A former Finance Minister, Seth Terkper, is asking the government to heed calls by stakeholders to consider returning to the International Monetary Fund (IMF) to finance the country’s budget deficit instead of introducing a tax on electronic financial transactions.
Mr. Terkper, who has already registered his opposition to the idea of the E-levy proposed by the government believes that not much revenue can be raked in with the new tax.
His remarks come after calls from different stakeholders including lawmakers for the government to go to the IMF for financial support and policy credibility.
Although the government insists on not going back to the IMF, the former Finance Minister believes Ghana’s problems of being locked out of the international capital market among others will worsen in the coming years if the government remains adamant and does not take decisive action immediately.
Mr. Terkper noted that the government must consider its expenditure and make some cuts to help the situation.
“Our issue is expenditure. Are we able to finance the programs which we have on the table? Even in the medium-term budget, from 2023 to 2025, you will see E-levy running through it. Even if it has been factored and that is what we are presenting as home-grown, are we not going to borrow? All your revenue from now through that period, if you don’t do any major restructuring, it is only going to pay compensation and interests,” the former minister said.
Seth Terkper said while in office and was faced with a similar challenge, the NDC government despite being in an election year, publicly went back on its promise to construct 150 E-blocks and instead constructed about 50, to enable it to channel its investments into other pressing expenditures.
Seth Terkper said the action taken by the NDC is a model the government can follow to navigate the current challenge.