Xinhua, Accra :
International credit rating house, Fitch said Saturday that meeting the targets set in the program by the International Monetary Fund (IMF) poses a tough challenge for the government of Ghana.
“Meeting the ambitious fiscal consolidation targets, will be challenging ahead of elections in 2016,” the rating house said in a release.
Ghana and the IMF announced a staff level agreement on Thursday, which is awaiting the approval of the IMF board by early April.
Fitch believed that the three-year program expected to be worth 940 million U.S Dollars in balance of payment support will provide an impetus for donors to re-engage with Ghana, providing much needed foreign currency.
It added that the focus on three areas: “restraining and prioritizing public expenditure, increasing tax collection and strengthening the effectiveness of the central bank’s monetary policy” clearly identified Ghana’s key sovereign credit weaknesses; and successful implementation would improve fiscal discipline, help to restore macroeconomic stability and support the currency. “Demonstrable commitment to implementing the program over its life could therefore be positive for Ghana’s sovereign rating,” Fitch stated.
It however considered the IMF’s budget deficit target of 7.5 percent of Gross Domestic Product (GDP) in 2015 from 9.5 percent in 2014, as ambitious.
International credit rating house, Fitch said Saturday that meeting the targets set in the program by the International Monetary Fund (IMF) poses a tough challenge for the government of Ghana.
“Meeting the ambitious fiscal consolidation targets, will be challenging ahead of elections in 2016,” the rating house said in a release.
Ghana and the IMF announced a staff level agreement on Thursday, which is awaiting the approval of the IMF board by early April.
Fitch believed that the three-year program expected to be worth 940 million U.S Dollars in balance of payment support will provide an impetus for donors to re-engage with Ghana, providing much needed foreign currency.
It added that the focus on three areas: “restraining and prioritizing public expenditure, increasing tax collection and strengthening the effectiveness of the central bank’s monetary policy” clearly identified Ghana’s key sovereign credit weaknesses; and successful implementation would improve fiscal discipline, help to restore macroeconomic stability and support the currency. “Demonstrable commitment to implementing the program over its life could therefore be positive for Ghana’s sovereign rating,” Fitch stated.
It however considered the IMF’s budget deficit target of 7.5 percent of Gross Domestic Product (GDP) in 2015 from 9.5 percent in 2014, as ambitious.
