IMF urges Ghana to exercise fiscal restraint and establish financial benchmarks

The International Monetary Fund (IMF) has cautioned Ghana regarding its fiscal challenges, emphasizing the need for restraint in spending ahead of the upcoming 2024 general election.

In an interview on Citi TV’s The Point of View with Bernard Avle, Kristalina Georgieva, the Managing Director of the IMF, emphasized the need for Ghana to implement financial benchmarks to navigate its economic landscape effectively. She recommended the establishment of key benchmarks, including a 55% net present value to GDP ratio and a debt service cap of 18% as a proportion of government revenues.

“We need to have anchors and then stick to them. For Ghana, what we are proposing is 55% net present value debt to GDP. And 18% max for the share of debt service into government revenues. Anchor your situation in a clear stable manner.

Georgieva further advocated for the establishment of a fiscal council within Ghana, composed of independent individuals, whose duty will be to scrutinize and oppose unnecessary expenditures when deemed necessary.

She suggested that the fiscal council would play a crucial role in ensuring financial stability and preventing fluctuations in spending.

“We also recommend Ghana takes a very serious look at how the fiscal situation in the future can be stable and so we don’t go up and down again. We are recommending fiscal council, reputable people, independent people able to say objectively this line of spending yes and this one no.”