Government warned not to turn to IMF for financial support
Economist and Lecturer at the University of Ghana Business School (UGBS), Prof. Lord Mensah, has warned the government against returning to the International Monetary Fund (IMF) for financial support.
He noted that if the government should go back to the IMF, it might lead to some serious economic repercussions for the country.
“We’ve been to IMF before and I tell you when we go to IMF now, we’re going to expose ourselves and the communication to IMF is that we’re not disciplined enough when it comes to the management of our funds,” he stated.
Adding that, although he believes its the right way to go in building a robust economy, he doubts the country can comply with the stringent measures that will be rolled out by the IMF.
“So when they come in a form of rescue, the peanuts they’re going to give, and the stringent economic measures they’ll put in place, I doubt the country can be able to follow. So we have to be careful how we’re running to IMF and all that,” he warned.
“We were at the World Bank some few years ago and they came with certain conditions and they gave us certain targets, including our budget deficit of 5% to GDP.
“When we were about to round up the IMF programme, we were so quick and happy to come out of IMF, thinking that when we come out of IMF we will be on our own and start rolling out policies that will start creating employment.
Read: GITFiC projects 6.3% increase in Ghana’s GDP in 2022
“Now, we moved out of the IMF, and then we jumped our budget deficit to 11%. So as for the international market, it’s a no-go area,” he said.
He was speaking on the back of the Finance Ministry’s latest press conference on how the government intends to raise revenue through the e-levy.
Commenting on the latest development, he bemoaned the failure of the government to leverage on other state resources as means of raising revenue, instead of resorting to the electronic transaction levy (e-levy).
Meanwhile, Prof Lord Mensah also bemoaned the failure of the state to leverage its varied natural resources to raise adequate revenue for development.
He said it is unfortunate for a resource endowed country like Ghana to be relying on taxes.
“As for taxes we can’t jump out of it. But if you go to the advanced world and other parts of the world where they don’t have many resources and they are tapping into the human resource activities to build their country in the form of taxes, I understand them.
“For Ghana, we have the resources but mismanagement has brought us to this place,” he said.
His comments follow the government’s intention to implement the electronic transaction levy (e-levy) to generate revenue to fund the numerous development projects announced in the 2022 budget.
Government is still pushing for the E-Levy to be implemented despite great resistance from the Minority in Parliament and other stakeholders.
According to government, the Levy is being introduced to “widen the tax net and rope in the informal sector.”
In the latest update on Thursday, January 20, 2022, the Finance Minister said his Ministry’s engagement with many Ghanaians across the different constituencies, revealed that Ghanaians are not against the Levy.
In a media briefing on Wednesday, the Minister said the concern is about accountability. He therefore promised that government will account for the funds appropriately.
