Ghana Needs IMF For Fiscal Discipline; That's An Insult But A Fact - IEA

Senior Economist of the Institute of Economic Affairs (IEA) Dr. John Kwakye has urged policy makers in the country to adopt and enforce rules to strengthen Ghana's fiscal performance. Addressing a gathering at the IEA conference on public financial management, Dr. John Kwakye blamed the country's legislators for Ghana's poor fiscal performance. Speaking on the theme "Improving Fiscal Management in Ghana: The Role of Fiscal Policy Rules", he recounted that the legislative body has become an extension of the executive and has been exercising a "weak oversight" to ensure fiscal discipline in government. Illustrating the challenges in regulating the fiscal policy in the nation, the IEA Senior Economist noted that the "discretionary fiscal policy" adopted by the government has failed the nation. "Ghana has a track record of high fiscal deficits, partly reflecting procyclical fiscal policies in good times and electoral cycles. A review of fiscal performance in Ghana over the past two decades shows that the country has not been able to keep the government budget under control and fiscal consolidation has not been successful" the Institute of Economic Affairs (IEA) report read. He further said weak fiscal management in the country has worked “to undermine Ghana’s economic progress by exacerbating macroeconomic instability, creating a looming debt crisis and crowding out the private sector. "Borrowing to finance the high deficits has led to a mounting public debt, currently running at about GHc88 billion or close to 70% of GDP. The high deficits emanate from revenue and expenditure gaps." Giving a presentation at the IEA conference hall, Dr. Kwakye stressed that "an ambitious fiscal consolidation strategy” will help achieve a fiscal and debt sustainability. Also speaking at the conference, the 2012 Vice Presidential candidate of the Progressive People's Party (PPP), Mrs. Eva Lokko called on the government and the entire nation to discipline themselves in order to enhance the fiscal performance in the country. According to her, Ghana's Parliament deserves to enforce fiscal policy rules and further ensure that the proper fiscal structures are set up to check any misappropriations in the public sector. “When are we going to get up as Ghanaians and get our up together and stop the blame game? The blame game has not gotten us anywhere…What are we doing? It is time for us, yes, to have rules and regulations but before that, there’s the need for rational education in terms of feeling like true citizens of our country and believing that this country matters to us…We have to look at the people.” “…if we still have this attitude towards our country and we want to be partisan in everything that we do, it will never see the light of day. Ghanaians, let’s wake up and do the right thing.” She was also worried over Ghana's reliance on the International Monetary Fund (IMF) for bailouts. To her, it is an "insult" for Ghana to depend on the IMF to instill fiscal discipline in the country. On the contrary, Dr. John Kwakye, IEA Senior Economist, stressed that Ghana needs the IMF for discipline. He however opined that though it is an "insult"; it remains a fact.

Source: Ameyaw Adu Gyamfi/Peacefmonline/Ghana