The International Monetary Fund (IMF) has said government’s high expenditure projects is likely to hamstring it’s bid to create a fiscal space as promised Ghanaians.
The Akufo-Addo government is providing free secondary school education for all eligible Ghanaians. It has also among other things promised to construct at least, a factory in every district across the country and also provide one million cedis to every constituency for local development.
But the IMF has expressed misgivings about the high expenditure projects saying the trajectory may have adverse impact of shocks and affect fiscal discipline.
“ The fund is concerned that while on the one hand government has passed the Earmarked Funds Capping and Realignment Act, ostensibly to create fiscal space, on the other, the government has chosen to embark on a series of high expenditure projects, a move which appears to defeat of EFCRA,” the IMF said in a document compiled after a meeting between the IMF mission to Ghana and the Civil Society Platform on the IMF program.
It further added: “The IMF considers it a misplaced priority to be working towards reducing the indebtedness of State Owned Enterprises without first addressing the causal factors responsible for their indebtedness.
“In the view of the IMF, the government should have issued a “Vanilla bond”, not a bond through a Special Purpose Vehicle (SPV).
“IMF does not support massive injection of liquidity into the sector to address debt situation. It believes that a better approach would be to release the liquidity in tranches,”
