Fiscal consolidation: 'Government is now between a rock and a hard place' - Dr Kwakye

Government is now between a rock and a hard place, these were the words of the Director of Research at the Institute of Economic Affairs (IEA), Dr John Kwakye, as Ghana seeks fiscal consolidation from the International Monetary Fund (IMF).

According to him, if government sticks with the IMF programme, many expenditure pledges will be unfulfilled and if it abandons the programme, the country's economic crisis would be exacerbated.

His comment comes after government promised to be financially disciplined in the upcoming general elections.

In a post on X, the IEA boss said, “Government is now between a rock and a hard place. If it sticks to the IMF program, it risks unfulfilling many of its expenditure pledges. If it abandons the program, it risks exacerbating the country’s economic crisis. Both may come with electoral costs.”

Ghana’s official creditors met on Monday, January 8, 2024, to discuss restructuring some US$5.4 billion in loans to the country.

The meeting was crucial to Ghana securing its next tranche of funding from the International Monetary Fund (IMF).

Ghana is expected to receive some $1.15 billion in funding from the International Monetary Fund and the World Bank by the end of February.

This comes as bilateral creditors are nearing an agreement on the country’s debt restructuring terms.

SA/NOQ

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