Economic policy think tank, Institute for Fiscal Studies (IFS), has called on the government to expedite its promised review of its flagship programs to curb excessive spending and stabilize the macroeconomic environment.
As a critical component of the $3 billion bailout agreement with the International Monetary Fund (IMF), the IFS noted that the government’s commitment to this review has slowed, with no updates provided in the 2024 mid-year budget.
Programs such as the “One Village, One Dam,” “One District, One Warehouse,” and the Infrastructure for Poverty Eradication Project (IPEP) have already undergone review and streamlining.
Currently, the government is progressing with its Agenda 111 initiative, aimed at improving healthcare infrastructure over a five-year period, funded through the Ghana Infrastructure Investment Fund (GIIF) and the Annual Budget Funding Amount (ABFA).
At a press conference in Accra on Wednesday, Dr. Said Boakye, a Senior Research Fellow at IFS, emphasized the need for the government to reassess its flagship programs.
He stated: “The government must review all flagship programs, especially those where costs outweigh the benefits.
While some benefits may be long-term, in the short term, the government’s financial constraints should guide the decision to either reform or cancel certain programs.”
Dr. Boakye further underscored that the temporary relief from debt restructuring must be complemented by a stronger fiscal position to ensure sustainable macroeconomic recovery in the near term.
Ghana’s fiscal policy has historically been marked by recurring overspending, with previous budgets relying on overly optimistic projections despite the establishment of a fiscal council.
The fiscal rules implemented in 2019 lack a clear debt target and are undermined by a complex dual operational rule system, vague escape clauses, and weak enforcement mechanisms.
Despite these challenges, the IMF has commended Ghana’s economic reform program for its progress in achieving its objectives. The Fund acknowledges that, following severe economic and financial strains in 2022, the IMF-supported program has provided a credible framework for the government to adjust macroeconomic policies, restore stability, achieve debt sustainability, and lay the groundwork for higher and more inclusive growth.
By Eugene Davis
