Ghana: Press zooms in GH¢1.8bn revenue shortfall, others

The Ghanaian government’s statement that it is relying on taxes on the foreign income of resident Ghanaians to close the GH¢1.8 billion revenue gap created by the suspension of the VAT on electricity is one of the trending stories in the Ghanaian press on Tuesday.
The Graphic reports that the government says it is relying on taxes on the foreign income of resident Ghanaians to close the GH¢1.8 billion revenue gap created by the suspension of the VAT on electricity.
This has become necessary to ensure the government meets its 2024 tax revenue target of GH¢143.1 billion and budget deficit target of 5.9 per cent.
As part of measures to rake in more revenue, the government introduced the 15 per cent VAT on residential electricity consumers, with former Finance Minister, Ken Ofori-Atta in a letter dated January 1, 2024, directing the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to implement this new tax measure.
However, following stiff opposition from the Trades Union Congress (TUC) and the general public, the government suspended the decision to allow for further engagement with stakeholders.
At the maiden Economic Update series last month, Minister of Finance, Dr Mohammed Amin Adam told the Graphic Business that the suspension of the tax policy would result in a revenue shortfall of GH¢1.8 billion and the government was, therefore, considering alternative measures to pluck the hole.
Responding to another question from the Graphic Business at the joint press conference of the International Monetary Fund (IMF) and the Ministry of Finance, Minister of Finance in Accra last Saturday, Dr Amin Adam said the government had decided to fall on taxes on the foreign income of resident Ghanaians to make up for the revenue shortfall.
He said this was not a new measure but an already existing one which had not been effectively implemented.
The newspaper says that the 18-month project will be carried out in the Bono and Bono East regions with six farmer groups in partnership with the Council for Scientific and Industrial Research- Food Research Institute (CSIR-FRI) and the Opportunity International Savings and Loans Limited.
According to the conversation, Ghana, one of Africa’s major producers of cashew nuts currently produces around 85,000 metric tonnes of raw cashew nuts each year, which accounts for about 1% of the world’s total production.
Of this, over 90% is exported to India and Vietnam by Asian exporters and processors. In 2021, Ghana’s export revenue from cashew nuts was USD 166 million.
However, about 90% of cashew apples which consist of about 90% of the total weight of cashew fruit are wasted annually due to limited knowledge, lack of processing and harvesting equipment,high perishability among others.
The Ghanaian Times reports that an estimated GH¢1.6bn agricultural livelihoods were lost due to the Akosombo/Kpong dams spillage that affected eight districts in the Greater Accra, Eastern and Volta regions in September and October last year.
This represents an estimated 1.2 per cent in Gross Domestic Product of Ghana, a Consultant at the Food and Agriculture Organisation (FAO) of the United Nations, Stephen Frimpong, disclosed last Friday at an expert review recovery and rehabilitation planning workshop at Sogakope in the Volta Region.
Officials of the FAO, Ministry of Food and Agriculture (MoFA), district directors of the MoFA, officials of NADMO and Ghana Statistical Service participated in the workshop.
This spillage caused direct damages to crops, livestock, forestry, aqua¬culture and fisheries of the people in the downstream communities.
In the wake of the spillage that displaced estimated 48,000 people, the FAO in collaboration with the National Disaster Management Organisation (NADMO) and other agencies are ascertaining the flood’s direct damages to agriculture livelihoods, and develop response and rehabilitation plan for the affected communities.
Data was collected from 63 per cent (117 out 184) affected communities by NADMO, MoFA and other officials last month for the assessment of the impact of the floods.
The consultant explained that the “FAO Methodology for Damage and Loss in Agriculture Assessment” tool was used in the exercise.
Mr Frimpong said several dam spillage had occurred over the years displacing thousands of people and destroying agriculture livelihood, adding that with climate change, “the floods that occurred in Ghana is not one-time thing, and we will probably get more floods in the country”.
The newspaper says that Ghana is expected to receive about US$360 million from the International Monetary Fund (IMF) following a staff-level agreement reached between the government and staff of the Fund.
However, this agreement, which is on the second review of the country’s economic programme under the US$3 billion Extended Credit Facility arrangement, is subject to IMF’s management approval and executive board consideration once the necessary financing assurances are received.
At a joint press conference in Accra on Saturday, the IMF Mission Chief for Ghana, Stéphane Roudet, said, “An agreement between the Ghanaian authorities and their official creditors on an MoU for a debt treatment in line with programme parameters would provide the needed financing assurances.
“Upon completion of the Executive Board review, Ghana would have access to SDR 29.1 million (about US$360 million), bringing the total IMF financial support disbursed under the arrangement since May 2023 to SDR 1,171.9 million (about US$1,560 million),” he said.
The press conference was to provide an update on a series of meetings held from April 2 to 12, between government representatives and an IMF staff team led by Mr Roudet in Accra to discuss progress on reforms and the government’s policy priorities in line with the second review of Ghana’s three-year programme under the $3 billion Extended Credit Facility approved by the IMF executive board on May 17, last year.
Mr Roudet said the government had made improvements on reforms since the last review.
“Performance under the IMF-supported programme has been generally strong, with most quantitative targets met. Good progress has also been made on the key structural reform milestones. The authorities’ policies and reforms to restore macroeconomic stability and debt sustainability while laying the foundations for stronger and more inclusive growth are already generating positive results.
“Economic activity in 2023 was more robust than initially envisaged, and growth projections for 2024 will be revised upward. Monetary policy has remained appropriately tight, allowing for inflation to decline rapidly,” he said.
GIK/APA