[ 2014-11-21 ]

IMF welcomes debt sustainability policies in 2015 budget
The International Monetary Fund, (IMF), has
welcomed policies initiated in the 2015 budget by
the Ghanaian government to reduce the country’s
debts and budget deficit.

The IMF has also hailed government’s moves to
clean up the payroll and reduce the public sector
wage bill in the budget presented to Parliament,
Wednesday, by Finance Minister Seth Terkper.

This was contained in a statement released by the
Bretton Wood institution after the third round of
discussions with Ghana for a possible programme.

The Fund, led by Mr. Joël Toujas-Bernaté said
the 2015 Budget included “some important
measures to increase revenues, to eliminate
distortive and inefficient energy subsidies, and
to contain growth in Ghana’s comparatively high
public wage bill.

“At the same time, the budget allows for
maintaining public investment above 5 percent of
GDP as well as increasing social protection
spending targeted at the most vulnerable”.

The mission also welcomed the “government’s
aim to implement structural reforms to underpin a
sustained consolidation towards a fiscal deficit
objective of 3.5 percent of GDP by 2017.”

“Reforms will include strengthening public
finance management, reducing tax exemptions,
enhancing tax administration and reviewing the
earmarking of revenues for statutory funds,” a
statement from the Fund said.

It observed that: “Efforts to clean up the
payroll and enhance its management have been
initiated and should be pursued swiftly. These
efforts, together with the implementation of
appropriate pay and hiring policies, will help
further control the wage bill, which has been a
significant source of fiscal risk”.

The IMF also revealed that the Ghanaian
authorities and the mission made significant
progress towards reaching understanding on
strengthened macroeconomic policies, as well as on
a medium-term fiscal path consistent with ensuring
debt sustainability and reducing the external
current account deficit.

“The IMF team will continue to support the
authorities as they work in the coming weeks in
several areas, including to take concrete steps in
cleaning up the payroll, finalize the remaining
details of their medium-term reforms and to seek
external financing assurances from bilateral
donors and international institutions. Once this
work is completed, a financial arrangement to
support Ghana’s economic program would be agreed
at staff level before being proposed for the IMF
Executive Board's consideration.”

Source - Starrfmonline

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