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Fiscal Policy We’ll come out of IMF programme with a robust economy - Mahama

Ghana in 2015 reached a three-year $918 million financial package with the IMF to support a reform programme aimed at faster growth and job creation while protecting social spending.

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President John Mahama play

President John Mahama

President John Mahama has said Ghana will come out of its aid package with the International Monetary Fund  (IMF) with a robust economy.

Ghana in 2015 reached a three-year $918 million financial package with the IMF to support a reform programme aimed at faster growth and job creation while protecting social spending.

The reform programme also aimed at tighter fiscal discipline, stronger public finances and lower inflation.

On Sunday at a campaign launch in Cape Coast in the Central Region, President Mahama said: “Our programme with the IMF ends [next] year. “We will come out of it with a more robust economy.”

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Explaining why Ghana signed onto the IMF deal, he said: “in 2013, we were running a budget deficit of close to 12 percent, rising inflation, a depreciation of the currency and spiral interest rate.”

He noted that these challenges created a negative outlook for both domestic and international investors.

He added: “Our major strategy was in the short term was to reduce the budget deficit and to tame inflation.

“To achieve this, we needed to implement  some difficult decisions including controlling expenditure, removing unsustainable subsidies and increasing revenues."

“As [a] leader, I have had to take bold decision and I have had to muster [the] courage to take these decisions in the national interest.”

President Mahama said the alternative of a collapsing economy would have been ‘too dire to imagine.’

“…Today, the positive outlook post-2016 unanimously predicted by all the major financial institution is based on the institutional and fiscal reform that the NDC [National Democratic Congress] government has carried out over the last three years,” he said.

According to president Mahama, since the beginning of 2016, the government has refrained from borrowing from the central bank to finance capital projects.

What this means is that we have financed all our expenditures this year from the government own revenue, he said. “This is unprecedented in the history of Ghana.”

He continued: “We’ll come out of the IMF programme with inflation at single digit, a deficit of GDP [Gross Domestic Product] below 3 percent and debt to GDP [ratio] below 60 percent, a stable currency and significantly lower interest rate.”

In a speech at the 10 Quadrennial Delegates Congress of the TUC in Kumasi on Thursday, the president said he “deliberately” entered into the aid package with the IMF because “election year over expenditure has become the bane of our economic stability.”

He said expenditure targets are still on track despite figures showing the government has overspent than projected in the first half year.

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