IMF cautions Ghana to be frugal in spending ahead of 2020 elections

This will help ensure that the macroeconomic gains made in the aftermath of the IMF bailout program is not undone.

A statement by the IMF after its routine assessment of the country’s economy said the government must do their possible best to prepare a budget that regulates the government’s quest to borrow and its spending.

“While 2020 budget preparations are ongoing, the mission underlined the need to adopt an appropriately tight budget to limit financing needs, contain debt build-up, and support the external position.”

“This will likely require both spending and revenue measures. The IMF team recommended avoiding spending and financing operations outside the budget to enhance budget credibility and transparency;” the IMF added.

The IMF urged the government to increase its domestic revenue or cut its spending instead of borrowing to execute its planned programme and activities.

“In the medium term, raising domestic revenues remains a priority to create fiscal space and buttress fiscal sustainability. The authorities should also forge ahead with the implementation of the Energy Sector Recovery Plan to limit contingent liabilities in the energy sector,” said Carlo Sdralevich, who led the IMF Mission to Ghana.

The IMF also entreated the Monetary Policy Committee of the Bank of Ghana not to hesitate to increase its policy rate if the inflation rate, currently at 7.6% rises above the government target of 8%.