The Finance Ministry has assured investors that it will not abandon the economic gains it has made even if the International Monetary Fund (IMF) deal comes to a close at the end of this year.
The country will continue to pursue the fiscal discipline and the specific targets the stimulus was meant to achieve in other to prevent irreversibility of the economic gains. This will also give certainty to the investor community in making investment decisions.
These assurances were given by Ken Ofori-Atta, the Finance Minister in a speech delivered on his behalf by Charles Adu-Boahen, a deputy Minister for Finance at an economic forum organised by Citi FM, an Accra-based private radio station held today, 28th June, 2018. The forum, themed “The Outlook”, took place at the Cedi Auditorium, Economics Department, University of Ghana, Legon as part of the radio station’s annual ‘Citi Business Festival.’
The Minister said: “So it is important that we take measures to entrench our programmes to give the investor community the assurances that whether there is an International Monetary Fund (IMF) programme or not, we would continue to do what we have to do to ensure that the economy moves forward successfully.”
“It means that we have a totally different interaction now. We are now dealing with more market players who require real time information and we believe that our programmes are entrenched, we are on track and the programmes are not going to derail,” he further assured.
He said some of the specific economic policies that will be continued even after the deal ends include ensuring that the fiscal deficit will not be more than 5 per cent of Gross Domestic Product (GDP), continue with zero funding by the Bank of Ghana, strict adherence to the Public Financial Management Act (PFMA) to promote effective public financial management and minimise fiscal rigidities posed by high compensation to public sector workers.
Other measures are deepening digitisation of revenue collection, formalise the economy by the introduction of the Tax Identification Number and the National Identification System, enforce public procurement Act to promote value for money in public procurement, amongst others.
Commenting on the IMF deal, Professor Peter Quartey, the Dean of the Economics Department of the University of Ghana, Legon said the country had to resort to the IMF because we had lost credibility in the management of the economy. He said to a large extent, Ghana has managed to restore credibility as the fiscal position is getting better.
Professor Quartey however said that the IMF deal did not address the issue of unemployment as it brought on the freezing of recruiting new people into certain public sectors and in that regard, the IMF deal did not achieve much.
Seth Tekper, a Former Minister for Finance who was also a speaker at the economic forum, traced the country’s engagement with the IMF from 1985 till now and he revealed that Ghana has had between 16-18 programmes with the fund within that period. Tekper said that not all borrowing is bad and he cited examples of the Akosombo Dam, the Tema Port and others which were built through borrowing and these infrastructures paid for themselves.
The former Finance Minister said Ghana is now a middle income country and that must be factored into all government economic policy programmes. He explained that no country could progress without borrowing but what we need to do as a country is smart borrowing and he advised that Ghana needs to increase its domestic revenue to meet provision of goods and services.
Other speakers at the event included Dr Kobina Otoo of the Trades Union Congress (TUC) and Nana Osei-Bonsu of the Private Enterprises Federation (PEF).
The well-attended event had lecturers, students, the university community, the general public and media as part of the audience.
By: Anthony Sedzro, GB& F Magazine