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Finance Minister Ken Ofori-Atta revealed that the government will withdraw nearly $ 1 billion from the International Monetary Fund (IMF) to support the economy.
According to the minister, this is necessary to facilitate the ongoing recovery. Ken Ofori Atta added that the government will target certain critical areas that will help accelerate the recovery of the economy.
Mr. Ofori-Atta hinted that they are considering directing funds to sectors that will contribute to job creation as well as certain areas under the Ghana Cares program.
The government is also examining programs to improve revenue mobilization in these times and the digitization of the economy.
Ghana and Special Drawing Rights
The IMF’s board earlier this month approved $ 650 billion to support member countries in the fight against the Covid-19 pandemic. Member countries are expected to see their accounts credited with their share of the $ 650 billion as of August 23, 2021.
According to the IMF, this move would ensure its members, including Ghana, a solid external position to voluntarily channel part of their SDRs to increase lending to low-income countries through the Trust Fund for Reduction of Credit. IMF Poverty and Growth (PRGT).
There have been initial reports that Ghana may not be able to withdraw the funds due to certain debt obligations to the IMF. But the government explained that the challenge has been met. Therefore, there is no need to worry.
Some analysts have argued that the funds hitting the accounts of the Bank of Ghana could also help improve Ghana’s reserves, which will help stabilize the Ghanaian cedis.
Creation of the Development Bank of Ghana
The Minister of Finance also informed THE JOY OF BUSINESS that he is optimistic that the Development Bank of Ghana will fully begin operations from October of this year.
“We have sent the final list of all board members and are awaiting approval from the Bank of Ghana,” he added.
The Minister also revealed that they have appointed the Managing Director of the Bank and that the government expects them to fully take off once the necessary approvals from the Bank of Ghana are obtained.
Ken Ofori-Atta on income mobilization
The minister also revealed that he is optimistic that Ghana’s income situation will improve in the coming months. This is based on ongoing reforms and some projects undertaken by the Ghana Revenue Authority.
Ken Ofori-Atta is also betting his hopes on the decision to replace tax identification numbers with the Ghana Card. This, he said, “will allow tax authorities to better identify the activities of individuals in relation to their tax obligations, a measure which will help to better assess the tax obligations of such persons.”
He added that “We look forward to the Ghana.gov portal also helping improve Ghana’s revenue mobilization in the future. So far, over $ 20 billion has passed through this platform since last year, and we believe things will get better.
Mr. Ofori-Atta added that with the application of technology in revenue mobilization, the expected turnaround is expected to occur soon.
“Ghana currently has a tax-to-GDP ratio of 13%, which is well below the regional average of 19%. But we are optimistic that things will improve in the future, ”he said.
Reorganization of the banking sector and impact on the economy
Regarding the recent cleanup of the banking sector, the Minister of Finance noted that the exercise has done a lot to stabilize the banking sector and the economy as a whole.
“You can see for yourself, the impact on the Ghanaian cedi, inflation and the strengthening of banks in the country. We believe Ghana has a more sanitized system that we can all be happy with, ”added Ken Ofori-Atta.
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