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IMF boss, Lagarde, warns Ghana against excess borrowing

The government of Ghana has been warned against excess borrowing from other countries.

IMF boss,Christine Lagarde

The caution was made by the Managing Director of the International Monetary Fund (IMF), Christine Lagarde whilst having her two-day visit in the country to complete the processes for Ghana’s exiting of the programme with the IMF.

The IMF boss revealed that excessive borrowing can derail economic gains achieved by the country.

Madame Lagarde who was speaking at a conference organized by her outfit in Accra said that Ghana would have to improve on its domestic revenue mobilization to fund projects including the Free SHS programme.

She said, “Anybody who says I will do all of it without tax is not telling the real story, it is not popular but it is sensible. I am advocating for the sustainable financial structure that will help education and digital infrastructure so that the country can sustain that growth potential that is there.”

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She added that Ghana needs to have the right mix between domestic revenue mobilizations to sustain developmental projects 

Ghana under the IMF programme

In 2015, the IMF approved a $918 million three-year Extended Credit Facility to help Ghana boost its economy.

During this time, the Public debt had risen to an unsustainable pace.

The amount was expected to be paid in eight equal instalments, with the first tranche of $114.75 million paid immediately after the approval. Ghana is currently waiting for the final disbursement.

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The IMF programme was to help restore debt sustainability and macroeconomic stability while protecting government spending.

Meanwhile, the President and the Vice President Dr Mahamudu Bawumia has assured the nation that government is on track to remain fiscally discipline through the introduction of two new councils and a law.

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