Audio By Carbonatix
Excerpts of the IMF regional economic outlook for Africa has painted a gloomy picture of how the fiscal performances of the two countries are at their brink.
The report highlights a rising fiscal deficits in Africa with Ghana and Zambia, the most affected.
In its regional economic outlook, the IMF says spending in Ghana and Zambia, has been growing at “unsustainable levels”.
Credit-rating companies have downgraded the debt of both nations in the past four months as they struggle to curb fiscal and current-account deficits.
Ghana’s cedi and Zambia’s kwacha are the worst-performing currencies against the dollar in Africa in the past six months.
In countries, where fiscal policy has weakened, the risk of debt distress has increased, according to the report.
Debt as a proportion of Gross Domestic Product (GDP) in Ghana climbed 8 percentage points between 2012 and 2013.
The reports proposes that “countries with large fiscal deficits or increasing debt levels, for example, Ghana and Zambia, should intensify their efforts to bring their public finances back to a sustainable footing, including by containing expenditure”.
The report lends credence to public criticisms against high standards of living in Ghana.
Some persons in Ghana have bemoaned the economic difficulties currently facing the country.
Speaking to Joy News, Thursday, some of them indicated that they were struggling to cope with multiple increases in taxes, utility fees, and fuel prices.
The National Petroleum Authority (NPA) increased fuel prices in line with the automatic adjustment policy for petroleum products.
That hike triggered increases in transport fares, leading to a general high cost of living.
Already utility tariffs have been increased and it is awaiting implementation.
Some have suggested that would add to the economic burdens of the ordinary person in the country, not to talk about the latest Value Added Tax (VAT) levy on financial services to be introduced in June.
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