Germany has cast doubt at government’s ability to maintain a reduced budget deficit in the long term.
According to the Deputy Head of German’s Mission to Ghana, even though government has shown commitment in reducing the country’s budget deficit, sustaining the rate in the long term will require strict compliance with rolled out plans.
Figures released by the Ministry of Finance showed that Ghana’s budget deficit at the end of September 2015 was 3.1 percent which figure Deputy Finance Minister Mona Quartey says is expected to end the year at 7.8 percent.
But the Deputy Head of German’s Mission to Ghana, Bernhard Abels who has been speaking to Citi Business News on the issue said,
“The announcement of the reduction of the budget deficit to 7.8 percent is a huge improvement over 2014; however we know that this number will not be sustainable in the long term so government still has a long term to do.”
He added, “I think the plan by the ministry of finance has already laid out a lot of plans on how to do it but the main question is to work to execute the existing plan.”
Mona Quartey however believes government’s target will be achieved with the implementation of the new financial management law.
“We now have a new public financial management law that will come out soon. This law seeks to bring together many other laws. This is all part of the good governing of our financial or fiscal space so we are making sure that as we go through these economic challenges … as we try to narrow our budget deficit,”
“Even though the 2016 budget lays more emphasis on revenue than expenditure, we have done a lot of work on expenditure even as we’ve increased revenue without compromising the quality of service that the public service must give. This year our budget deficit as at September was 3.1, we will end the year at 7.8 budget deficit,” Mrs. Mona Quartey stated.
Meanwhile Bernhard Abels is advising that government stays with its commitment with the International Monetary Fund (IMF)
“I think the government has shown commitment and the numbers have improved in the last two or three years. The European Union ruling says that a cash deficit between 3 to 4 percent at the end of the year is sustainable and I think that if the government stays with its plans and commitment with the IMF it will be able to do this.”
By: Pius Amihere Eduku
