Bussiness
Just In: IMF Approves $3 Billion bailout for Ghana to help revive economy
The International Monetary Fund (IMF) has approved Ghana’s request for a $3 billion bailout to support the debt-ridden West African nation’s economic recovery, according to people familiar with the matter.
The IMF’s Executive Board met to discuss approval for the funding on Wednesday and is scheduled to announce its decision later in the day. The IMF’s press office declined to comment.
Ghana’s cedi has become the world’s best performer against the dollar over the past six months as investors bet the nation was on the brink of securing the IMF funding. The currency traded 1.7% stronger at 10.8625 per dollar by 4:12 p.m. in Accra, Ghana’s capital. The country’s eurobond maturing in 2032 rose 0.5 cents to 40.2 cents on the dollar.
Ghana took tough economic decisions, including increasing taxes and imposing losses on domestic investors, to secure the package from the IMF. The fund’s backing came after the country last week clinched financial assurances from a bilateral-creditors group that’s co-chaired by China and France.
The three-year loan will help replenish Ghana’s foreign-exchange reserves, which have dropped almost 50% from a peak in August 2021 as the central bank used them to defend the cedi.
Fund Disbursements
Minister of State for Finance Mohammed Amin Adam said earlier this week the government expects to receive an initial disbursement of $600 million this week, and a further disbursement of the same amount in November. The remainder is likely to be disbursed in equal portions of $350 million every six months, subject to IMF reviews, he said.
The government is also in talks for an additional $900 million of budget support from the World Bank over a three-year period, even as it plans to start negotiations with eurobond holders to restructure $13 billion of debt owed to private investors.
Ghana is restructuring its debt under the Group of 20’s so-called Common Framework as part of measures to secure the IMF program. The mechanism seeks to improve coordination between the traditional Paris Club of sovereign creditors and new ones like China, now the biggest lender to emerging nations. Zambia and Ethiopia are also using the framework to try and revamp their liabilities after their economies were ravaged by the effects of the COVID pandemic and the Russian-Ukraine war.
Source: Bloomberg
Bussiness
Ghana’s GDP shows economy is fast recovering despite DDEP – Finance Ministry
Ghana’s Gross Domestic Product (GDP) indicates a rapid economic recovery despite global challenges and ongoing debt restructuring, according to the Ministry of Finance (MoF).
The Ministry in a statement today indicated that latest data from the Ghana Statistical Service (GSS), cumulative economic growth for the second quarter (Q2) of 2024 reached 6.9%, a notable increase from the 4.7% recorded in the first quarter of 2024.
The MoF statement further noted that, “The economy’s robust recovery is in response to the macroeconomic stability and growth interventions that government is pursuing under our IMF-supported Post Covid-19 Programme for Economic Growth (PC-PEG).”
According to them, the overall real GDP growth for the first half of 2024 rebounded strongly, with year-on-year GDP growth averaging 5.8% for the period, significantly higher than the 2.9% recorded in the same period in 2023.
By Edem Mensah-Tsotorme
Read full statement below
Bussiness
Facebook, Youtube, online trading companies must be taxed – Deputy Finance Minister
The Deputy Finance Minister Dr Alex Ampaabeng, has proposed that online trading companies should be taxed to bolster the economy.
He noted that these companies, both local and international, generate significant revenue from their Ghanaian clients, which underscores the necessity for taxation.
In an interview with Bernard Avle on Channel One TV’s The Point of View, Dr Ampaabeng pointed out various potential revenue sources for Ghana, including online businesses and content creation companies.
He questioned why other national companies operating in Ghana are taxed, but social media platforms like Youtube and Facebook, which run numerous advertisements, are not included in the Ghanaian tax system.
According to him, these social media companies earn profits from the advertisements they display, and online trading companies also generate income from the sale of their products and services.
He mentioned online trading companies such as Jiji, Jumia, and Tonaton, which he believes surpass all physical marketplaces in Ghana in size.
According to him, “I can’t think of a country which has not gotten a digital service tax system of some sort, so Ghana is long overdue. Just to make an example so that people will appreciate where I’m coming from. Go to Youtube and play a video, within one or two minutes, you are going to watch about two, or three adverts.”
“What it tells you is that Facebook or Youtube is making profits right here in Ghana. Go to your Facebook account, and you are going to see a number of adverts on your right, left. What it is telling you is that Facebook is making profits right here in Ghana and not being taxed. Meanwhile, there are companies operating in Ghana, for jurisdiction reasons, of course, that are being taxed,” he said.
The Deputy Minister added that “So then, it comes to the question of the application of our tax laws. Revenues generated in Ghana are subject to taxes. We have Facebook, TikTok and all those players, these are digital platform owners.”
He stressed, “Then we have the digital or market players, here we are talking about individuals who are using the digital platforms. We have Jiji, Jumia, Tonaton, these combined, are bigger than all physical marketplaces in Ghana. And it tells you the volume of transactions, that are going on there.”
He expressed his hope that individuals earning online profits from Ghanaian residents would be taxed.
“There are conversations ongoing, I wouldn’t want to pre-empt anything, maybe in the future, it might not be anytime soon, what I would like to see, is a Ghana where people who are earning all forms of profits in the country are subject to taxes. People who are trading online to Ghanaian residents, people who are generating revenue from Ghana are allowed to pay taxes,” he noted.
Additionally, he proposed a collaboration with the government to curb cybercrime by registering and verifying these online trading companies.
“We can have a system where the government engages these operators, so individuals will submit their Ghana Card and are registered and verified,”he concluded.
Source: Citinewsroom.com
