Ghana’s Minister of Finance, Seth Terkper, will today appear before Parliament to present the 2016 budget and economic policy statement.
Finance ministry officials have hinted the financial statement for next year would focus particularly on the energy sector, considering that government has secured the World Bank’s Partial risk Guarantee (PRG) to support investment in the Sankofa Gas Fields.
Officials say private investors are in the market to raise the necessary funds for the project.
Since it is going to be an election year, President John Mahama has given the assurance his government will not overspend in order to keep the economy on its healing track.
He said usually there is the tendency to overspend during that period but his government remains focused to ensure the IMF conditionality of maintaining fiscal discipline is met.
Meanwhile, the International Monetary Fund (IMF) has given Ghana thumbs up for working within the scope of its bailout plan after its second review.
A team from the International Monetary Fund (IMF), led by Joël Toujas-Bernaté, visited Accra from October 21–November 5, 2015, to conduct discussions on the second review of Ghana’s financial and economic programme supported by the IMF’s Extended Credit Facility (ECF).
The discussions focused on the implementation of the programme, the medium-term outlook and policies needed to restore debt sustainability, macroeconomic stability, and a return to high growth and job creation while protecting the poor.
After its review, the IMF said: “Looking ahead, given the high level of public debt and financing constraints, the planned fiscal adjustment under the program will be strengthened in 2016.
The budget will also face additional spending needs from the (one-off) costs related to next year’s elections and a nominal wage bill increase now projected to be slightly higher than envisaged under the program, while earmarking of revenues for statutory funds continues to reduce budgetary flexibility.
“Recognizing these challenges, the authorities, after discussions with the mission, prepared a package of revenue and spending measures for the 2016 budget to bring the fiscal deficit down to 5.3 percent of GDP next year, instead of 5.8 percent envisaged in the program.
Steps to contain losses in state owned enterprises will also be particularly important to prevent additional fiscal pressures.”