IMF team in Accra for program review, mid-year revenue measures

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The IMF team is in Accra on a staff visit to ascertain the preparedness of the country’s march towards exiting the Fund-supported Program by the end of the year.

The IMF staff would want to carry out their own assessments of Ghana’s program implementation so far.

They would also want to find out how the government has gone in preparing the ground for the announcement and implementation of the proposed new revenue measures which is highly expected to be announced in the 2018 Mid-Year Budget Review.

For some,  the visit is being described as crucial because the IMF, wants to ensure that government is going ahead with proposals to review the revenue measures, with the possibility of increasing taxes to make up for the revenue shortfalls that is facing government and to help contain the debt situation eventually.

The Fund has maintained that government needs to find a more sustainable way of dealing with the shortfall in revenue measures, rather than what is being described as “piecemeal approach”.

The Fund is therefore expected to push hard for these revenue measures to implement which could result in possible increases in some taxes and expansion of the tax net to cover sectors and businesses that are not meeting their tax obligations.

For the IMF, this visit is also very crucial as it seeks to help revisit outstanding issues, associated with the resolution of the banks and possibly look at other banks that are facing acute liquidity situations. High on the agenda will be issues of debt dynamics.

A key objective of the program which was approved in 2015 sought to help bring down the debt to sustainable levels and this matter will top the agenda.

Other areas for the team

The visit by the team would last for 7 days and would afford the team an opportunity to access how the IMF program is faring and the potential threats to its successful completion.

According to the IMF, the program is likely to be completed in April 2019. This is subject to meeting all those critical conditions including implementation of key structural reforms.

Program status                                                                           

According to the IMF, Ghana has made great strides and the program is indeed on track. Director of the Africa Department, Abebe Aemro Selassie on one of his recent visit to Ghana told JoyBusiness that looking at the progress now the country is likely to end the program as scheduled.

He, however, warned that biggest threat to the IMF program is the rising public debt. On program completion date, the IMF Africa Boss said that the program would technically end December, while the next four months would be used to carry out program review. However, analysts say this is subject to meeting some program targets.