith a lot of developing countries could not borrow money and ended up going back to them. The fact is outside of the major EU, North America and Asian giants the rest of the countries do not have enough leverage to go it alone so public finances have to be dealt with in a manner that satisfies bodies like the IMF because at some point they will remain the only lender in the game in times of crisis. Western or Chinese bankers are all interested in getting their money back and they are not prone to lending where there is no viable commercial reason to do so. The more important issue is not the borrowing but what the money being borrowed is used for.
 

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Mutu ya Chuma.
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Poisonous Cobra? If African leaders had properly utilized funds borrowed from the IMF and not embezzle things would be different.
I have already condamned African leaders.

Lets agree on one thing. Poison house IMF comes with things such as "AID".

Chinese come with their cheap words "Business" not AID.

which one would you rather be dealing with?

IMF has been in Africa for 50 years. results?

Chinese has been doing business for 10 years. results?

We can both hate one side. But non can deny that Sino-African business has been more beneficial that Poison house(IMF)'s 50 years of so called AID.

Eitherway. Chinese or IMF all are there to make money and they will get their every cent spent or borrowed.
 

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Nobody forces African leaders to sign such loans.Ignorance is not a defence.The IMF is a bank,their aim to make a profit.
 

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It's better adopt tighter cuts in spendings the painful way like in EU is doing than resorting to external loans, IMF money can help if used wisely but their recipes for growth never worked really. And it's better stay away from chinese they want to own every country in their hands throwing money around in indebted economies and their ultra-cheap loans can go skyhigh overnight like it happened with IMF in the past.
 
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