By Ernest Addo
Minister For Finance, Ken Ofori-Atta, has announced that thanks to the International Monetary Fund (IMF), the progress Ghana sought to achieve is very much on course; and that the stability the economy was in need of has been achieved.
“We said we have ‘Turned the Corner’ and the major economic indicators such as inflation and exchange rate continue to drop and stabilise, and there is confidence returning in the economy,” he indicated at a joint press conference with the IMF on Staff Level Agreement (SLA) for the first review of the IMF-supported post-covid-19 programme for economic growth on 6 October 2023, in Accra.
According to Ken Ofori-Atta, as part of the stability, GDP Growth has rebounded strongly averaging 3.2% in first two quarters compared to 3.0% in same period in 2022 mainly on the back of growth in services (avg.6.3%) and in Agriculture (avg. 6.2%). The average growth of 3.2 percent for 2023 Q1&Q2 is higher than the 2023 Revised growth target of 1.5 percent.
Citing available data from year-to-date, the minister disclosed that latest Price development in August 2023 indicated a fall in headline inflation, after consecutive upward trends since May 2023.
Headline inflation, he added, dropped to 40.1 percent, from 43.1 percent in July and 42.5 percent in June 2023, respectively. The decline was broad-based, with a stronger easing of food price pressures and the sustained easing of non-food price pressures observed in recent months.
“The Ghana cedi has remained stable from the beginning of the year to date depreciating cumulatively by about 23.5 percent year-to-date compared to a cumulative depreciation of 37.6 percent over the same period in 2022. The cedi has been very stable, especially from February-to-date as the depreciation over that period was only 3.1 percent,” Ken Ofori-Atta intoned.
On the Fiscal front, he expatiated, amongst others, that the primary balance on commitment basis for H1 2023 was a surplus of about GH¢2 billion compared to a target of a deficit of GH¢4 billion, driven in part by strong non-oil domestic revenues and rationalised spending. Non-Oil Public Revenue for the period was GH¢50.1 billion compared to a programme target of GH¢49.8 billion.
Meanwhile, the IMF has praised Ghana’s strong policy and reform commitment under the programme, which is bearing fruit and leading to signs of economic stabilization.
In a report, the IMF noted that Growth in 2023 has proven more resilient than initially envisaged, inflation has declined, the fiscal and external positions have improved, and the exchange rate has stabilized.
According to the IMF, spending has remained within programme limits, and the authorities have significantly expanded social protection programmes to help mitigate the impact of the crisis on the most vulnerable population.
On the revenue side, Ghana has met its non-oil revenue mobilization target. Ambitious structural fiscal reforms are bolstering domestic revenues, improving spending efficiency, strengthening public financial and debt management, and enhancing transparency.
The IMF has urged official creditors to move forward and agree on an appropriate debt treatment for Ghana in line with the financing assurances they provided in May 2023. This is a critical next step to ensure that Ghana can continue to make progress on its economic reform programme.
“Ghana will have access to about US$600 million in financing once the review is approved by IMF Management and formally completed by the IMF Executive Board. To ensure the timely completion of the review, the country needs official creditors to quickly reach an agreement on a debt treatment in line with the financing assurances they provided in May 2023.
“The authorities’ strong policy and reform commitment under the program is bearing fruit, and signs of economic stabilization are emerging. Growth in 2023 has proven more resilient than initially envisaged, inflation has declined, the fiscal and external positions have improved, and the exchange rate has stabilized,” the Fund said
