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General News of Thursday, 26 February 2015


IMF Bailout:: Gov’t to remove GHS50 million petroleum subsidies

Subsidies on petroleum products totaling GHS50million are expected to be scrapped off as part of an IMF bailout plan reached with government.

The scrapping of these subsidies is likely to inch up petroleum prices for 2015, irrespective of changes in the price of petroleum prices on the international market.

This was contained in a study report concluded by the IMF staff team as it heads back to its New York headquarters for a final approval of the 3-year bailout plan.

As part of an agreement with IMF for a $1billion in bailout loan, Government is expected to spend less, collect more through taxes and engage in inflation targeting for the next three years.

These necessary aims will also see Ghana’s economic growth record a historic low of 3.5%

“The program rests on three pillars – restraining and prioritizing public expenditure with a transparent budget process; increasing tax collection; and strengthening the effectiveness of the central bank monetary policy”.

The general posture of the IMF which favours public spending cuts will test President Mahama’s social infrastructure plan to build more schools, affordable housing, hospitals and roads.

President Mahama made these announcements in his 2015 State of the Nation address Wednesday.