More Hardship For Ghanaians: Electricity Tariff, VAT, E-Levy Rates To Go Up Under $3 Billion IMF Deal; Report Drops and Reveals -DETAILS
Some taxes and tariffs must increase as part of the requirements to obtain a US$3 billion extended credit line from the International Monetary Fund.
An increase in power prices is one of them.
These price increases include increases in the value added tax and the electronic transaction levy (E-levy), as well as power rates.
The creation of an ambitious 2023 budget with a front-loading of the fiscal consolidation program and a thorough set of structural changes, particularly public expenditure review, is one of the requirements listed by finance minister Ken Ofori-Atta.
The Bretton Woods institution also anticipates that the Bank of Ghana will continue to tighten its monetary policy in order to reduce inflation.
Accra-based According to Ken Ofori-Atta’s Investors Presentation, which has the backing of Dr. Ernest Addison, Governor of the Bank of Ghana, Joy FM says that these points were made.
In order to address structural bottlenecks such as contingent liabilities of state-owned enterprises, commitment controls, arrears accumulation, and domestic revenue mobilization, Ofori-Atta pointed out that the government adjusted its revenue and expenditure measures. These changes were made to improve debt sustainability and restore macroeconomic stability.
The government, according to Mr. Ofori-Atta, is dedicated to restoring reserve buffers, securing external concessional funding from multilateral and bilateral partners, and stopping the payment of external debt service.
He added that the government would defend social safety programs and guarantee an equitable distribution of the adjustment burden.
Additionally, he stated that social spending will be prioritized to shield the most defenseless from the effects of the economic crisis and to speed up the implementation of socio-economic policies that promote growth, such as Ghana CARES, in order to lessen the effects of the pandemic and aid in economic recovery.
As part of measures to secure the bailout, the government is aiming at reaching a 1.5% of Gross Domestic Product primary surplus in the medium term, bringing inflation below 8% in the medium-term and restoring external buffers with gross international reserves reaching 3 months of import cover by 2026.
Also, the government is targeting a real Gross Domestic Product growth of 5% over the medium-term and being competitive with exports surpassing 37% of GDP in the medium term.
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