Ghana will be financially discipline after IMF exit - Government
Government has given assurances that the economy will remain resilient and robust even after the International Monetary Fund (IMF) programme is over.
Ghana is preparing to exit the program by April 2019.
The IMF programme, which started in 2015 was extended for another year, after the initial agreement ended.
Speaking at the final outdoor event of the Citi Business Festival, named the Economic Outlook, a Deputy Minister of Finance Charles Adu Boahen said government is putting measures in place to sustain fiscal stability after the country exits the programme.
Mr. Adu Boahen assured that government is putting in all the necessary measures to ensure that Ghana does not go off track in sustaining fiscal discipline.
“Some of the programmes that we are enforcing include legislation to have a fiscal cap of the fiscal deficit to promote both budget credibility and fiscal sustainability,” he said.
Highlighting more steps being taken to control budget overruns, Mr. Adu Boahene stated that the Finance Minister will be reminded not to go beyond a certain threshold in relation to the deficit target.
“That means that, going forward, you cannot exceed your deficit target in the budget. There will be strict enforcement of the PFM Act to promote efficient and effective financial management. This will minimize budget rigidities and free fiscal space to fund flagship and priority initiatives,” he stressed.
But Former Finance Minister Seth Terkper, who was part of the panel cautioned against a hasty outright exit of the programme.
“I have expressed this views before, it’s been published. I believe rather than exit completely, we should take advantage of the policy support instrument of the programme which is what Kenya, Rwanda and other African middle income countries have with the IMF and that will afford us a smooth transition,” he stressed.
He cautioned that the signals sent by the current government on its desire to quickly exit the programme when it is over gives an impression that the country wants to go back to previous activities that have constantly taken Ghana back to the fund.
He pointed out that it is important to look at the past interaction with the fund to inform government on how it will proceed going forward.
“Our affiliation with the IMF and the multilaterals span 1985 to 2000s and you can see that that was when our economic relations with the multilaterals including the World Bank, African Development Bank seriously started”
He argued that the period between 2000 and 2010 could be described as rapid expansion in services and in construction, when services overtook Agriculture as the largest share of Ghana’s GDP.
Mr. Terkper stated that the country’s relationship with the IMF and the multilaterals have proved positive with some policies that have propelled economic growth and development.
Meanwhile, the President of the Private Enterprise Federation, Nana Osei Bonsu was of the view that the program has brought some hardship as government was constrained from spending to expand the economy.