The current economic state
of Ghana is gloomy, Finance Minister, Ken Ofori-Atta has admitted in his
mid-year budget read by him at Parliament on Monday, July 25, 2022.
The Minister backed the International Monetary Fund (IMF) bailout disclosing
that an IMF team visited Accra from Wednesday, July 6 to Wednesday, July 13 to
assess the current situation of the country and concluded that “Ghana is facing a challenging economic and
social situation amid an increasingly difficult global environment".
Mr. Ofori-Atta added that the "fiscal and debt
situation" of Ghana has "severely worsened following the COVID-19
pandemic" and "at the same time, investors’ concerns
have triggered credit rating downgrades, capital outflows, loss of external
market access, and rising domestic borrowing costs".
“In addition, the global economic shock caused
by the war in Ukraine is hitting Ghana at a time when the country is still
recovering from the Covid-19 pandemic shock and with limited room for maneuver.
These adverse developments have contributed to slowing economic growth,
accumulation of unpaid bills, a large exchange rate depreciation, and a surge
in inflation,” he further
quoted.
However, the Finance Minister asserted that the Akufo-Addo/Bawumia government is "not wavering at all in our resolve
to turn this country around. Ours is of a history of turning things around when
the country is in crisis".
He assured that the government will turn things around for the good of the
citizenry.
"When the NPP took over the reigns of Government
in 2017, we inherited a challenged economy under an IMF programme, which we
successfully turned around and exited the programme in 27 months. If the
economy was not on track, we would not have been given the all-clear."
He continued; "That was why by April 2019, satisfied
with the stability that we had brought to the economy and the policies that we
were implementing to sustain growth, the IMF gave us the all-clear to exit the
programme. Ghana’s growth rate had moved up from 3.7% in 2016, the lowest since
1992, to average 7% from 2017 to 2019. We had cut the rate of inflation down by
33% over the same period to 7.9% by the end of 2019, average lending rates had
dropped from the 30s to 23.6% and still dropping. Our trade balance was up to
$2.3 billion. The cedi remained relatively stable. Indeed, the amount of our
total revenues that we used to service our debt had dropped from the 2018 spike
of 73% to 58.9% by December 2019.
"We were certainly not out of the woods
yet, especially as revenues remained very low and we had been left with
billions in arrears to pay, and more bills to pay from numerous contracts that
the previous government had signed where we had to pay for electricity that we
do not need. Yet, we still found money to fund our own ambitious promises to
Ghanaians. We still found the money to bring back or invest more in vital
social programmes that had been abandoned by the previous government."
Ken Ofori-Atta also outlined some transformational policies the government has
introduced which he noted Ghana will benefit from in the long term, saying, "we also knew that our economy was still
vulnerable to shocks. That was why we set out to introduce transformational
policies that in the long term will put Ghana Beyond Aid. Key amongst them are
the emphasis in education and vocational training, adding value to our economy
through industrialization and digitilisation, investing heavily in roads and
railways, and rationalising the power sector".
Source: Peacefmonline.com/Ghana