ACCRA, Ghana’s longstanding challenges can only be resolved through ambitious and sustained reforms in key policy areas, going beyond the central government to encompass the broader public sector, says an International Monetary Fund (IMF) mission to the country.
The leader of the mission, Annalisa Fedelino, told a media conference here Monday at the end of its two-week visit to Ghana, that more needed to be done to restore macro-economic stability and to anchor confidence in the country.
She said the mission’s discussions here had focused on recent economic and policy developments and the economic outlook for 2017 and the medium term, including prospects for restoring high economic growth and job creation. It also discussed the parameter of the IMF programme for Ghana, consistent with restoring macro-economic stability.
“In our view, the immediate priority is to ensure fiscal discipline by bringing down the budget deficit to a level required to place public debt on a clearly declining path. Continued fiscal consolidation would also facilitate ongoing disinflation and anchor confidence,” she addedd.
The government has committed to achieve a budget deficit of 6.5 per cent of gross domestic product (GDP) as announced in the 2017 Budget through a step-up in revenue collection.
Annalisa warned that the significant unpaid commitments incurred in 2016 and weaknesses in the financial position of State-owned enterprises (SOEs) in the utility sector could undermine fiscal adjustment and add to spending and public debt.
She stressed the need to bring fiscal discipline to SOEs, especially those in the utility sector.
She said economic prospects for 2017 were encouraging as economic growth was expected to pick up, inflation was declining while there were prospects for a significant increase in net international reserves, boosted by recent sizable exchange inflows.
Fedelino said the IMF would continue to support the Ghanaian authorities’ policies aimed at macro-economic stabilisation and enhancing the growth potential of the economy.
Finance Minister Ken Ofori-Atta said the government was taking pragmatic steps to achieve macro-economic targets and policy outcomes outlined in the budget. Both the IMF and the government were working hard to address the challenges of the economy, especially on ensuring debt sustainability anchored in reduction in fiscal deficit.
“I think with the Fund as a partner we will manage that exit in a way in which we won’t compromise growth and private sector development but at the same time never take our eyes off the general issues of macro-economic stability, (and) fiscal and debt sustainability,” he said.
He said the government was optimistic that growth would rebound rather strongly against the general belief that fiscal consolidation would lead to declining growth.
The Minister also said Ghana was committed to ending its programme with the IMF as scheduled in April 2018, adding that there would be no extension. The IMF approved a three-year Extended Credit Facility (ECF) Programme for Ghana in April 2015 under which a total 918 million USD would be given to Ghana as balance of payments support over the period.
Source: NAM NEWS NETWORK