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To reduce deficit,privatize some state institutions, cut wage bill - IMF proposes

The International Monetary Fund (IMF) is proposing a huge cut in the public sector wage bill and privatization, to help manage government’s rising expenditure.

Last year ended with Government spending about 12 percent more than what it generated as revenue.

The situation is likely to be worse this year as figures already show that as of August 2013, the budget deficit stands at  about 7 percent. This has resulted in the downgrade of Ghana's credit worthiness.

Speaking to JOYBUSINESS on the sidelines of the Financial integration conference in Accra, Deputy Managing Director of the Fund,  Naoyuki Shinohara says "as a short-term measure, government needs to work on wage moderation"

While, he recommends to the country's Finance Minister Seth Terkper that "for more medium-term measure, they have to work on prudent hiring as well as privation and streamlining of so-called subvented agencies".

Falling short of naming any public institution, he said "there are agencies that should be privatized and some agencies that should stay in the public sector".

Meanwhile the fund says The  International  Monetary Fund says it would extend another financial support to Ghana if the request is made by the  government of Ghana.

The board of the Fund in 2009 approved 581 million dollar  facility to  Ghana which was disbursed over a three year period.

The funds where to assist the state to reduce poverty and support other programs by government.

Some have argued that with the country going revenue challenges  it be good to go back to the IMF again .

Deputy Managing of the FUND,  Nao-Yuki Shino-Hara  says they would gladly extend  another debt relief package if Ghana turns to them.