An Economist at the University of Ghana says Ghanaians must be ready to go through tougher times as Ghana prepares to go into a programme with International Monetary Fund.
Ghana is expected to begin an IMF programme early next year after the first round of talks with the IMF ended last week. Citi Business News has learnt that further talks are expected between the two parties at the annual general meetings of the World Bank and IMF in Washington DC in October.
Some captains of industry have lamented about how the IMF programme will hurt their businesses and will result in high unemployment, which will affect the nation as a whole. 2014 has been a challenging year for Ghana having to grapple with.
The year begun with cedi entering a free fall mode. By the end of January, the local currency had depreciated by 8%. The central bank stepped in on February 4 with a set of revised and new foreign exchange rules. But the rules did not have the expected impact on the cedi which got the central bank towithdraw the rules conceding that there were implementation challenges. The country also experienced budget overruns and a huge budget deficit worsening the country’s challenges coupled with the wage bill that went beyond manageable levels resulting from the implementation of the single spine salary structure.
These coupled with many other challenges pushed government to seek help from the IMF.
Senior Lecturer at the Department of Economics at the University Of Ghana Dr. Ebo Turkson says the average Ghanaian is going to be made to pay to help solve the mess that has been created by government.
“When we concluded the negotiations the first thing that Ghanaians should expect is that is going to come at a cost. When IMF comes in to help out in a situation like that, what is the core reason why you are in that kind of situation? And that is what they are coming to tackle.”
Dr Ebo Turkson hinted Citi Business News of an impending value added tax imposition on petroleum product. This is all being done to help government to raise enough revenue to pay for his spending so that government does not have to be borrowing and running fiscal deficit. This he said will help put the economy back on track, getting the economy to be salvaged from collapsing but Ghanaians will have to be position to help pay more taxes.
