Accra: Finance Minister Dr. Cassiel Ato Forson has defended the government's decision to maintain tight public spending, insisting that the administration is bound by commitments made under Ghana's International Monetary Fund (IMF) programme. His remarks come in response to criticism from the Minority, which has accused the government of failing to spend despite improved economic indicators.
According to Ghana Web, Dr. Forson, during an interview on JoyNews, emphasized that the current administration inherited obligations under the IMF programme negotiated by the previous New Patriotic Party (NPP) government, which secured a US$3 billion bailout. The agreement committed Ghana to achieving a primary fiscal surplus of 1.5 percent of Gross Domestic Product (GDP), leaving the current government with little room to increase expenditure.
Dr. Forson highlighted that the NPP entered into the IMF programme, borrowing US$3 billion and committing to a fiscal surplus target. He pointed out that by the time the NPP left office, they had already spent a significant portion of the loan. The finance minister stressed that the IMF's agreements are with the government and not with any political party, arguing that his administration had a responsibility to honour the country's commitments.
He elaborated on the importance of adhering to the programme's fiscal targets to ensure Ghana successfully completes the IMF-supported programme. Dr. Forson asserted that government spending alone cannot resolve every economic challenge, particularly inflation driven by food prices and global fuel shocks. He noted that fiscal policy must work alongside monetary policy to address inflationary pressures, mentioning the amendment of the Bank of Ghana Act to make inflation targeting a shared responsibility between the Ministry of Finance and the central bank.
Despite recent concerns over inflation, Dr. Forson expressed confidence that the government's disciplined fiscal approach would keep price growth within the target range, aiming for an inflation rate of 8 plus or minus 2 percent by the end of the year. He maintained that fiscal prudence remains necessary to safeguard Ghana's economic recovery.