Lord Mensah: It will be suicidal to run to IMF over E-Levy uncertainty

Prof Lord Mensah, an associate professor at the University of Ghana Business School, has said it is too early for Ghana to consider an International Monetary Fund (IMF) programme, despite a drop in expected revenue from the Electronic Transfer Levy (E-Levy).

The government has so far realised roughly GHC60 million from the E-Levy, far below the projected GHC600 million.

Speaking to Kwaku Nhyira-Addo on The Asaase Breakfast Show on Tuesday (28 June), Mensah said: “I see it as suicidal to go to the IMF so quickly after implementing the E-Levy. Policy uncertainty in this period of our economic landscape is suicidal.”

“I think that we are getting it all wrong if we say that the E-Levy is not bringing in as much as was initially projected and thus we should resort to the IMF.

“Remember the Ghanaian economy is not an isolated economy. It is purely globally integrated and so if the globe is not doing well, obviously it has a tendency of building up into our economy. So, let us wait and see how things go, as we move on ahead of time.”

Gabby backs IMF programme in “principle” as E-Levy revenue stumbles
Gabby Asare Otchere-Darko, the political strategist and member of the New Patriotic Party (NPP), has said the government has so far realised roughly GHC60 million from the Electronic Transfer Levy (E-Levy), far below the projected GHC600 million.

Otchere-Darko’s comment comes following the apathy that has greeted electronic transactions since the rollout of the E-Levy on 1 May.

“Our economy is growing faster than most countries around the world. But that alone can’t save us as confidence in our ability to service our debts is lowering. We can’t continue to use all the little revenues raised to pay our debts. Very soon we may have to borrow to pay wages,” he tweeted on Monday (27 June 2022).

“After five months of stalemate and bashing, the E-Levy, after implementation, is delivering only 10% of estimated revenues; our revenues remain very low as compared to the rest of the world; debt levels dangerously high; the cedi, like most currencies, struggling against the US dollar.”

He added: “What options are open to government? The question should rather be: what option, if adopted, will reinject investor confidence in our economy? Even if we find the $3-5 billion required, will that help? The E-Levy, which was to have given us some GHC600 million by now, has done less than GHC60 million.”

“I’m for IMF in principle”
To this end, Gabby, as he is affectionately called, tweeted: “Ghana is a member of the IMF. The world is in serious crisis. Ours is not helped by our high debt and low income levels. With the economy still growing, but investor confidence low, government being compelled to cut down capital expenditures will eventually lead to job losses unless …

“We do something that will inject confidence in our capacity to ride this heavy storm, and that something should happen pretty quickly. Are you against an IMF program?

“I am not for an IMF program that throws peanuts at us but imposes conditions that will end up hurting the poor, jobs and businesses more. COVID-19 and war in Ukraine are not of Africa’s doing but more to our doom. A program that pretends it is all our doing is doomed to fail.”

Support E-Levy to create jobs
The chief executive officer of the National Youth Authority (NYA), Pius Enam Hadzide, has emphasised the need for the youth to support the implementation of the Electronic Transfer Levy (E-Levy).

Hadzide said such support will go a long way to support the YouStart initiative to reduce youth unemployment in Ghana.

Speaking at a stakeholder engagement on the implementation of YouStart programme, Hadzide said: “The process to leverage our creative and entrepreneurial spirit has been awakened and it must be embraced by us all.

“I also want to use the opportunity to thank the Parliament of Ghana for passing the E-Levy Bill into law, the E-Levy Act.

“Because the E-Levy is one of the critical enablers of the YouStart initiative, and we are grateful that Parliament passed the E-Levy Bill, and I want to encourage all of us to support the implementation of the E-Levy law,” Hadzide said.