Published: June 10, 2010
Government must be ready to tighten fiscal policies, says fund.
The International Monetary Fund (IMF) has agreed to lend Ghana US$119mn from an extended credit facility agreed last year.
Ghana has now drawn US$218mn from the facility, which was converted from a funding line agreed under the IMK’s Poverty Reduction and Growth Facility.
“The Ghanaian authorities have achieved progress in 2009 in reducing inflation and strengthening external performance,” said Murilo Portugal, the IMF’s deputy managing director, in a statement. “While the fiscal deficit was significantly reduced in 2009, revenue shortfalls resulted in the accumulation of new domestic payment arrears.
“Reduction of the budget deficit to 8% of GDP in 2010 will require tight controls over spending, including public administration costs, and strengthening revenue mobilization. To safeguard against new domestic payments arrears, the government should stand ready to tighten fiscal policies promptly, if the need arises.”