Government looks for homegrown solutions to economic woes
E-Levy passed at 1.5%
A senior fellow at the Institute of Economic Affairs (IEA), Theodore Markham, has said the reason government do not want to run to the International Monetary Fund (IMF) for financial assistance is because the conditionalities involved may affect government's flagship programmes including Free SHS.
This comes after the Finance Minister, Ken Ofori-Atta, stated categorically that government will not return to the IMF for a financial bailout amidst the economic challenges.
He however noted that going back to the IMF for a bailout, specifically credit facility, will help bridge the country’s resource gap.
“The Honourable minister of finance has so far ruled out the IMF option. However, it is not clear whether that will bring finality…we all know what it entails to go to the IMF. When you go to IMF, the fund will put on the table a bailout programme. This bailout programme comprises two things; a credit facility that will bridge the resource gap to bring you out of trouble. It doesn’t come with nothing. We have policy prescription that goes with it,” Mr Markham said at a press conference on Tuesday, March 29, 2022.
“This policy prescription is popularly or notoriously called conditionalities. These conditionalities will try to get you out of trouble so that you don’t go back to the same route which brought you into trouble.
The problem with that is, this may affect some of the sensitive flagship programmes of the government which are dear to the heart of the government and to the people; especially the vulnerable groups,” he added.
Meanwhile, government has considered a homegrown remedy to solve the current economic challenges.
According to the Finance Minister, Ken Ofori-Atta, the introduction of E-Levy by government is to widen the country’s tax net, as well as, rope in more revenue for the country.
Parliament on Tuesday, March 29, passed the E-Levy bill.
The percentage [1.75%] was reviewed downward to 1.5%.
