Initiate strategies to address economic vulnerabilities —IMF tells government

The Managing Director (MD) of the International Monetary Fund (IMF), Christine Lagarde has called on government to initiate strategies to address the economic vulnerabilities facing the country.

Although, she lauded the government for its sterling economic performance in managing the economy for the past two years, she said the growing public debt, high budget deficit, fiscal risk and instability of the financial sector could derail the macroeconomic gains the country had achieved over the two years.

Ms Lagarde made the call in her  keynote address as part of   her two-day visit to Ghana in Accra on Tuesday, which was attended by chief executive officers, captains of industry, members of the diplomatic corps, academic, private sector, students and a cross section of the public.

As part of her two-day visit to Ghana, the IMF Managing Director paid a working visit to the Purim African Youth Development Platform (PAYDP) at Agbogbloshie in Accra, where she donated $15,000 to the non governmental organisation to support the education of the girls, who are head porters, being catered for by the NGO.

Ms Lagarde said the efforts made by the government to reduce inflation and interests and growth rate of 7.5 per cent were no mean achievement.

However, the IMF MD cautioned the government of excessive borrowing to fund its social programmes such as the Free Senior High School, warning that the unbridled borrowing could create debt-stress problem for the country.

“You cannot spend more than you can raise and you need to raise more revenue to finance education,” she said, warning that “borrowing is at a huge cost and interest rate”.

To this end, Ms Lagarde entreated the government to focus on domestic revenue mobilisation as it pursued its agenda of Ghana beyond Aid, to finance the country’s developmental projects.

Broadening the tax net, improving efficiency in the tax collection, blocking tax leakages  were some of the ways she suggested government could pursue to raise more domestic revenue and  pledged that the IMF was ready to provide technical assistance in that direction.

Meanwhile, during her visit to the girls PAYDP at Agbogbloshie, Ms Lagarde advised the girls to take advantage of the opportunities being offered them to improve their lives.

She entreated the girls not to be botched down by their current predicament but work hard to become responsible persons in future, stating in spite of her current position, she once worked in the market.

Ms Lagarde said her first paid job was working in the market and the girls could also climb high the academic ladder if they worked hard.

The Executive Director of PAYDP, Mrs Aku Xornam Kevi expressed gratitude to the IMF MD for the donation and said it would be used for the construction of a training centre for girls.

She said PAYDP established in 2007 was supporting about 5000 girls and appealed to corporate organisations to help construct a shelter for the girls.

By Kingsley Asare

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