President John Dramani Mahama has revealed key proposals presented by his administration to the International Monetary Fund (IMF) during recent discussions aimed at addressing Ghana’s economic challenges and ensuring the success of the ongoing Extended Credit Facility (ECF) programme.
The ECF, approved on May 17, 2023, grants Ghana a total of $3 billion over three years to support economic stability and growth.
Speaking in an interview with Bloomberg TV at the Munich Security Conference on Monday, President Mahama highlighted the government’s focus on tax rationalization, debt management, and fiscal prudence in discussions with the IMF.
He underscored the importance of these measures in navigating the current economic landscape while maintaining a strong partnership with the Fund.
A key issue raised during the IMF engagement was tax rationalization. President Mahama emphasized that previous policies imposing multiple taxes had resulted in diminishing returns, as high tax rates discouraged compliance and reduced overall revenue collection.
He stressed the need for a more efficient tax structure that promotes economic growth while ensuring sufficient revenue generation.
The President also addressed the challenges posed by Ghana’s ongoing debt restructuring, particularly the significant domestic debt repayments scheduled for this year. With over $15 billion due in 2025, the government has reactivated the sinking fund to manage these obligations effectively.
“We also have the issue of the debt restructuring and humps that have been created this year. We have to pay in excess of $15 billion on the domestic debt exchange,” Mahama stated.
“So what we’ve done is to reactivate the sinking fund and put more resources into it to take care of the repayments that have to be made this year.”
Reaffirming his administration’s commitment to financial prudence, President Mahama stressed the importance of cutting wasteful expenditure and reallocating resources to priority programmes.
“We must be more prudent in our handling of our finances. We must also look at the expenditure side and see how we can cut waste and shift resources to more priority programmes,” he noted.
The government’s ongoing engagement with the IMF remains critical as Ghana works towards stabilizing its economy, fostering investor confidence, and ensuring sustainable growth under the ECF arrangement.
