Ghana Seeks Bailout Loan

August 11, 2014 Taxation in Ghana

ACCRA – Soaring government expenditures and plummeting tax revenues have forced Ghana to seek financial aid from the International Monetary Fund.

Late last week the International Monetary Fund issued a statement announcing that the government of Ghana has officially requested a new bailout loan in order to meet its debt obligations and expenditure requirements.

Currently the budgetary deficit in Ghana has reached a level of 10 percent of the national GDP, and the government’s own cash reserves are dwindling, leaving little room for the government to meet its payment obligations.

The finance minister of Ghana Seth Terkper already confirmed that the government would also seek to raise as much as USD 1.5 billion through international bond issuance over the course of the year.

The current fiscal position of the country has been attributed to a sharp decline in tax revenues being collected by the government, along with a marked increase to government expenditures.

Economic growth in the country has also been hampered by fluctuations in the demand for mineral export, and significant fluctuations in the value of the national currency, with both factors slowing down economic expansion while jeopardizing tax revenues.

Photo By: Oluniyi Ajao