The International Monetary Fund (IMF) has indicated that the 2020 budget presents a fine opportunity for government to demonstrate it is fully committed to fiscal discipline in an election year.
Catherine Pattillo, Assistant Director at the fiscal department of the Fund, “we are going into an election year and so meeting the budget deficit target in 2020 will really send a strong signal to all including investors of government’s commitment to fiscal discipline.”
She disclosed this to JoyBusiness after launching the IMF Fiscal Monitor report on the sidelines of Annual IMF/World Bank meetings in Washington DC on Wednesday.
Ken Ofori-Atta, Finance Minister is expected to present the last budget of the Akufo-Addo administration by November 15,
Why is the IMF worried?
Governments over the years have ended an election year by spending far more than what it has budgeted for that financial year.
This development has led to high budget deficit resulting in some serious crush fiscal consolidation program the next year.
But according to the IMF, even though it is somewhat satisfied with measures implemented so far by government it still believes that a lot more needs to be done to help consolidate gains made so far.
IMF wants all expenditure to be captured in government’s budget
The Fund is also pushing for all government’s expenditure to be captured in the budget.
According to Ms Pattillo, this would help better track government’s finances and the impact of rising expenditure on the total debt stock.
She noted that “all off-budget expenditure going forward should also be discouraged by government. This is because the general principle is that all public sector obligations must be officially captured for everyone to better track government’s finances.”
Data from the Bank of Ghana as of July 2019 ending shows that the country’s total debt stock stood at ¢205 billion.