Dr. John Kwakye
The Director of Research and senior economist at the Institute of Economic Affairs (IEA), Dr. John Kwakye has said calls from a section of the public for the government to seek assistance from the International Monetary Fund (IMF) to deal with its fiscal imbalances are not immediately necessary.
According to him, the government can raise more revenue from staying fiscally disciplined and cutting down on some of its expenditure.
Speaking on local radio station in Accra, Dr. Kwakye said although going under an IMF programme comes with some advantages the government may not want to subject itself to the fiscal discipline measures the fund will insist on.
“The main advantage of going to the IMF is that you get the policy credibility. Investors don’t have hope in you now so you go to the IMF and because they are giving you policy advice, investors will know that you are going to be disciplined and that can help you when you go to the bond market,” he said.
Dr. Kwakye further noted that the government has not done enough to seal the loopholes in its revenue generation process, which could help raise enough money for the government to the extent that it wouldn’t need the much-touted E-levy or the support of the IMF.
“I think there is room for the government to scale-up revenue mobilization because there are a lot of loopholes they need to fill. Exemptions, illicit financial flows, property taxes that we don’t collect and administrative lapses. If you plug all these loopholes, you will scale up revenue substantially and even the E-levy will not be needed. You will get much more than the E-levy,” he said.
Dr. Kwakye said the government must examine itself and its options to make the best decision, and advised that it must undertake some fiscal discipline to free itself from the current situation.
The government has indicated at forums that going to the IMF is not an option and insists on the passage of the E-levy while a large majority of the population including CSOs are pushing for an IMF program or undertaking expenditure cuts on government spending.
By Jamila Akweley Okertchiri