Unpacking the gendered impact of IMF policies in Ghana: A call for inclusive economic justice

Ghana’s economic policies have long been influenced by its partnership with the International Monetary Fund (IMF), primarily through fiscal reform programmes to stabilise the economy. 

However, recent research by ActionAid Ghana reveals an alarming oversight that these policies often fail to account for gender disparities, unintentionally deepening economic inequality.

ActionAid Ghana’s new report, “Impact of IMF Policies on Tax Systems and Gender Equality in Ghana,” underscores how IMF-backed tax reforms disproportionately burden Ghanaian women while intended to enhance revenue generation and economic stability.

ActionAid is a global federation advocating for social justice, poverty eradication and gender equality. As part of its broader economic justice initiatives, ActionAid highlights the need to address structural inequalities, focusing on fair tax systems, debt justice and policies that protect vulnerable groups.

In Ghana, ActionAid’s commitment to economic justice challenges systems that marginalise women and low-income populations, advocating for reforms that promote equitable economic participation.

Historical perspective

Since joining the IMF in 1957, Ghana has frequently relied on the institution during economic downturns. The IMF influenced Ghana's tax system through Extended Credit Facility (ECF) agreements, with reforms prioritising revenue generation.

However, ActionAid’s report argues that the IMF's focus on indirect taxation, like the Value Added Tax (VAT), has regressive effects. This tax disproportionately impacts women, who are overrepresented in lower-income households and informal employment sectors, highlighting a critical gap in the IMF’s gender-sensitive approach.

IMF tax policies

The report reveals that IMF tax policies in Ghana rely heavily on indirect taxation, burdening women more than men. Women, particularly in lower-income brackets, are disproportionately impacted by the VAT-heavy tax system. With fewer assets and less formal employment, Ghanaian women shoulder a higher share of indirect taxes, exacerbating economic insecurity and limiting economic participation.

This gender-blind approach is troubling, especially given Ghana's unique socio-economic dynamics. ActionAid’s report calls for a tax system that supports women’s economic engagement, particularly in informal sectors where they are highly represented. Gender-sensitive policies could play a crucial role in mitigating economic disparities and fostering inclusive growth.

Limited progress

Though the IMF introduced a gender strategy in 2022, ActionAid’s report finds that this approach falls short in Ghana.

The IMF’s focus on achieving macroeconomic stability often overshadows equity concerns, resulting in policies that may inadvertently deepen gender inequality. According to the report, the IMF’s technical assistance and surveillance mechanisms still lack gender-disaggregated data collection, a critical tool for analysing policy impacts on different demographic groups.

Stakeholders in gender and tax reform

Key players involved in Ghana’s tax and gender reforms include government bodies, international organisations and non-governmental organisations (NGOs), such as ActionAid.

Government entities, notably the Ministry of Finance, play a central role in policy implementation. NGOs and international organisations such as the World Bank and UN Women bring gender-focused expertise and advocacy to these discussions. Academic institutions also contribute crucial research on gendered economic impacts, providing evidence to guide equitable policy reform.

Recommendations

The ActionAid Ghana report advocates several actionable steps to promote gender equality within Ghana’s tax system.

One such recommendation is enhanced gender-disaggregated data collection. Collecting and analysing gender-specific data is essential for understanding the impact of tax policies on men and women. This data could enable more nuanced policy adjustments.

Another one is targeted support for women in the informal sector. Providing targeted tax relief for low-income earners, especially in the informal sector, can foster greater economic participation for women.

Also, there should be a collaboration with gender-focused organisations. Partnering with local and international gender advocacy organisations would improve alignment between IMF policies and Ghana’s broader gender equity goals.

Another area to look at is gender-responsive budgeting. Thus, by allocating resources to address gender disparities, Ghana can promote economic justice and support women’s economic empowerment.

ActionAid also calls for transparency and accountability in tax reforms, with the explanation that openly addressing the gendered impacts of tax reforms promotes accountability and ensures policies align with Ghana’s social equity goals.

Conclusion

ActionAid Ghana’s report highlights a vital issue: without gender-sensitive economic policies, IMF-backed tax reforms risk exacerbating social inequities.

As the IMF and Ghana continue collaborating on economic strategies, prioritising gender equity is crucial. Moving forward, a balanced approach that values macroeconomic stability and social equity is essential for building a fairer, more inclusive economy where both men and women can thrive.
 
 The writers are the PR and Communications Officer and Women’s Rights and Campaign Manager of ActionAid Ghana.