Ghana’s efforts to obtain balance of payment support from the International Monetary Fund (IMF) have been stalled due to the country’s failure to meet some of the conditions precedent to approval. The implications of the delay could be severe for Ghana’s struggling economy, which has been badly affected by the COVID-19 pandemic.
President Akufo-Addo and Finance Minister Ken Ofori-Atta had pledged that Ghana would secure IMF support by the end of March. However, Governor of the Bank of Ghana, Dr. Ernest Addison, revealed at a news conference that Ghana’s inability to pass some tax laws before the end of April could stall Ghana’s consideration for support by the IMF Executive Board.
The official creditors had discussed the previous week and were looking at a date in April to give the financial assurances. The previous action, which includes signing the Memorandum of Understanding (MoU) and passing the new revenue measures by Parliament, is important to the fund’s decision to fix a date for the executive board meeting.
Dr. Addison appealed to the Parliament to prioritize the passage of the three new taxes, namely the Communication Service Tax (Amendment) Bill, the Energy Sector Levies (Amendment) Bill, and the Income Tax (Amendment) Bill. These taxes will increase government revenue to meet the requirement of IMF for the balance of payment support.
Effective collaboration between the government and Parliament is needed to achieve the country’s economic goals as failure to meet the conditions could impact Ghana’s credit ratings, making it harder for the country to approach international financial markets.
The IMF’s support would provide the financial assistance needed to stabilize Ghana’s economy, boost investor confidence, and back its COVID-19 recovery efforts.
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