WP/06/24 Implications of Quasi-Fiscal Activities in Ghana Mali Chivakul and Robert C. York © 2006 International Monetary Fund WP/06/24 IMF Working Paper African Department Implications of Quasi-Fiscal Activities in Ghana Prepared by Mali Chivakul and Robert C. York1 Authorized for distribution by Samuel Itam January 2006 Abstract This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper assesses the scope and coverage of quasi-fiscal activities (QFAs) in Ghana. We find that while QFAs have been reduced recently, they remain significant. The extensive nature of these activities has several macroeconomic and structural policy implications. An extended measure of public sector operations, including QFAs, presents a clearerpicture of Ghana’s fiscal stance and fiscal adjustment from one for the central government alone; QFAs have led to serious distortions in energy and water consumption; and they have distorted the investment decisions of both public enterprises and the private sector. JEL Classification Numbers: E62, H11, H54, H60 Keywords: Ghana; quasi-fiscal activities Author(s) E-Mail Address:
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[email protected] 1 We would like to thank, without implication, Samuel Itam, Saul Lizondo, Noriaki Kinoshita, Zaijin Zhan, James Daniel, Pierre Laporte, and Christian Josz for helpful comments and suggestions on an earlier draft of this paper.