Ghana’s new administration is in talks with the IMF to adjust its $3 billion bailout to lower ambitious revenue targets requiring 24% of GDP by 2028. President Mahama emphasizes the need for a tax system overhaul, affirming commitment to the program despite challenges. The country is recovering from a severe debt crisis that led to significant debt restructuring.
Ghana’s new administration is engaging with the International Monetary Fund (IMF) to modify its existing $3 billion bailout package. The goal is to alleviate the stringent revenue targets imposed by the current agreement, which seeks to raise Ghana’s revenue to 24% of GDP by 2028. This target, set before President Mahama took office, necessitates a comprehensive reevaluation of the nation’s tax structure to improve compliance.
President Mahama stated, “We were not at the table when this agreement was drawn up.” He stressed the importance of reassessing the taxation approach, indicating a need for revision while reaffirming the administration’s commitment by noting, “We are determined to continue with this program.”
Ghana has been attempting to recover from a serious debt crisis that led to the request for IMF assistance in 2022, following a default on most of its debts that same year. The country has since restructured over $31 billion in various debts, including eurobonds and domestic obligations. The IMF has shown a willingness to consider changes to the terms, provided that Ghana’s revised economic targets remain achievable.
As the administration moves forward, it must navigate the complexities of negotiating amendments to the IMF agreement while ensuring continued support from the Fund. This is crucial, especially in light of the public expectations that accompany President Mahama’s recent overwhelming electoral success.
In summary, Ghana’s government is actively seeking adjustments to its IMF bailout terms to mitigate demanding fiscal goals. President Mahama highlights the necessity for an updated tax system to meet these targets while maintaining the program’s continuity. The successful negotiations will be essential for sustaining IMF support and navigating the socio-economic landscape post-debt crisis.
Original Source: techlabari.com
