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
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I do not know how the NDC can convince Ghanaians to believe that they have what it takes to transform the economy from the export-orientated raw material-based colonial economy. Ghanaians have come to value the NPP's concerted efforts to transform the Guggisberg exploitive economic order, as outlined in policies such as 1D1F, planting for food, construction of railways, and FHS. The NDC should therefore give us a break and stop pulling our legs for its failed and incompetent policies. Ken Ofori-Ata is one of the best finance ministers Ghana has ever had. He can comfortably account for the numerous infrastructure developments taking place currently by pointing his fingers at them.
Mr. Minister, who does the borrowing?????????
Sir we appreciate your candid assessment of the state of the economy as at now. Also we understand all the challenges you inherited plus the effects of the pandemic and the Ukraine- Russia war. However Sir , We think some of your own decisions have not been great as well even though well intentioned. 1. The size of your government is too big . Ghana as a nation does need more the 40 ministers in total. We waste too much resources on governance cost. The result we have now does not justify the number of ministers in government. 2. The implementation of your policies have not been the best costing so much money unnecessarily. For example Free SHS should have been implemented a year after you took over . You guys were too hasty and did not think through implementation well. A simple process of asking people who need Free SHS to apply would have saved the country a lot . Free feeding should have been part of the package. Parents should responsible for feeding their kids at least. 3. The one village one dam project was not implemented well though a great idea. Planting for food and jobs also the same. we were not thorough enough with our agriculture policy. too much publicity yet nothing substantial to show for. 4. Revenue mobilisation effort extremely poor even though year in year out we sing the same song of not generating enough revenue. 5. Still stuck with raw export of our commodities and not done enough to refine our cocoa and gold that we produce to take advantage of value chain benefits. As at now the country does not have one big decent cocoa refinery and gold refinery factory to add value to these two main commodities that we so rely on