Minister of State at the Finance Ministry, Abena Osei Asare, has assured the people of Ghana that the government will in the third and fourth quarter of the year 2024, implement stringent fiscal policies that will ensure the reduction of the country’s deficit.
Ghana’s fiscal deficit to Gross Domestic Product (GDP) ratio is expected to narrow to 4.5% ± 50 basis points in 2024, according to research by Databank. This projection is largely due to interest savings from the external debt restructuring.
The Bank of Ghana put the country’s fiscal deficit to 2.5% of GDP as of September 2023. In its 2024 Quarterly Report, the research firm said potential interest savings from the external debt restructuring could improve fiscal balance.
The government budgeted GH¢19.04 billion towards the external interest payment despite halting debt service with the now-concluded negotiations with the various creditor groups.
Addressing guests and attendees at the maiden edition of the “Quarterly Economic Roundtable” organised jointly by the Ministry of Finance (MoF), the University of Ghana (UoG), and the University of Ghana Business School (UGBS) held on Tuesday, 2 July 2024 at the ISSER hall under the theme; “Restoring Macroeconomic Stability,” Abena Osei Asare said the government will not over fiscal discipline even though it is an election year.
“The foundation of microeconomic stability is fiscal discipline. We (the government) are committed to implementing stringent fiscal policies to reduce deficits and manage public debts sustainably. We are also committed to transparency in public finance management, fully implementing the PFM Act and enhancing accountability mechanisms to ensure the efficient and effective use of public funds.
“There is always a high demand in election years for the government to overspend and we are committed to rationalising and containing expenditures especially in the third and fourth quarters to ensure that unbudgeted related expenditures are kept to the barest minimum or eliminated,” Ms Abena Osei Asare remarked.
In her address, Ms Osei Asare observed that there are several measures that the Bank of Ghana is implementing to control inflation to improve the purchasing power of Ghanaians.
She further indicated that various other interventions of government are yielding fruits and they will be pursued vigorously in the third and fourth quarters to consolidate the gains made.
The private sector according to Ms Osei Asare is a vital factor in the country’s quest to reduce its susceptibility to external pressures and everything will be done to improve same.
“Controlling inflation is critical for the purchasing power of Ghanaians and the Bank of Ghana continues to pursue critical measures to deal with this, the minister of state at the finance ministry, Abena Osei Abena said.
“To reduce our vulnerability to external shocks, the government has continued to encourage private investment in key sectors such as agriculture, manufacturing, and technology through its flagship programmes such as the Planting for Food and Jobs (PFJ), One District, One Factory (1D1F), among others,” she further stated.
“It is by fostering industrialization that we can create jobs, boost exports, and enhance our economic resilience,” Ms Abena Osei Asare added in her keynote address at the Quarterly Economic Roundtable.
Economist and country director for the International Growth Centre (IGC-Ghana), Dr Nii Kwaku Sowa, welcomed the decision of the Ministry of Finance and the University of Ghana to host the “Quarterly Economic Roundtable.”
Dr Nii Kwaku Sowa in his presentation indicated that as an economist he has often heard calls for expenditure cuts from both economists and politicians in the country.
However, in a country where the biggest expenditure of the government is on salaries, he is wondering whose salary would be cut should the government heed these calls for a cut in its expenditure.
In anticipation of this month’s mid-year budget review in parliament, the head of the University of Ghana’s Economics Department, Professor William Baah Boateng, is urged the government to adopt more cautious spending practices to reduce pressure on the budget.
Professor Baah Boateng emphasised the need for the government to check excessive expenditures to better align with the country’s financial requirements. He also urged the government to reassess its achievement of revenue targets in order to better meet the financial needs of the country.
