The Majority in Parliament has expressed fears that purported GHc 7 billion unaccounted expenditure by the previous National Democratic Congress (NDC) administration, could compromise the International Monetary Fund’s (IMF) Extended Credit Facility (ECF) with Ghana.
Addressing the press today [Thursday], the Chairman of Parliament’s Finance Committee, Dr. Assibey Yeboah, speaking on behalf of the Majority, warned that if figures were not reconciled with the right data from the previous government, the country could be sanctioned by the IMF.
The Minority explained that, the fund was used for part of the contract database and outstanding commitment, and did not constitute the conventional definition of arrears.
The Minority explained that, the Ghc 7 billion that the Vice President Dr. Bawumia is talking about “is as a result of a major initiative or reform on government contracts and expenditure, which is part of the GIFMIS project that the new administration is expected to continue implementing. The framework is also covered in the new Public Financial Management (PFM) Act, under the Budget Responsibility provisions.”
Dr. Assibey Yeboah, however, surmised that the previous government may not have been forthright with the IMF.
“On the face of the reality that the arrears date back to 2014, then it will suggest that when the previous administration entered into negotiations with the IMF, full disclosure of data was not made available to the fund.”
“Again, on account that arrears for 2015 and 2016 were not fully disclosed, that raises further questions on the integrity of data that we have been churning out over the past eight years.”
Dr. Assibey Yeboah highlighted the implications for the year 2016, noting that, already deficit projected for 2016 is hovering around 8.5 to 9.5 percent of GDP, according to the Bank of Ghana and the Ministry of Finance.
“These new uncovered arrears could put the overall budget deficit at 10 to 11 percent of GDP… For an economy like ours, the current deficit numbers show that in 2016 alone, our expenditures far outweighed our revenues by as much as $4 billion.”
“There is an admission by the minority that the GHc 7 billion expenditure which had been kept out of the purview of the books of government constitutes rare expenditures that have been taken.”
Given the ongoing implementation of the extended credit facility, Dr. Assibey Yeboah is of the view that the IMF stands in a better position to make some of these issues clear.
“As to whether this represents a breach of the ECF programme conditionality, we will know by next week when the mission chief is expected to brief donors on his findings.”
“Under the programme, the government is not allowed to accumulate arrears. This may yet represent another serious breach of the programme and if care is not taken, punitive actions could be taken against Ghana,” he said.