By Kofi Ahovi
The Executive Board of the International Monetary Fund (IMF) has approved US$119 million to support Ghana's development processes.
The approval brings total disbursements of IMF to Ghana to US$218 million under the Extended Credit Facility (ECF) arrangement.
In a statement issued by IMF, Ghana was given the nod after the board completed the first and second reviews of Ghana’s economic performance under the ECF arrangement, originally known as the Poverty Reduction and Growth Facility.
In completing the reviews, the Board granted waivers for the nonobservance of the continuous quantitative performance criterion on the contracting or guaranteeing of nonconcessional external debt and the nonobservance of the September 30, 2009 quantitative performance criterion on the overall budget deficit.
The release quoted the Deputy Managing Director and Acting Chair of the board, Murilo Portugal, as saying “The Ghanaian authorities have achieved progress in 2009 in reducing inflation and strengthening external performance. While the fiscal deficit was significantly reduced in 2009, revenue shortfalls resulted in the accumulation of new domestic payment arrears”.
He further said “Reduction of the budget deficit to 8 percent of GDP in 2010 will require tight controls over spending, including public administration costs, and strengthening revenue mobilization. To safeguard against new domestic payments arrears, the government should stand ready to tighten fiscal policies promptly, if the need arises”.
According to statement, the fiscal space created by Ghana’s move to oil producer status will initially be modest, given the need to further reduce the fiscal deficit to a sustainable level and to repay domestic expenditure arrears. Adding that, it would be important to tailor spending plans to available resources.
“Equally, the leeway for additional nonconcessional external borrowing is limited, and further steps to strengthen debt management capacity are needed. Programs to strengthen public finance management and revenue administration have been launched. Determined implementation will be important for regaining control over the budget and for prudent use of Ghana’s future oil resources. Transparency in managing oil revenues and related spending will be key,”
Portugal stated.
The Executive Board of the International Monetary Fund (IMF) has approved US$119 million to support Ghana's development processes.
The approval brings total disbursements of IMF to Ghana to US$218 million under the Extended Credit Facility (ECF) arrangement.
In a statement issued by IMF, Ghana was given the nod after the board completed the first and second reviews of Ghana’s economic performance under the ECF arrangement, originally known as the Poverty Reduction and Growth Facility.
In completing the reviews, the Board granted waivers for the nonobservance of the continuous quantitative performance criterion on the contracting or guaranteeing of nonconcessional external debt and the nonobservance of the September 30, 2009 quantitative performance criterion on the overall budget deficit.
The release quoted the Deputy Managing Director and Acting Chair of the board, Murilo Portugal, as saying “The Ghanaian authorities have achieved progress in 2009 in reducing inflation and strengthening external performance. While the fiscal deficit was significantly reduced in 2009, revenue shortfalls resulted in the accumulation of new domestic payment arrears”.
He further said “Reduction of the budget deficit to 8 percent of GDP in 2010 will require tight controls over spending, including public administration costs, and strengthening revenue mobilization. To safeguard against new domestic payments arrears, the government should stand ready to tighten fiscal policies promptly, if the need arises”.
According to statement, the fiscal space created by Ghana’s move to oil producer status will initially be modest, given the need to further reduce the fiscal deficit to a sustainable level and to repay domestic expenditure arrears. Adding that, it would be important to tailor spending plans to available resources.
“Equally, the leeway for additional nonconcessional external borrowing is limited, and further steps to strengthen debt management capacity are needed. Programs to strengthen public finance management and revenue administration have been launched. Determined implementation will be important for regaining control over the budget and for prudent use of Ghana’s future oil resources. Transparency in managing oil revenues and related spending will be key,”
Portugal stated.
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