Accra, Wednesday 28th September, 2022 -The Minister for Finance, Hon. Ken Ofori-Atta, has disclosed that government is finalizing its post Covid-19 economic recovery programme as the domestic blueprint to engage the International Monetary Fund (IMF).
“Our economic programme contains a set of time-bound structural reforms and fiscal consolidation measures to place debt levels and fiscal accounts on a sustainable path over the medium term” he said.
Briefing the media on the state of Ghana’s economy and the ongoing IMF negotiations, Mr. Ofori-Atta disclosed that the blueprint covered debt sustainability, fiscal consolidation, monetary and exchange rate policies, building strong financial institutions, macro-critical structural reforms, maintaining peace and security and economic growth transformation.
Though the programme has already benefitted from inputs from key stakeholders including CSOs, social partners, academia, Parliament etc., more stakeholder engagements would be held to solicit for further inputs, the Minister added.
On the IMF negotiations, he disclosed that no agreement had been reached with the Fund on the proposed programme as well as the parameters of any debt operations.
He stressed that these are all depended on the debt sustainability analysis results adding that the team was in the process of completing the debt sustainability analysis.
The Minister said the Government Team was working with the IMF Team to update the medium-term macro-fiscal framework to inform the Fund’s programme design. “Government is committed to ensuring that a comprehensive package is negotiated with the aim of restoring and sustaining macroeconomic stability, ensuring durable and inclusive growth and promoting social protection,” Mr. Ofori-Atta said.
He gave the assurance that government shall continue to actively engage all stakeholders in a clear and transparent manner to fast-track the IMF negotiation process.
On the economy, Mr. Ofori-Atta noted that the Ghanaian economy had seen considerable economic uncertainty - a manifestation of global development, which is now being described as the worst global cost of living crisis in 50 years.
He said inflation remained high at 33.9% (August 2022), with the cedi depreciating by 37.1% against the US Dollar as of September 27, 2022. Provisional fiscal developments for Jan-July 2022, showed that the overall fiscal deficit amounted to GH¢31.1 billion (5.3% of GDP), against a target of GH¢31.2 billion (5.3% of GDP).
Also, the corresponding primary balance for the period was a deficit of GH 7.6 billion (1.3% of GDP), against a deficit target of GH¢7.8 billion (1.3% of GDP).
Mr. Ofori-Atta said the priority for Government since the COVID-19 episode and the Russia-Ukraine war has been to address macro stability and welfare challenges that confronted the economy.
To this end, the Government, since the first quarter of has cut discretionary expenditures in the budget by 30%, in addition to other expenditure measures including restraints on the purchase of new vehicles and a moratorium on non-statutory travel.
The US$750 million Afreximbank loan facility which was received in August 2022 and the traditional Cocoa Syndication Loan, expected in the last quarter of 2022, the Minister said would help improve exchange rate stability and build the forex reserves for a strong buffer for the cedi in the last quarter of the year.
With growth outturn of 3.4% and 4.8% in Q1 and Q2 of 2022 respectively, coupled with modest improvements in the fiscal position, the Minister noted that the economy is gradually on the upswing despite the numerous shocks faced over the past two years.
“I am extremely confident about where we will land on this journey. We as a country have survived a 142 percent inflation, yellow-corn hysteria, mass exodus from our country and more recently a successful exit from the 2015 Extended Credit Facility,” he further stated.
The Minister called for a concerted national effort to overcome the current hurdles facing the country, adding that those challenges would soon be over.
“I remind each and every one that Ghana is the only place we have. Its progress and prosperity are our collective duty. We have overcome many challenges and risen to the occasion many times. This is another challenge which we must overcome. This too shall pass if we remain united and purposeful,” he stated. END