The International Monetary Fund (IMF) has acknowledged that Ghana's journey to economic stability will be challenging but remains optimistic about the country's resilience amid current difficulties. The IMF has urged Ghanaians to manage their expectations of the government and continue to be patient as the country implements its US$3 billion loan-support program.
In response to Ghana's economic challenges post-COVID-19 pandemic, the government introduced various taxes and levies, including a COVID-19 Health Recovery levy, Electronic Transactions Levy (E-levy), and Sanitation and Pollution levy. However, announcements of additional taxes, such as a 15 per cent Value Added Tax (VAT) on residential electricity consumption and an emissions levy, led to public outcry, prompting the government to suspend them pending discussions with the IMF.
During her visit to Ghana, Ms. Kristalina Georgieva, Managing Director of the IMF, emphasized the importance of embracing “painful reforms” by the government. Drawing on her country's experience, she highlighted the severity of economic challenges faced by Bulgaria in the 1990s, underscoring the need for decisive measures to address macroeconomic imbalances.
Ms Georgieva emphasized the IMF's commitment to working with the Ghanaian government to implement policies aimed at reducing debt levels and strengthening macroeconomic fundamentals. She recognized the impact of additional costs on low-income households and emphasized the importance of fiscal prudence and revenue generation.
While acknowledging Ghana's economic challenges, Ms Georgieva emphasized the importance of maintaining focus on implementing the loan-support program to restore macroeconomic stability and debt sustainability. She urged the government to prioritize reducing expenditure, increasing revenue generation, and investing in education and infrastructure to foster inclusive growth.
Ghana is currently implementing a three-year US$3 billion Extended Credit Facility (ECF) program with the IMF under the country's Post-COVID-19 Programme for Economic Growth (PC-PEG). The program aims to restore macroeconomic stability, build resilience, and lay the foundation for stronger and more inclusive growth. As of now, Ghana has received US$1.2 billion in two tranches from the IMF, with a second review of the program's implementation scheduled for April 2024.