IMF warns Ghanaian government of possible fiscal overruns

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The International Monetary Fund (IMF) has advised government to as early as possible cost the 2016 general elections in order to avoid the risk of fiscal overruns.

The country has suffered budget overruns in election years but with an IMF programme covering 2016, a high sense of fiscal discipline is required.

“To avoid the risk of fiscal overruns in connection with next year’s election, it is imperative to identify the full cost related to the elections as early as possible and provision for it in the 2016 budget, while ensuring that the fiscal targets will be achieved,” said Min Zhu, the Deputy Managing Director of the Fund.

He was speaking after the Executive Board completed review of Ghana’s performance under the three-year extended credit facility (ECF).

The Board was satisfied with the performance of Ghana and, subsequently, approved another $116.6 million for the next phase of the programme.
“Implementation of the ECF-supported program by the Ghanaian authorities has been broadly satisfactory, despite an unfavorable economic environment,” Mr Zhu, who chairs the Board, said.

“In particular, the government’s fiscal consolidation efforts are on track and it is encouraging that the government decided to liberalize the prices of fuel products, which bodes well for expenditure control, eliminating the need for fuel subsidies and the incurrence of arrears.”

He said the government must continue its fiscal consolidation efforts by controlling wage bill in particular.

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