Government has been accused of ignoring advice from external institutions such as the International Monetary Fund in the 2021 Mid-Year Review Budget, released last week.

According to tax consultancy firm, PFM Tax Africa, headed by former Finance Minister, Seth Tekper, the government overlooked recommendations from the Fund’s Article IV Consultation Document a week to the presentation of the Mid-Year Review Budget.

In a statement, it expressed shock that the Mid-Year Review did not prioritise the comments from IMF document since the remarks covered every line item in the budget and the economy – even without a formal programme from the Fund.

“Government of Ghana has recently consulted or collaborated actively with major external agencies and given its approval or consent for divergences that are not in the Mid-Year Review. The major one is the IMF Article IV Consultations or review conducted in March 2021and associated press release in July 2021”

It added “the IMF comments affect every line item in the budget and of the economy – even without a formal IMF programme, the Article IV consultations commentaries are the most elaborate that the board reviews and approves, with the consent of government.”

Again, PFM Tax Africa expressed surprise about the unchanged 2021 Annual Mid-Year Review Budget and estimates against many odds in a Covid-19 pandemic era.  

“Ghana has been adamant in maintaining the same levels of estimates for revenues, expenditures and deficits or fiscal balances – and ignored the informed and technical views of experts in the external agencies, not just IMF. Indeed, the government ignores the views of domestic experts and reaction to its policies from many citizens.”

PFM Tax Africa was also unhappy the government had used the ongoing Covid-19 pandemic to borrow, withdraw money from the stabilization fund to support the budget and suspend critical fiscal rule that it enacted.

“The government of Ghana has used the ongoing turbulence to borrow (ie IMF COVID/RCF Loan), drawdown on budget buffers ie stabilization fund and suspend critical fiscal rules that it enacted with great promise”

It further said that government continues to peg the overall budget deficit for last year and this year at 13.8% and 10.8% respectively when the external institutions with which it collaborates have recorded higher figures, at above 15% and 14%.

It reiterated that it looks curious for government to explicitly exclude bailout costs from arrears but use Bank of Ghana positions or deposits to minimize the extent of domestic financing.

In conclusion, it urged Ghanaians to ignore attacks on those who use IMF reports to seek attention over government’s report on the economy, saying, the government consults, reviews or even approve those reports and those of the multilaterals and bilateral agencies including the World Bank.

“Ghana could see a repetition of the now famous case of “parallel “reporting to Parliament, given that the government ignored similar IMF observations in the 2019 Article IV and we paid a heavy price for exercising a sovereign choice at the time.”