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Downsized government size will relieve public purse – IMF to Ghana.

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Downsized government size will relieve public purse – IMF to Ghana. 46

 

 

The International Monetary Fund (IMF) has applauded Ghana for cutting down the number of ministers after public outcry over the country’s huge government size.

The fund has described the downsizing action as the “right example” and amounted to the government “tightening its belt” under a fiscal consolidation exercise that was expected to span this year and 2025.

The Resident Representative of the IMF in Ghana, Dr Albert Touna Mama, said the cut in the number of ministries and other non-productive expenditures will help check fiscal deficit and slow down debt accumulation.

“As I mentioned, consolidation is necessary to put public finances back in shape and contain the current strong increase in debt. In addition, the government is setting the right example by tightening its belt with the reduction in the number of ministries and possibly a pay rise freeze for its Executive arm,” he told Daily Graphic.

Commenting on the fiscal consolidation programme contained in the 2021 Budget, Dr Mama said he shared in the concerns of the Bank of Ghana (BoG) that the integrity of the budget was largely tied to revenue estimates.

“The composition of fiscal consolidation, whether spending-based or tax-based, is important. There is merit in reviewing all public expenditure, with the view to rationalising them and improving their efficiency. In fact, one desirable outcome at the end of this programme will be to reduce spending rigidities in the budget.

One caveat is that spending on education, health and social protection ought to be safeguarded. This is also a way to avoid imposing an undue burden on the less well-off in society during fiscal consolidation,” he stated.

President Nana Addo Dankwa Akufo-Addo has reduced the number of ministries in his second administration from 36 to 29.

Consequently, the number of ministers, deputy ministers and regional ministers to be appointed will not exceed 85.

In addition to the reduction in ministries, President Akufo-Addo also signalled a reduction in Executive appointments when he announced that regional ministers would not have deputies.

That has brought down the number of Executive representatives at the regional level from 26 under the President’s first term to 16 under the term that began on January 7, this year.