Economist Dr. John Gatsi says he is optimistic government will conclude discussions with the International Monetary Fund (IMF) before close of the first quarter of 2015.
This comes after Fitch Ratings Agency said Ghana and the IMF probably won’t come to an agreement on aid until April next year.
Minister of Finance Seth Terkper has already hinted that government will revise the 2015 budget after an agreement on an IMF-backed program is reached.
Seth Terkper during the presentation of the 2015 Budget on November 19, said on the floor of Parliament that “we will return to this august House with an update.”
On November 20 , Ghana concluded preliminary discussions on a three-year IMF program.
An IMF mission, led by Mr. Joël Toujas-Bernaté, visited Accra from November 6 to 20, 2014, to discuss the authorities’ economic and financial program and its possible financial support by the IMF.
Economist Dr.John Gatsi speaking to Citi Business News said ,”the government of Ghana has said it is not be possible at least at the end of January to have a deal signed…it has been already explained that getting to the end of the first quarter , it is possible for the Finance Minister to review the budget”.
Dr.John Gatsi also called on the central bank to clarify reports by Fitch Ratings Agency that it has been forced to print money to finance governments budget deficit.
In a research piece on Ghana, the ratings agency said the Bank Of Ghana has been forced to print 1 billion dollars , that is 90% of the budget in the first five months .
According to Dr. Gatsi, the laws of the country only allows the Central Bank to fund 10% of the government’s budget deficit.
This is not the first time the rating agency has accused the central bank of funding the country’s budget deficit.
In June 2014, Fitch raised concerns about the Bank of Ghana printing money to help finance the government’s budget deficit.
According to the rating agency, the bank has done so to a level which is twice the bank’s full year limit.
“The Bank of Ghana’s (BOG) role in funding Ghana’s budget deficit in the first quarter illustrates the financing challenges the government faces given surging yields and a deteriorating maturity profile,” Fitch Ratings said.
It added “Printing money to finance the deficit will aggravate already high inflation (14.7% in April 2014) and contribute to further cedi weakness. The cedi has fallen 21% since the start of the year.”
But the bank of Ghana denied the reports.
By: Rabiu Alhassan/citifmonline.com/Ghana
