Government and Development partners rose from their consultations on Monday, agreeing that the country must focus on retaining budget deficit to contain inflation and provide the basis for a strong private sector despite the strong progress in recent years.
The budget deficit is forecast to reach eight per cent of gross domestic product in 2010, slightly up from a projection of 7.5 per cent while inflation as at the end of August stood at 9.44 per cent.
The Bank of Ghana has said monetary policy would continue to be guided by the objective of price stability as it aims at keeping inflation within the single digit.
"Currently, underlying trends in headline inflation indicate that inflation expectations are firmly anchored downwards, at least for the rest of this year", Mr. Kwesi Amissah-Arthur, Governor, Bank of Ghana, told the session earlier.
The meeting agreed that oil will increase Government's revenue and that these funds needed to be channelled into key areas such as investment in infrastructure and not tied up in arrears and increase in borrowing that cannot be sustained.
However, to maximize the benefits from oil will require a strong legislative framework and effective implementation as well as a careful management of public expectations.
On the role of different sources of finance, the meeting decided that the scale and role of each of these sources should be carefully defined in the context of the costing of the Ghana Shared Growth and Development Agenda.
The Ghanaian Government made a strong case for continuing aid and the partners settled that budget support, which is the Government's preferred channel of delivery of Official Development Assistance(OFD), be improved to meet the requirements.
The meeting agreed that there should be a more inclusive dialogue to move towards new comprehensive mechanisms that would better coordinate the flow of funds from all sources to ensure they provide the maximum benefit to Ghana.
The partners also decided on the implementation of a new approach to public service reform, emphasizing capacity development, which could both improve the delivery of public services and control costs.
The meeting asked government to finalise the GSGDA, costing and results framework, and to prepare an implementation plan to deliver the above agreements within the next two weeks.