Economy of Ghana: Gov’t to miss budget deficit target if … – Terkper – Business

The governing New Patriotic Party (NPP) will miss its budget deficit for 2017.

This is a prediction by a former Finance Minister in the erstwhile Mahama administration, Seth Terker.

His argument was contained in an article where he explains that the governing NPP must not cut ties with the IMF even though the bailout programme ends in 2018.

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In his article, he argues that the government’s efforts to ensure tax compliance and cut down some expenditure may yield little impact on the economic prospects.

But Terkper argued that there is no evidence that only tax compliance and expenditure cuts can fill the fiscal space.

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He added that this will the government to borrow more in the absence of HIPC space.

Terkper encouraged that Ghana must sign onto the Policy Support Instrument because of the five more arguments even as the IMF deal ends in December 2018.

The NDC ended its administration in 2016 with a budget deficit of 8.7 percent. However, the NPP government is confident of reducing the figure to 6.5 percent by the end of this year.

This is still lower than the target set by the IMF.

Terkper also encouraged the NPP to stop cutting back on substantive tax measures such as the Energy Sector Levy Act (ESLA) and the 17.5 per cent VAT in addition to other Public Financial Management measures such as GIFMIS.

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