Ghana turned to the IMF as the economy approached bankruptcy in 1983. The IMF-sponsored stabilization program, known as the ERP (Economic Recovery Program), was pursued vigorously through its several phases, and borrowing from the IMF came to a temporary end in 1992. Many changes took place in the ten years of the program. The currency was devalued repeatedly; foreign exchange was auctioned. The cocoa sector was revamped, starting with higher producer prices, and privatized. Ghana's civil service was one of Africa's largest, therefore the number of civil service employees was reduced; and the state attempted to unburden itself of its parastatals. A systematic program removed government subsidies, and tax collection procedures were strengthened.
From 1995 to 1997, another IMF-backed structural adjustment program continued privatization, but public sector wage increases and defense spending countered austerity measures. Ghana's budgets have habitually been in deficit, financed mainly through the domestic banking system, with consequent rapid increases in the money supply and the rate of inflation. The third phase of the IMF program began in 1998, focusing on financial transparency and macroeconomic stability. In 2001, Ghana sought debt relief under the Heavily Indebted Poor Country (HIPC) program and reached decision point in early 2002.
The US Central Intelligence Agency (CIA) estimates that in 2001 Ghana's central government took in revenues of approximately $1.6 billion and had expenditures of $2 billion. Overall, the government registered a deficit of approximately $372 million. External debt totaled $5.96 billion.
The following table shows an itemized breakdown of government revenues and expenditures. The percentages were calculated from data reported by the International Monetary Fund. The dollar amounts (millions) are based on the CIA estimates provided above.
|REVENUE AND GRANTS||100.0%||1,603|
|General public services||10.3%||204|
|Public order and safety||3.8%||75|
|Housing and community amenities||2.8%||55|
|Economic affairs and services||15.9%||315|