President Nana Addo Dankwa Akufo-Addo has appealed to Parliament to pass into law some outstanding revenue bills in order for government to successfully conclude negotiation agreements with the International Monetary Fund (IMF) by close of this month.
Among these bills are the Income Tax (Amendment) Bill, Excise Duty & Excise Tax Stamp (Amendment) Bills, and the Growth and Sustainability Levy Bill that are currently at the consideration stages.
“We are on course for the IMF staff to present to the IMF Executive Board, Ghana’s programme request for a US$3billion Extended Credit Facility by the end of the month.
“I thank the House for its support throughout this process, including the passage of key revenue laws. However, a few more of these measures, namely: Income Tax (Amendment) Bill, Excise Duty & Excise Tax Stamp (Amendment) Bills, as well as the Growth and Sustainability Levy Bill, are outstanding, which need the urgent attention of the House and passage to complete the prior actions.”
This, the President noted, will put the country in readiness for presentation to the IMF Board to close the deal as well as bolster government’s domestic revenue mobilisation efforts.
President Akufo-Addo made the appeal during his presentation of a message of the State of the Nation to Parliament on Wednesday.
Among other conditions, the President’s appeal – when granted – pushes the country further closer to a US$3billion deal with the International Monetary Fund (IMF).
The 3-year IMF programme, according to the President, is anchored on government’s Post COVID-19 Programme for Economic Growth (PC-PEG), aimed at restoring macroeconomic stability and debt sustainability while protecting the vulnerable.
“It is a strong reform programme which relies on frontloaded fiscal measures to increase domestic resource mobilisation and streamline public expenditures to support inclusive growth and enhance social protection,” he added.
Among other actions prior to the approval of the IMF deal is the restructuring of public liabilities through the debt exchange programme. In addition to the Domestic Debt Exchange Programme (DDEP), government is seeking to restructure its foreign debt, and has initiated discussions with bilateral lenders to create an official creditor committee – the initial step required to begin negotiations on debt-relief.
Al these measures, according to President Akufo-Addo, in his address, are ultimately aimed at returning the country to a debt sustainable path by 2028.
“It is clear that given the extent of the fiscal and debt sustainability issue we are addressing, fiscal adjustment and structural reforms are not sufficient for restoration of debt sustainability. A critical component of the measures we are implementing to address the current economic crisis is the debt operation, involving both domestic debt and external debt. The debt operation is aimed at returning the country to debt sustainable path by 2028 by reducing the debt-to-GDP ratio on a general classification basis and, in present value terms, from 103 percent in 2022 to 55 percent by 2028; and reducing the external debt service-to-revenue ratio from 29 percent in 2022 to 18 percent by 2028.
“In order to achieve these goals, the decision was taken to execute a Domestic Debt Exchange Programme (DDEP) in addition to fiscal adjustment, external debt operation and structural reform.
“We are also making progress on the external debt negotiations since the government announced an external debt service suspension on 19th December, 2022 for certain categories of external debt to ensure an orderly restructuring. This suspension is an interim emergency measure toward a comprehensive external debt operation which will contribute to the restoration of our debt sustainability in line with our request for a debt treatment under the G20 Common Framework,” he further added.
The President also expressed gratitude to the members of the Paris Club and to the Peoples’ Republic of China for the co-operation with government so far in their engagement in attempting to reach an agreement to establish an Official Credit Committee.
Concluding the the arrangements with the IMF, the President touted, will set the country on the road to recovery.
“With fiscal discipline, we will regain the trust and confidence of our business partners and the investor community, which will give us space to continue our productive plans and policies,” he added.
