The Institute of Economic Affairs (IEA) has emphasized the urgent need for substantial fiscal adjustments to stabilize Ghana’s economy. These measures will likely involve both tax hikes and spending cuts.
Speaking at a press conference in Accra on Wednesday, June 12, 2024, Dr. John Kwabena Kwakye, the Director of Research at the IEA, voiced concerns that the market may question Ghana’s policy credibility if the country fails to implement these essential expenditure reductions.
He stated, “Restoring the economy to normalcy will typically require significant fiscal adjustments, including tax increases and expenditure cuts, which will entail economic hardships.”
Lacking the boldness to take these measures knowing that the markets may not trust our policy credibility, we turn to the IMF for financial bailout.
The bailout is normally supported by a program that is invariably conditioned on stringent and often socially costly measures, including expenditure cuts, tax increases, removal of subsidies, increases in utility tariffs, and public sector employment freeze.
LISTEN TO THE AUDIO BELOW:
Story by: Osei Akoto (Teacher Kojo) #Ahotoronline.com
