Ghana is in talks with the International Monetary Fund to get aid to help solve its debt crisis.
Ghana’s parliament has partially approved the proposed budget to be passed in 2023, overcoming the resistance of opposition lawmakers to the inclusion of a debt swap program and an increase in the value added tax.
The budget of the cocoa, gold, and oil producing country, which is facing its worst financial crisis in a generation, was approved on Tuesday.
Finance Minister Ken Ofori-Atta presented a budget proposal last month aimed at reducing Ghana’s fiscal deficit and cutting costs with new sources of revenue. It also included a plan to rehabilitate household loans.
The country will freeze the recruitment of public and private sector workers and extend the moratorium on the purchase of government vehicles and non-essential travel to deal with the debt crisis, Finance Minister Ofori-Atta said at the time. They have not offered to cut costs for high-end programs, however, nor have they provided details on many of the resources and public investments.
West Africa’s national debt is more than 100 percent of gross domestic product (GDP), and debt service payments are always between 70 percent and 100 percent of government revenue.
Ghana is in talks with the International Monetary Fund to get aid to help reduce its debt, and hopes to secure a labor union in the coming weeks.
Votes in favor of the budget fell well within the party.
Opposition lawmakers criticized plans to restructure Ghana’s debt and increase taxes on non-profits.
Supporters of the budget said people are already being taxed, and the debt the country is facing leaves them with no choice but to reform.
Commenting on the restructuring process on Monday, Samuel Arkhurst, Ghana’s director of finance and debt management, said the details of the budget should be revised following the implementation of the debt at the end of this month.