It will be difficult for Ghana to raise external loans - Economist

Ghanaian Economist, Emmanuel Amoah-Darkwah, has stated that it is close to impossible for the government of Ghana to receive loans externally to run the economy, hence, their insistence in implementing the e-levy.

According to him, the external factors that could help Ghana raise external loans, especially a commercial loan has become difficult.

“Looking at the current ratings by Fitch and raising concerns about how we are going to amortize our debts has made it very difficult for the government.”

Mr. Amoah-Darkwah indicated this circumstance has put the government between a rock and a hard place “forcing them to look at policy options going into the future.”

In an interview with Samuel Eshun on e.TV Ghana’s Fact Sheet show, Mr Amoah-Darkwah, described the government’s position as critical “because we have a very tight fiscal space.”

Quoting three (3) expenditure items in the 2022 budget, Mr. Amoah-Darkwah pointed out that the government has allocated GH¢37billion for interest payments, Gh₵35 billion as compensation of government employees, and grants of about GH¢26 billion to government institutions “then we have capital expenditure.”

He was quick to note that a sum of these three (3) expenditure items stood at GH¢98billion with the revenue projection in the same budget standing at GH¢100 billion.

On his accord the total expenditure of the country for 2022 is GH¢137 billion, indication a staggering GH¢37 billion deficit from the projected revenue.

“Now the option we have to raise the deficit is either to borrow or raise the revenue internally and this has put gov’t between a rock and a hard place,” where it is finding it difficult to raise revenue from foreign agencies and now has to look inward.”

Ghana’s finance minister Ken Ofori-Atta announced that the government intends to introduce an electronic transaction levy (E-Levy) in the 2022 budget. He said this was to “widen the tax net and rope in the informal sector”.

The proposed levy, which will come into effect on 1 February 2022, is a charge of 1.75% of the value of electronic transactions. It covers mobile money payments, bank transfers, merchant payments, and inward remittances. The originator of the transactions will bear the charge except for inward remittances, which will be borne by the recipient. There is an exemption for transactions up to GH¢100 ($16) per day.

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