‘Check Rising Debts, Revenue Shortfall’

Managing Director of the International Monetary Fund (IMF), Christine Lagarde, says rising debts and revenue shortfall pose a major threat to the country’s economy.

Ms Lagarde advised government to pay serious attention to the afore-stated areas.

Government failed to meet its revenue target for the first seven months of this year, as it recorded about GH¢3 billion short of the target.
Expenditure, on the other hand, has reached worrying levels.

The IMF’s Extended Credit Facility (ECF) provides financial assistance to countries with protracted balance of payment problems.

According to IMF boss, the country’s ECF programme with the IMF would end in April 2019 and not December 2018 as been announced.

“The programme is to end in April, yes. I will tell you in April (whether Ghana was on track). We are all on track to delivering till April. Everything I’ve heard from the authorities is that everybody is committed to delivering till the end of the programme as was concluded which has always been April.”

“I know that the team is working today as we speak with the Finance Minister’s team, and of course they have to review numbers and to run they…but we are all working in good cooperation, and I’m very hopeful that we will have the board meeting in late January or early February,” Ms Lagarde told Joy Fm in an interview.

Asked whether the ECF was prudent, she said, “I am in no doubt that the programme was worth it when I look at the numbers, but the good question is could Ghana had done the same things without our support?”

She added, “I think what the investors would be looking at is whether Ghana, under the current management, can actually stay the course and deliver not only political stability for which it is well-known but also fiscal responsibility and not going to binge borrowing and binge spending simply because the elections are around the corner.”

In 2015, the Ghana government entered into an agreement with the IMF for economic assistance.

The IMF provided funding of $918 million to be disbursed to Ghana under eight tranches.

Some key issues of the credit facility included the freezing of public sector employment, reducing the budget deficit and zero financing of the budget deficit by the BoG.