Ghana's economy may be at risk of destabilization if the country exits the International Monetary Fund (IMF) programme prematurely, according to economist Professor Godfred Bokpin. Speaking on Joy FM, Bokpin warned that the economy has deteriorated further since Ghana joined the IMF programme, and an early exit could send negative signals to investors.

Bokpin, a Finance and Economics Professor at the University of Ghana, stressed that Ghana's economic struggles are more severe than when the country initially sought IMF support. "We are an economy that is struggling. We are in a worse situation than we were when we went to the IMF," he stated, urging the government to consider extending the programme if necessary.

The economist's concerns are rooted in Ghana's restricted access to international capital markets until 2027, which complicates the country's economic recovery. The World Bank has advised Ghana against rushing back to the market, pointing out that countries that undergo debt restructuring typically need three to four years to regain investor confidence.

Bokpin also highlighted Ghana's inefficient tax system as a major economic challenge. He revealed that only 41% of the economy contributes 86% of tax revenue, leaving a substantial portion of economic activities untaxed. "A large chunk of our economy is not taxable. The bigger percentage of our economy contributes just about 40% of tax revenue," he explained.

To address this issue, Bokpin recommended properly taxing high-net-worth individuals, which he estimated could generate up to $160 million annually. He also cautioned against overburdening compliant taxpayers with additional levies, warning, "If we are not careful, we will kill the chicken that lays the egg."

Ghana continues to implement fiscal measures under its $3 billion IMF programme, initiated in 2023. While the government remains optimistic about meeting its fiscal targets through improved tax collection and expenditure controls, Bokpin insists that a more strategic approach—possibly extending the IMF programme—would be in Ghana's best interest.

"The idea of reviewing the programme with the possibility of an extension should not be off the table," he concluded. As Ghana navigates its economic challenges, Bokpin's warnings serve as a timely reminder of the need for careful consideration and strategic planning to ensure a stable and prosperous economic future.