The International Monetary Fund (IMF) is set to begin critical discussions with the Ghanaian government this week as the country finalizes its 2025 budget, scheduled for presentation in March.
These talks come at a crucial time, as the government plans to eliminate several key tax measures, including the controversial E-levy, betting tax, and COVID-19 levy. These taxes, introduced by the previous administration to boost domestic revenue, have faced strong opposition from businesses and citizens alike.
Given Ghana’s participation in the IMF-backed $3 billion Extended Credit Facility (ECF) program, the Fund is expected to closely examine how these proposed tax cuts align with the country’s fiscal consolidation efforts. The IMF will seek assurances that removing these levies will not compromise revenue targets or hinder Ghana’s economic recovery.
Beyond revenue concerns, the government is also under pressure to resolve Ghana’s growing energy sector debt, which remains a major strain on public finances. The sector’s liabilities, estimated to exceed $2 billion, continue to threaten the financial stability of power producers and the broader economy. Independent Power Producers (IPPs) have repeatedly warned of potential supply disruptions if the government fails to settle outstanding arrears.
The financial distress in the energy sector has also contributed to the depreciation of the cedi, as the government requires substantial foreign exchange to meet its payment obligations to power producers. The IMF is expected to push for concrete measures to address structural inefficiencies within the energy sector, improve cost recovery, and establish a sustainable financial framework for the industry.
As part of the discussions, the government is expected to present a clear roadmap to the IMF, outlining strategies to offset revenue losses from the proposed tax cuts, settle energy sector debts, and maintain macroeconomic stability.
The outcome of these engagements will be closely monitored by investors, businesses, and multilateral partners as Ghana seeks to balance fiscal discipline, economic growth, and energy sector stability
