The Executive Board of the International Monetary Fund (IMF) unanimously approved the $3 billion bailout for Ghana at a meeting held on Wednesday, May 17, 2023, in Washington, United States of America.
$600 million out of the $3 billion loan was disbursed on the day of the approval of the bailout and $350 million would be disbursed every six months for the three-year programme.
Two days after the approval of the IMF programme, the Nana Addo Dankwa Akufo-Addo government is being criticised for the deal it got for the $3 billion bailout.
The Minister for Finance, Ken Ofori-Atta, and other parties who negotiated on behalf of the government of Ghana for the bailout have been described as wicked because of the agreement they settled on.
Experts including University of Ghana don, Prof Godfred Bokpin, have stated that the deal will worsen the hardships ordinary Ghanaians are currently going through.
Here are some of the conditions supposedly enshrined in the $3 billion bailout agreement:
- Removal of Value Added Tax (Vat) exemptions.
- Reformation of the Corporate Income Tax (CIT) by phasing out tax holidays and exemptions.
- Reducing Customs exemptions.
- Increasing progressivity in personal income taxes – income taxes will be going up.
- Automatically adjusting fuel levies by exchange rate movement and inflation.
- Quarterly tariff adjustment including electricity and water tariffs.
- Government can employ only 0.5 per cent of the current labour force.
- A limit to the rate at which the government can increase the salaries of public sector workers.
- A tax-to-GDP ratio of 18 per cent before the end of the three IMF programme.
- A second debt restructuring exercise – Domestic Debt Exchange Programme “Part II”.