{"id":234149,"date":"2016-07-26T06:10:28","date_gmt":"2016-07-26T06:10:28","guid":{"rendered":"http:\/\/citifmonline.com\/?p=234149"},"modified":"2016-07-26T06:10:28","modified_gmt":"2016-07-26T06:10:28","slug":"ghana-likely-to-re-engage-imf-deal-over-bog-deficit-financing","status":"publish","type":"post","link":"https:\/\/citifmonline.com\/2016\/07\/ghana-likely-to-re-engage-imf-deal-over-bog-deficit-financing\/","title":{"rendered":"Ghana likely to re-engage IMF deal over BoG deficit financing"},"content":{"rendered":"

A Deputy Minister of Finance, Mona Quartey has told Citi Business News<\/strong> that Ghana may have to renegotiate its deal with the IMF should Parliament approve a 5% financing of government\u2019s budget deficit.<\/p>\n

[contextly_sidebar id=”nVzAfYoYtfCK1tHOkQrP8dfzxwyMKLFB”]According to her, government is willing to accept the decision of the legislature on financing government\u2019s budget deficit from the central bank.<\/p>\n

\u201cIt will mean renegotiations and discussions with the IMF because the preferred option is the zero percent from the central bank. But remember also that the zero percent is even so different from the West African Monetary zone convergence criterion which is 10%,\u201d she explained.<\/p>\n

Mrs Mona Quartey\u2019s comments come at a time that the Institute for Fiscal Studies (IFS), is proposing 5% financing of government\u2019s budget deficit instead of zero financing proposed by the International Monetary Fund (IMF).<\/p>\n

Parliament is also currently considering a proposal in the Bank of Ghana Amendment Act to cap the BoG\u2019s funding of the country\u2019s budget deficit at 5 percent of total revenue for the previous year from the current 10 percent.<\/p>\n

Madam Quartey who spoke to Citi Business News<\/strong> on the sidelines of the Finance Minister\u2019s presentation of this year\u2019s mid-year budget review in Parliament on Monday, was confident of a favourable outcome of the discussions.<\/p>\n

\u201cThe debate has not taken place so we are expecting it to take place and hopefully, as a nation we will come out with what should be good for Ghana…If it has to be zero, it will be so. But if Parliament decides on another figure, we will equally work with that,\u201d she further stated.<\/p>\n

One of the conditions under the IMF\u2019s Extended Credit Facility (ECF) Program with Ghana is for the central bank to embark on a zero-financing of government\u2019s budget deficit.<\/p>\n

Currently, the BoG Act requires that the central bank\u2019s monetary financing must not exceed 10 percent of the previous year\u2019s total revenues.<\/p>\n

But, consistently, the BoG has not been able to keep to this limit.<\/p>\n

Some industry watchers have argued that the country\u2019s economic assistance program with the IMF could be curtailed if Parliament upholds the 5 percent financing decision.<\/p>\n

But Member of the Finance Committee of Parliament, Benjamin Kpodo has since dismissed such concerns.<\/p>\n

He rather believes that any issue with the IMF Board to possibly delay the release of funds will have to do with the country’s inability to pass the Public Finance Management Act.<\/p>\n

The Deputy Finance Minister was however of the view that a complete adherence to the IMF\u2019s suggestions could largely be practicable if it is limited to the period of the program with Ghana.<\/p>\n

\u201cIf there is the need for the current practice to be curtailed, one would have even thought that perhaps the negotiations should be about curtailing for during the period of the IMF program. But the IMF is asking us to put it into law and I think that is where other members of the House are having a problem. So we have to justify to them why it should be zero percent in law,\u201d Mona Quartey stressed.<\/p>\n

Meanwhile Finance Minister, Seth Terkper on Monday said that the government\u2019s cash deficit of 2.5 percent for the first five months of 2016, which was up from a target of 2.2 percent, was for the first time not funded by the Bank of Ghana.<\/p>\n

–<\/p>\n

By: Norvan Acquah-Hayford\/citibusinessnews.com\/Ghana<\/p>\n","protected":false},"excerpt":{"rendered":"

A Deputy Minister of Finance, Mona Quartey has told Citi Business News that Ghana may have to renegotiate its deal with the IMF should Parliament approve a 5% financing of government\u2019s budget deficit. [contextly_sidebar id=”nVzAfYoYtfCK1tHOkQrP8dfzxwyMKLFB”]According to her, government is willing to accept the decision of the legislature on financing government\u2019s budget deficit from the central […]<\/p>\n","protected":false},"author":14,"featured_media":234154,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[121,32,11],"tags":[],"yoast_head":"\nGhana likely to re-engage IMF deal over BoG deficit financing - Citi 97.3 FM - Relevant Radio. 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