The new government’s debt and financial sector management strategies set in the 2017 budget, was seemingly validated in early April after the country tapped the bond markets to the tune of USD 2.2 billion with foreign investors snapping up most of the debt. In a further sign of investor confidence, the cedi has made significant gains in recent weeks, which should help dampen inflationary pressures.
The government aims to broaden the tax net and strengthen the fiscal policy framework in order to pare back a budget deficit which ballooned last year, coming in far above the target agreed with the IMF.
Finding between the right mix of fiscal and monetary policies is key to achieving fiscal convergence, which will boost the economy. This can be achieved by pursuing effective debt management strategy to ensure debt sustainability and reduce government borrowing, usually resulting in crowding out of the private sector.
Adopting global standards of risk and treasury management would ensure accountability in the use of state resources, beating down our fiscal deficit.
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