In January the IMF approved the third disbursement of $114.6 million to Ghana, under a loan programme in place since 2015 that will provide $900 million over three years (see Observer Spring 2015). According to the IMF, the programme aims to “restore debt sustainability and macroeconomic stability in the country to foster a return to high growth and job creation, while protecting social spending”.
Ghana’s economy has experienced a down-turn from an annual growth rate of 8 per cent in 2012 to 3.5 per cent in 2015, resulting in high levels of debt, inflation and currency depreciation. A slow down in the global economy and fall in commodity prices in particular have impacted the nation, which is dependent on gold, oil and cocoa exports.
The IMF called on the Ghanaian government to persist in “fiscal consolidation”, continuing to “broaden the tax base and enhance tax compliance, strengthen control of the wage bill, and enhance public financial management.” Over the last year, the country implemented a wide range of tax rises and raised utility costs, with water tariffs rising by 59 per cent and electricity by 67 per cent.
Commenting on the agreement, Ghanaian economist Dr Godfred Bokpin, quoted on news site Anadolu Agency, argued: “When you impose additional taxes, you are squeezing both companies and individuals. There is a real risk that they may not have sufficient funds left for living expenses.”