General

Government begins talks with IMF today

Officials of the International Monetary Fund (IMF) will commence negotiations with the government today on a possible programme to support Ghana’s homegrown economic policies.

The IMF team – led by the Mission Chief for Ghana, Carlo Sdralevich – will have in-person meetings with the Finance Ministry, the Economic Management and the Presidency from July 6 to July 13.

Government signaled its intention to seek support from the Fund last week, after several months of saying it will not seek a bailout despite crippling economic conditions.

The IMF lending to Ghana will be for balance of payments support (to shore up the international reserves).

Government is committed to ensuring the smooth operationalisation of all taxes including the e-levy to ensure that in addition to the IMF’s resources, government can continue to support its developmental goals on its own, while ensuring that the tax-to-GDP ratio increases to the peer range of 16%-18%.

An IMF-supported programme is likely to encourage the government to investigate the factors hindering the success of the e-levy by providing technical assistance if needed and come out with strategies to improve it.

Reports say government is considering a raft of new taxes in the medium term.

It is expected that details of the bailout programme and its conditionalities will be made public after several engagements.

Government’s decision to seek economic refuge from the Fund has been received with mixed reactions as some, especially members of the National Democratic Congress (NDC), argue it has been long overdue.

Some have also expressed concerns over what the move could mean for public sector jobs and social programmes with organised labour kicking against the decision.

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