The International Monetary Fund (IMF) will engage in crucial talks with the government this week as Ghana prepares to finalise its 2025 budget, set for presentation in March.
The discussions come at a critical time, with the government planning to eliminate key tax lines, including the E-levy, betting tax, and COVID-19 levy, all of which have faced significant public opposition since their introduction to boost domestic revenue.
As part of the $3 billion IMF Extended Credit Facility (ECF) programme, the Fund is expected to assess whether these proposed tax cuts align with Ghana’s fiscal consolidation goals while ensuring they do not compromise revenue targets or economic recovery efforts.
Additionally, the government faces pressure to address the country’s growing energy sector debt, which exceeds $2 billion and poses risks to power producers and the economy.
Independent Power Producers (IPPs) have warned of potential disruptions if outstanding arrears are not settled, further straining public finances and contributing to the cedi’s depreciation due to high foreign exchange demands.
The IMF will be pushing for concrete measures to address the structural inefficiencies in the energy space, improve cost recovery and ensure a sustainable financial framework for the country’s energy industry.
Government is expected to present a clear roadmap to the IMF, outlining how it intends to offset revenue losses, settle energy sector debts and sustain macroeconomic stability while implementing these tax reforms.
The outcome of the engagements will be closely watched by investors, businesses and multilateral partners as Ghana seeks to strike a delicate balance between fiscal prudence, economic growth and energy sector stability.
