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Ghana's economy Economy not improving, MP tells Terkper

Seth Terkper last week said the economy has recovered following the implementation of the fiscal consolidation measures.

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Dr. Mark Assibey Yeboah, MP for New Juaben South, and also a member of Parliament's Finance Committe play

Dr. Mark Assibey Yeboah, MP for New Juaben South, and also a member of Parliament's Finance Committe

(File Photo)

The Member of Parliament for New Juaben South, Dr. Mark Assibey Yaboah has said the "currency has to get stronger" and "jobs have to be created" to show the economy is rebounding, in response to the Finance Minister's claims that the economy is recovering.

Seth Terkper last week said the economy has shown improvement  following the implementation of the fiscal consolidation measures which has seen the budget deficit reduced to 7.3% from 12% in 2013.

He said:"The fiscal consolidation measures have ensured the reduction of  our budget deficit. We had a deficit of nearly 12% in 2013 and that was what we were looking resolve. Now the deficit stands at 7.3%, a clear indication that  fiscal consolidation measures  are being successfu. We are now looking at a target of 4.5% and 5%."

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Addressing a wide range of issues on the economy's recovery last Tuesday at a press conference, Terkper said;

On single spine and payroll issues, he said labour agitations have reduced drastically, as well as the burden of the wage bill on the budget.

On debt accumulation, he said the rate at which government is accumulating debt has decreased.

On budget deficit, he said government is targeting  4.5% and 5%.

But Assibey Yeboah, who is also a member of Parliament's Finance Committee, disputed Tekper's claims on grounds that "unemployment and inflation is till high," the the Business and Financial Times reported him as saying.

“If the economy is rebounding our currency has to get stronger. Jobs have to be created. The cost of borrowing, interest rates have to come down. The cost of borrowing is still high up. The currency is still weak. So what has improved, which of these economic indicators has improved from a year ago or two years ago?” he said.

The Deputy Managing Director of the International Monetary Fund (IMF), Mr. Min Zhu has said he expects Ghana to cut its budget deficit by 2 percent in other to contain high public wages and reins in spending.

Mr. Zhu also said the IMF is expecting Ghana's economy to grow by 4 to 5 percent, during a recent visit to Ghana.

He said: “We expect to see that the government will cut the budget deficit by 2 percent and with all that we expect to put the economic growth at 4 to 5 percent.”

Ghana last month received $114.6 million dollars from the IMF after a review of its 3-year bailout program aimed at bolstering the economy.

On the withdrawal of the 1% withholding tax by parliament last week, Assibey Yeboah said, “I think the right thing was done. It is a good thing that the 1 percent withholding tax on interest earned has been withdrawn.”

He also urged government to avoid what he calls "frivolous spending," and also "stop borrowing and live within our means."

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