“Implementation of the program so far remains broadly satisfactory. Most of end-December 2015 performance criteria were met, with the exception of small deviations in the wage bill and net domestic assets of Bank of Ghana (BOG),” Mr Joël Toujas-Bernaté, Leader of the IMF Team, told a press conference at the end of a two-week review visit to the country on Wednesday.


“Looking ahead, given the high level of public debt, fiscal consolidation needs to continue, notwithstanding the headwinds from low commodity prices,” he said.

Mr Toujas-Bernaté said the authorities had also made progress in implementing fiscal structural reforms although at a slower pace than expected in some areas.

He said the authorities had recognised the challenges and had prepared a package of measures to reduce the risk of expenditure overruns, in particular on the wage bill, and kept the 2016 Budget outturn consistent with the programmme objectives with an overall cash deficit now projected at 4.8 per cent of Gross Domestic Product (GDP).

“The required fiscal adjustment is on track with the overall cash deficit improving from 10.6 per cent of GDP in 2014 to 6.7 per cent of GDP in 2015, and the primary balance close to zero from a deficit of 4.4 per cent of GDP in 2014,” he said.

The mission, Mr Toujas-Bernaté said, welcomed the adoption of several new tax laws and progress in strengthening payroll controls and addressing payroll irregularities along with advancing public financial management reform including developing the Treasury Single Account.

However, preparation of a new public finance management law and an amended BOG Act had been delayed.

Within the framework of the Petroleum Revenue Management Act, the authorities would reduce expenditures to offset the shortfall in oil revenues, he said.

Mr Toujas-Bernaté said the relatively large government cash resources available at end-2015 and possible additional donor support in 2016 should allow the government to adapt the budget financing strategy to prevailing market conditions.

“Underpinned by the recently introduced petroleum and electricity levies, a strategy is being developed to address the difficult financial situation of the state owned enterprises (SOEs) in the energy sector. This strategy will be critical to avoid additional fiscal pressures and possible spillovers on the banking system, as well as to sustain the improvement in electricity delivery achieved recently,” he said.

He pledged the commitment of the IMF Team to support the authorities as they finalised work in the coming weeks in a few areas, including the new PFM law, the amended BOG Act and the strategy for addressing the financial situation of state owned entreprises.

This is the third time the IMF review team has expressed satisfaction with the performance of the country on Ghana’s financial and economic programme supported by the IMF’s Extended Credit Facility.

The discussions focused on the implementation of the programme, the medium-term outlook, and policies and structural reforms needed to restore debt sustainability and a return to high growth and job creation while protecting the poor.

Source: GNA


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