We'll Maintain Fiscal Discipline ... After Existing IMF Programme - VEEP

By Yaw Kyei

Vice President Dr Mahamudu Bawumia has assured the business and investor community of the government's commitment to work towards maintaining fiscal discipline, even after exiting the International Monetary Fund (IMF) Programme.

"Government is putting in place measures to ensure irreversibility of the macro-economic gains we have achieved so far. I understand that there are concerns in the investor community about fiscal discipline post the conclusion of Ghana's IMF programme.

"We are committed to maintaining fiscal discipline for our own sake. As a result, as we have stated before coming into government, we are going to implement structural measures to tackle some of the long-term structural issues," he said.

Addressing the Ghana-United States (US) Business Forum in Accra yesterday, Dr Bawumia announced a number of measures the government was putting in place to consolidate the macro-economic gains made so far.

They include a new law (a fiscal responsibility law) to cap the budget deficit not to exceed five per cent for a fiscal year from 2019 along with limits for the debt to Gross Domestic Product (GDP) ratio, and establish an independent Fiscal Council to oversee the implementation of fiscal policy.

The measures also include operationalisation of a Treasury Single Account (TSA) to consolidate all government funds at the Bank of Ghana, de-emphasize the rapid resort to the use of single/sole-sourced contracts and adopt competitive tender process to eliminate wastages and also prevent corruption, among others.

"As we lay a solid macro-economic foundation for businesses and the private sector to grow, we have not lost sight of key strategic elements that hold the greatest potential to anchor the investments we desire," he said.

Vice President Bawumia enumerated some of the macro-economic gains made so far and noted that the government had managed to secure significant improvements in the trends of key macroeconomic indicators such as inflation, exchange rates, and real GDP growth rates.

"We have reduced the rate of inflation from 15.4 per cent to a single digit. We have more than doubled the real GDP growth while reducing the annual rate of debt accumulation. We have brought down the budget deficit from 9.3 per cent to six per cent and attained a primary balance surplus. Our balance of trade accounts is also in a surplus. We have improved our gross international reserves, and reduced our debt to GDP ratio below the 70 per cent threshold.

"We have been able to do all these while at the same time reducing and abolishing about 15 different nuisance taxes to ease businesses, households and individuals. All these and others reflect the renewed confidence in the Ghanaian economy. Last year, we had positive rating reviews from all three Rating Agencies: Fitch, S&P, and Moody's," he said.

He said the 'Ghana Beyond Aid' policy required the mobilisation and leveraging of domestic savings and revenues, as well as the country's vast natural resources in a more effective and efficient manner to ensure development and create wealth for the people; expand financial inclusion with credit services and saving systems for all, and financing through local capital markets in local currencies.

"The vision to build a Ghana Beyond Aid is not mere rhetoric. Nor should it be seen as one of the many passing political platitudes in the past. President Nana Addo Dankwa Akufo-Addo and his government are clear in their thinking about where they want to take this country and the pathways of getting there."

"Our fundamental objective, among other things, has been to restore macroeconomic stability to levels that can stimulate growth, improve the overall business environment, and strike the right balance between fiscal consolidation and growth. This fine balance requires making credible policy choices that will create the fiscal space to implement growth enhancing initiatives," he said.

The US Secretary of Commerce, Mr Wilbur Ross commended the government's measures to fight corruption and indicated that American businessmen and women were interested in investing in an environment free from corruption.

He said the companies were not seeking to exploit the country's resources but to seek partnerships and investors that would inure to the benefit of both countries.

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