By Omoh Gabriel

Executive Directors of the In-ternational Monetary Fund have stressed the need for Ghana to address its fiscal vulnerabilities and further advance the structural reform agenda.

The directors also welcomed Ghana’s strong growth and favourable medium-term outlook underpinned by high commodity export prices, the start of oil production, and strong non-oil activity. It said that Ghana’s international reserves have increased, the currency remains stable, and inflation has declined to single digits.

It however said that for it to maintain the growth momentum and to meet the country’s development objectives, there is the need to address fiscal vulnerabilities and further advance the structural reform agenda.

A report by the IMF said “Directors regretted that fiscal consolidation goals were not achieved in 2010, reflecting in part the delays in fiscal reforms. Going forward, they emphasised the importance of stronger fiscal management and called for rigorous implementation of the authorities’ plan to reduce the cash deficit and avoid further domestic arrears.

They highlighted that this would require improved expenditure control, a prudent roll out of the new pay structure, and determined efforts to boost tax collections in relation to GDP. “Directors urged the authorities to take additional measures to strengthen the budget, should the need arise.

The report further said the “Directors stressed the importance of maintaining the momentum of structural fiscal reforms, notably for tax administration, payroll management, and expenditure control. While welcoming the improvement in Ghana’s debt sustainability outlook, they underscored the need for continued improvements in debt management and prudent borrowing strategies.

The Directors welcomed the recent approval of an oil revenue management bill, as well as the authorities’ intention to ensure that oil-related incomes, expenditures and savings be transparently and comprehensively recorded for dissemination, analysis and audit purposes.”

They observed that cost-recovery pricing of energy products is crucial for sound fiscal management.