Commenting on the recent approval of the $3 billion IMF Bailout, Professor Peter Quartey, the Director of the University of Ghana’s Institute of Statistical, Social, and Economic Research (ISSER), has communicated that Ghana’s program with the International Monetary Fund will have both benefits and drawbacks for Ghanaians, the economy, and businesses.
Speaking during an interview, Prof Quartey noted that the programme will help stabilize the exchange rate and lower the inflation rate, however, it comes with its own other negative impacts, he added.
“As we are witnessing now, the exchange rate is appreciating. If it’s stable, then you will not see an automatic adjustment. So it is something that will bring some hardships in some areas but benefits as well.
“Let’s take the case of employment, I have seen in the budget statement of 2023 that there is a freeze on employment. What it means is that we will not be able to employ the number of youth we are churning out of our institutions annually – and that is a huge challenge. Already youth unemployment is huge and if for three years you cannot employ, you can imagine the effect.”
Professor Peter Quartey
This, he claims, will harm many Ghanaians and businesses in the future.
Prof. Quartey remarked that taxes should be raised in some places to help with local revenue mobilization, as advised by the IMF.
“We are basically doing well when it comes to income tax except that it is only a few people who are overburdened. Where the challenge is, is VAT. If you look at our VAT receipts compared to what is within the sub-region, we are way off the target. That is one area that may be increased and with the effect of increasing VAT, it might bring challenges.”
Professor Peter Quartey
Delay In Next IMF Loan Tranche If Target Is not Met
More so, the economist, Prof. Quartey has urged the government to strive tirelessly to meet the IMF bailout requirements following the approval.
The bailout, he said, is not just about receiving funds from the IMF to temporarily restore some stability in the economy, but also taking advantage of the programme’s details to raise revenue among others and limit reliance on external sources of funding.
“There are other areas as well that the program is going to support to ensure that we reset the economy. Revenue is one major area, and our expenditure – in terms of getting value for money in terms of spending and ensuring growth, and stability in all its aspect. I think the programme is quite comprehensive.
“The real challenge starts when we receive the money. We need to ensure that we work assiduously to achieve whatever that is stated in the programme. Otherwise, come the next review if we are not able to meet them, the release of the tranche might not come.”
Professor Peter Quartey
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