Some financial analysts are worried Ghana failed to meet nearly all the targets set by the International Monetary Fund(IMF) aimed at enhancing fiscal discipline and economic development.
As part of the IMF Extended Credit Facility of 918 million dollars, the previous government was expected to cut expenditure while redirecting the country’s resources into the real sectors of the economic to help reduce the debt stock.
But President Nana Akufo-Addo disclosed that government missed nearly all the targets, with a budget deficit of 9 percent instead of 5.3 while the debt stock ballooned to 122 billion cedis, representing 74 percent of GDP.
Government also missed the revenue target while expenditure went above the target.
Speaking to Citi Business News on the issue, Economist Dr. Lord Mensah stated that missing the targets is a setback and bad signal to the international investor community.
“I am surprised because I really asked myself that what is the essence of going to IMF if we are not able to get to the near target. Not to say the target itself, because if you look at the essence of the programme it is more or less putting us in a fiscal discipline regime,” he lamented.
Expressing disappointment in the country not achieving the targets, Dr. Mensah observed that the figures confirm the previous government’s inability to stick to fiscal regulations.
“The Programme is aimed at ensuring that we sustain ourselves and that is expected to build us into our economic growth. But that didn’t happen and when we were going to the IMF I indicated that I am happy because the agreement is falling into an election year which is going to reduce our election cycle overspending. All this did not happen,” he said.
“The investor outside Ghana, and also in house will not see the country management in terms of finance very well to have confidence, at least for now”
He stated that the Nana Akufo-Addo government will face some difficult challenges in the beginning.
“In the end all these projections we were making as far as all these agreements was so we could manage our economy. I must say that some of the targets were difficult to achieve but we should have done better,” he said.
Making some recommendations, Dr. Mensah stated that it is prudent for government to restructure the country’s debt to regain hope in the private sector.
He added that government must quickly pursue fiscal policies that will bring back confidence in the private sector to lead economic growth.
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By: Lawrence Segbefia/citibusinessnews.com/Ghana
