Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, has called for the creation of a fiscal council in Ghana to protect macroeconomic stability and ensure responsible management of government fiscal policy.
During an interview on Citi TV’s Point of View with Bernard Avle, Georgieva stressed the significance of having an independent and credible fiscal council to advise the government on avoiding excessive spending.
“We do need to have anchors and then stick to that. Yes, the two notes of caution. One, we do need to have anchors and then stick to them. For Ghana, what we are proposing is 55% net present value debt to GDP and 18% max the share of debt service into government revenues. Anchor your situation in a clear, stable manner.
“And two, we recommend that Ghana takes a very serious look at how the fiscal situation in the future can be stable. So we don’t go up and down again. And we are recommending fiscal council, reputable people, independent, able to say objectively this line of spending, yes and this one, no.”
Ghana is now close to signing a Memorandum of Understanding (MoU) with bilateral creditors as part of the restructuring of debts owed to these lenders.
Ghana after defaulting on most of its overseas debt in December 2022 after servicing costs soared, has restructured most of its local debt and is pushing for a deal with holders of about $13 billion in international bonds.
Ghana’s economy has started to recover since the government last year secured a $3 billion loan programme with the IMF, and in January reached a deal to restructure $5.4 billion of loans with its official creditors.