The Vice President of the World Bank, Makhtar Diop, says the country’s economy can run into challenges if the government does not stick to its programmes and policies to address the fiscal deficit target set in the 2017 budget.
Briefing the media yesterday after a closed door meeting with President Nana Addo Dankwa Akufo-Addo and members of government’s economic management team, Mr Diop noted that the success of the Ghanaian economy would depend largely on how the government would manage the fiscal deficit.
Based on the revenue and expenditure estimates in the government’s 2017 budget delivered in Parliament last month by the Finance Minister, Ken Ofori -Atta, there will be a finance gap of GH¢13.2 billion, representing a deficit of 6.5 per cent.
According to the Finance Minister, the imbalances would be addressed from both domestic and foreign sources.
The World Bank’s Vice President urged the government to work tightly in order not to exceed the deficit target set in the budget and advised the economic management team to make effort to achieve all revenue targets, while controlling its expenditure.
Mr Diop commended the government’s intention to strengthen the financial laws to ensure fiscal discipline in the public sector and efficient management of public resources.
He said the decision to create a Fiscal Council to monitor fiscal development in all public institutions would, to a large extent, ensure fiscal discipline.
He said although there would be uncertainties in the world’s economy, government could weather any storm if it stuck to its policies and implemented them strictly.
In Africa, Mr Diop said difficulties in one economy could have rippling effects on other economies on the continent and stressed the need for the government to manage the Ghanaian economy well.
On the imbalances in the 2017 budget, he indicated that the World Bank would help the government to address deficits.
“Our support will be on need basis. We will assess the size of the gap in financing and see how we can help,” he said.
On his closed door meeting with the President, Mr Diop was confident that the government had bold plans and initiatives to turn the economy around.
He said President Akufo-Addo’s priority areas were to address the challenges in the energy sector, assist the private sector to lead the growth in the economy, and improve and modernise agriculture to create jobs.
“It was an opportunity to reiterate that the World Bank is a strong partner of Ghana. In the next three years, we will extend close to 1.2 billion to Ghana.”
“There is commitment to ensure and sustain fiscal discipline,” he said and added that the World Bank would assist the government to achieve its policies in the energy, and agricultural sector and bring the country’s macro economic situation under control.
By Yaw Kyei