If Ghana gets an International Monetary Fund (IMF) program, the World Bank is likely to advance nearly $1 billion to the country.
This is in addition to the $3 billion that the IMF is slated to provide to Ghana as part of a Fund program.
Finance Minister Ken Ofori-Atta revealed this to George Wiafe on PM Express Business Edition on April 20, 2023, in Washington DC, USA, during the IMF/World Bank spring meetings.
Mr. Ofori-Atta added that the World Bank’s planned financial assistance will be spread out over the next three years as part of a program.
He further stated that the cash will be applied to programs and activities specified in the 2023 Budget.
“Other donor partners are expected to join in providing the necessary financial assistance to support Ghana’s recovery under the IMF program,” he said.
The status of Ghana’s IMF program proposal
Mr. Ofori-Atta stated that Ghana has met all of the pre-conditions, and hence the government would receive an IMF program.
Kristalina Georgieva, the IMF’s Managing Director, has previously declared that the Fund will rapidly approve the deal if all of the essential conditions are met.
“What the IMF is hoping for before going to its board for approval of Ghana’s program is assurance from the Paris Club of Bilateral Creditors that that group is committed to extending the necessary financing support.”
Commitment to fiscal discipline
Mr. Ofori-Atta has promised to strictly impose fiscal discipline as part of an IMF program.
Given the obstacles that Ghana’s economy has faced, he committed to act differently in the future.
“This is what we need to do to help the IMF program succeed and avoid further derailment,” he pleaded.
Mr. Ofori-Atta went on to say that the administration will do everything possible to guarantee that “we improve revenue mobilization to march government expenditure.”
“We will also make certain that every expenditure is recorded in the GIFMIS,” he added.
He also stated that the administration will implement new policy measures to reduce waste in the public sector.
“We will ensure that unnecessary spending is dealt with aggressively in the future,” he continued.
Proposed tax measures and business concerns
Mr. Ofori-Atta has defended recent tax policies implemented by the Ghana Revenue Authority in order to increase revenue mobilization.
He maintained that many enterprises do not pay taxes and understate their earnings.
“A recent Ghana Revenue Authority audit and exercise revealed that many businesses are not paying taxes.” Some are even under-declaring profits in order to lower the taxes owed to the state, which we believe must be stopped.”
“We must recognize that the economy is in trouble and take the necessary steps to help stabilize the situation,” Ofori-Atta continued.
He did, however, confess that due to the delay in passing the law, the government may not make the expected income objective from taxes.
Post-Debt Exchange Program Stability Fund for the Financial Sector.
He stated that the $1.5 billion Ghana Financial Stability Fund would be operating beginning in July 2023 to assist financial institutions affected by the Domestic Debt Exchange Program.
The World Bank and the African Development Bank are both slated to grant Ghana around $250 million by June of this year.
Source: myjoyonline.com