IMF Mission Chief cautions Ghana on electoral fiscal slippage risks amid robust performance
Stephane Roudet, the IMF Mission Chief to Ghana, addressed concerns over potential fiscal slippages in Ghana ahead of the 2024 elections during a press briefing on the sidelines of the IMF/World Bank April Spring Meetings.
Acknowledging the historical trend of fiscal challenges during electoral cycles, Mr Roudet stated, “If you look at past electoral cycles, there have been fiscal slippages in the run-up to these elections.”
Despite this, he pointed to Ghana’s robust current performance under the IMF programme, particularly in revenue collection and budget adherence.
“But I think we should look at the performance to date under the programme. And what we are seeing is a generally strong performance, including on the fiscal front meaning that the government is meeting its objectives in terms of revenue collection, it is meeting its objective in terms of keeping spending within the budget limits. And so this is good news,” he noted.
Mr Roudet highlighted the government’s unwavering commitment to fiscal discipline, noting, “Their intention is not to revert to the economic pressures seen in 2022, including currency pressures and high inflation. They are committed to keeping the fiscal programme on track.”
Looking forward, Mr Roudet confirmed the IMF’s continued oversight through quantitative objectives, with a third review slated for the fall.
“There will be a third review in the fall with a mission that will again assess the performance of Ghana and then look at the economic prospects going forward. So this is a process that is going to continue going forward,” he concluded.
Election 2024: We will adhere to IMF-ECF programme – BoG Governor
Meanwhile, the Governor of the Bank of Ghana, Dr Ernest Addison, has expressed a strong commitment to the implementation of the IMF programme this year despite the elections.
“We must continue with steadfast programme implementation of policies, continue with the fiscal rectitude, continue with the tight monetary policy stance, and pursue the necessary structural reforms to underpin the sustainability of the progress we are making.
“In Ghana’s recent history, we have not been able to successfully implement an IMF-supported programme in an election year without derailment. The Government and the Central Bank are committed to changing that narrative. We recognize the importance of continued macroeconomic stability and an early return to the capital markets, and we will remain committed to ensure that programme implementation stays firm,” he remarked.
Ghana is known to usually overspend during electioneering years resulting in major fiscal slippages.
This is even after the country has made significant strides in fiscal consolidation and revenue enhancement in the years prior to the election year.
