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Roundup: Ghana gov't seeks review of 918 mln USD IMF deal

Xinhua, January 21, 2017 Adjust font size:

The Ghanaian government will seek a review of the country's 918 million U.S. dollars Extended Credit Facility (ECF) deal with the International Monetary Fund (IMF), a minister-designate said on Friday.

The government would have negotiations with the IMF and lay its proposals on the table, Yaw Osafo-Maafo told parliament's Appointment Committee, citing two main reasons.

"There is the need for fiscal space for the government to be able to deliver on its manifesto promises to the people, which must be factored into the terms of the agreement with the Fund, while, on the other hand on account for targets set in the fund program which have been missed; we also need to renegotiate and review the agreement," the minister-designate told the committee.

Osafo-Maafo, who was the first nominee of President Nana Akufo-Addo to go through vetting for approval, noted that the zero percent central bank financing of the annual budget was unnecessary and must therefore be reviewed.

He hinted that an advance IMF team would be in the country early February for these negotiations in time for the government to be able to factor some of the changes into the 2017 budget expected in March.

The government would review taxes to empower the private sector to expand their businesses and create jobs, he also hinted.

"Some taxes which we consider as nuisance taxes will be abolished while corporate tax will be reduced from 25 percent to 20 percent. And withholding tax, for instance, takes people's capital so any tax that is seen as a hindrance to business will be looked at," he said.

Government of Ghana entered into the ECF program with the IMF in March 2015 after a fiscal slippage of 11.8 percent in 2012 threw the economy which had grown more than 14.5 percent in 2011 into difficulties.

The three-year ECF, which ends in March 2018, restored some policy credibility to the government, enabling the release of development assistance from some of Ghana's development partners over the past two years.

"The economy is fundamentally strong and the sources of revenue inflow are reliable. With a population of between 25 million and 27 million, it is also manageable, but the challenge has been the management," he said.

Contrary to the campaign mantra of neither borrowing for development nor dealing with the IMF, Osafo-Maafo said the government would borrow but in a better way and also need the IMF, going into the future.

On the role of his designation as senior minister, the nominee explained he would be in charge of coordinating the economic sector ministries to ensure policy consistency and maximum results. Endit