IMF bailout: Freeze on employment will be a huge challenge – Prof. Quartey

The Director of the Institute of Statistical, Social, and Economic Research (ISSER) of the University of Ghana, Professor Peter Quartey, has noted that the conditions contained in the programme by the International Monetary Fund may pose some challenges to some areas of the economy.

He intimated that the deal, even though may be on the path to restoring economic stability, some sectors including employment may suffer.

Prof. Quartey cited the performance of the local currency in recent times.

“As we are witnessing now, the exchange rate is appreciating, if it’s stable then you will not see an automatic adjustment. So, it is something that will bring some hardships in some areas but benefits as well,” he noted.

However, Prof Quartey stated that “Let’s take the case of employment, I have seen in the budget statement of 2023 that there is a freeze on employment. What it means is that we will not be able to employ the number of youths we are churning out of our institutions annually and that is a huge challenge. Already youth unemployment is huge and if for three years you cannot employ, you can imagine the effect.”

Some of the areas that may also be affected, according to the ISSER Director, are businesses and persons who pay income tax.

He stated that increasing VAT will have some consequences on businesses.

“We are basically doing well when it comes to income tax except that it is only a few people who are overburdened. Where the challenge is, is VAT. If you look at our VAT receipts compared to what is within the sub-region, we are way off the target. That is one area that may be increased and with the effect of increasing VAT, it might bring challenges,” Prof. Quartey posited.

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