Ghana lawmakers breach terms of IMF deal
Ghana's
parliament on Tuesday overwhelmingly rejected a core condition of a
$918 million International Monetary Fund (IMF) aid deal on Tuesday,
breaching the terms of a three-year programme meant to fix an economy
dogged by high public debt.
The
lawmakers passed the Bank of Ghana (BoG) Amendment Bill to allow
central bank financing of the government's budget deficit up to a
ceiling of 5 percent of the previous year's total revenue, instead of
the zero financing demanded by the IMF.
Until now the bank was authorised to finance the deficit at up to 10 percent of revenue.
Implementation
of the zero financing requirement is one of the targets the government
was expected to meet in order for the Fund to conclude Ghana's third
programme review and disburse the next tranche of aid.
However,
Deputy Finance Minister Cassiel Ato Forson told Reuters that, despite
the law, the government will not finance its deficit with central bank
funds.
"We
have demonstrated enough that the government is committed to
expenditure control and we will remain on course, irrespective of
today's decision by parliament," he also said.
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