Prof.  Peter Quartey
Prof. Peter Quartey

Economist wants govt to avoid budget overruns

The Director of the Institute of Statistical, Social and Economic Research (ISSER), Professor Peter Quartey, has cautioned the government against budget overruns in the wake of the release of the first tranche of $600 million by the International Monetary Fund (IMF).


The IMF released the funds after its Executive Board approved Ghana’s programme under which the country is expected to receive a $3 billion Extended Credit Facility (EFC).

While joining calls from other economic and financial analysts for radical reforms that will ensure prudent and judicious use of the $3 billion support from the IMF, Prof. Quartey also stressed the need for strict monitoring and evaluation of the funds in other to keep expenditures in check.

He said with the government determined to set a new record in the country’s electoral history by ‘breaking the eight’, the temptation to spend on unbudgeted projects and programmes loomed, a development which, when allowed, could hurt the economy even further.

Consequently, he stressed the need for the Fiscal Responsibility Council to rise to the occasion by ensuring full compliance with the Act that provided for fiscal responsibility rules to ensure macroeconomic stability and debt sustainability while providing for related matters.

Prof. Quartey said the role of Parliament was also crucial to ensure that the government stayed within the conditions as set out by the Breton Woods institution and avoid a situation where the economy could be dragged into deeper trouble on the altar of political expediency, he told the Graphic Business in an interview that sought his views on how the government could manage its expenditure in the wake of the approval of the IMF programme.

Money drops

The Finance Minister, Ken Ofori-Atta, confirmed last Friday that the first tranche of $600 million of a $3 billion three-year extended credit facility had been received.

“It is expected to be used for budget support and help bring down inflation,” he said on his Twitter page.


The IMF executive board earlier last Wednesday approved Ghana’s $3 billion request and made a $600m payment – the first of a $3bn extended credit facility (ECF) agreement between the government and the multilateral organisation.

But whether this will keep the IMF at bay for the long term will depend on adhering to strict fiscal measures to keep the country‘s debt in check.

This is the 17th arrangement between the IMF and Ghana since 1966 and many are those who expect the government to prudently manage the funds to save the country the embarrassment of having to resort to the IMF again for what they believe is an avoidable support.

Resetting the economy

Prof. Quartey said much as the release of the funds had come in at the right time, this was not the time to celebrate but to work on all the programmes, projects and policies that were implemented wrongly in the past.

He also supported the call by the Governor of the Bank of Ghana (BoG), Dr Ernest Addison, who said during a press conference to announce the approval of the bailout package by the IMF board that that was not the time to celebrate but a time to reset the economy.

Prof. Quartey said the difficult and trying times the economy and Ghanaians for that matter were going through should be a lesson for the right things to be done.

He reiterated calls on the government institutions and all who matter to ensure that the objectives for which the country sought the bailout were achieved.


Large external shocks in recent years have exacerbated Ghana’s fiscal and debt vulnerabilities, resulting in a loss of international market access, increasingly constrained domestic financing, and reliance on the monetary financing of the government.

Decreasing international reserves, currency depreciation, rising inflation and plummeting domestic investor confidence, eventually triggered an acute crisis.

The IMF programme would, therefore, help Ghana to overcome immediate policy and financing challenges, including through its catalytic effect in mobilising external financing from development partners and providing a framework for the successful completion of the ongoing debt restructuring, according to a brief from the Breton Wood institution.

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