Ghana introduces higher income tax band to shore up revenue
A reluctance by banks in Ghana to lend is threatening to stall one of Africa’s fastest expanding economies. With almost a quarter of all outstanding loans in the country at risk of not being repaid, credit granted to the private sector is increasing at nearly the slowest pace in four years. At stake is the 6.8 percent growth that the government is hoping to achieve to boost revenue and narrow its budget deficit.
Gross domestic product in West Africa’s second-largest economy experienced its quickest expansion in five years in 2017 as oil and gas production surged and following a peaceful transition in government which saw President Nana Akufo-Addo take power. While inflation has almost halved to 10 percent last month, allowing the central bank room to cut its benchmark rate to a four-year low, companies are yet to reap the benefit from these moves as they struggle to repay older loans and access new credit.