ghananlpcommunity/ghana-gov-speeches-sentences huggingface dataset:
As such, the Bank of Ghana, which manages our reserves is leading the interventions to contain the depreciation of the Cedi.
Government, on its part, is undertaking real sector interventions through initiatives such as 1D1F and the Ghana CARES programme, to accelerate the import substitution of products such as poultry and rice, and promote an export led economy thereby reducing foreign exchange pressures from the imports of those products.
We intend to announce additional measures to promote the consumption of local produce.
Furthermore, the implementation of the AfCFTA positions Ghana as a continental trade hub, and we shall take advantage and boost the export orientation of our industries.
The Ministry of Finance has also arranged significant financing including the US$750 million from Afrexim Bank to support the 2022 Budget and boost our foreign exchange reserves.
This forex inflow has improved the supply of foreign currency and boosted the stability of the local currency.
We continue to explore avenues to secure additional financing to boost the reserve position.
On the issue of “Alarming incompetence and frightening ineptitude resulting in the collapse of the Ghanaian economy and an excruciating cost of living crisis” I state as follows: Hon Co-Chairs, these are very strong language.
The choice of words for this part of the motion is worrying, especially as it relates to the functioning of the whole national economy.
The truth is, considerable progress has been made under my tenure as Minister for Finance.
Since 2017, we have competently managed the economy.
Co-Chairs, we have competently managed the economy since 2017.
Indeed, to appreciate where we are now, we need to look back at where we came from.
At the close of 2016, an assessment of the Economy revealed: limited fiscal space (fiscal deficit 6.5%); a distressed financial sector (NPL ratio-17.3%); an asset quality review document which had not been released; a derailed IMF-ECF programme and reduced economic output (GDP growth-3.4%); Inflation was 15.4% at the end of 2016; Monetary Policy rate (interest rate) was 25.5% at the end of December 2016; Limited CAPEX to MDAs; and ‘Dumsor’ which had decimated local industry and strongly impeded national productivity.
Co-Chairs, it is important to note that through our leadership and commitment to turn around the economy from its state in 2016, we made great strides and remarkable progress in the years before the pandemic and the records attest to this.
The headline facts are: We doubled economic growth in our first three years, and Ghana’s growth in 2019 was touted as one of the highest globally; Inflation came down significantly from 15.4% to 7.9% at the end of 2019 and remained in single digits till the pandemic hit in March 2020; The fiscal deficit which was about 6.5% was brought down to under 5 percent by the end of 2019; Exchange rate depreciation reduced significantly to under [5 percent] in 2017 and averaging [8.7 percent} between 2017 and 2019; We reduced interest rates in line with declining inflation expectations.
Monetary Policy Rate declined from 25.5% at the end of December 2016 to 16% at the end of 2019 while the average lending rate for the same period declined from 31.70% to 23.7%; The government directly spent GH¢25 billion to save the banking and SDI sector, protecting the near collapse of the financial sector; saving close to 5,400 direct jobs and 12,000 indirect jobs; making sure 4.6 million depositors were protected; and Government also implemented comprehensive reforms across the energy sector and kept the lights on to-date.
On the back of good economic management, in April 2019, Ghana successfully completed and exited the IMF-ECF programme that we inherited.
To ensure irreversibility of the macroeconomic gains, Government introduced a number of measures including: passage of the Fiscal Responsibility Act, 2018 (Act 982) to cap the fiscal deficit at 5% of GDP and ensure maintenance of positive primary balance; passage of the Public Financial Management Regulations, 2019 (LI 2378) to strengthen regulation of the Public Financial Management System; and establishment of the two Social Partnership Programmes with Labour and Faith-Based Organisations.
Clearly, there was strong momentum and optimism towards Ghana Beyond Aid agenda at the end of 2019.
However, with the onset of the pandemic, the gains from over three years of fiscal rectitude were reversed as result of efforts to ensure lives and livelihoods were protected.
Ultimately, these considerations informed the raft of revenue and expenditure measures outlined in the 2022 Budget Statement.
We laid out the 2022 Budget to achieve Fiscal Consolidation anchored on debt sustainability.
It is important at this point, to also highlight that a key component of the national debt stock related to three (3) exceptional expenditure items that are neither external nor a creation of this Government: Energy Sector Excess Capacity payments (GHC 17 billion), which relate to a legacy of take or pay contracts that saddled the country’s economy with annual excess capacity charges of close to US$1 billion; Direct COVID-19 expenditure amounted to GHC 12.0 billion; and the Banking Sector Clean up (GHC 25 billion).
These three items alone, contribute to about 23% of our annual debt servicing cost.
These three items were not created through the recklessness of the New Patriotic Party.
The long dumsor that Ghanaians endured under the NDC administration between 2012 and 2016 was more to do with the NDC government’s inability to pay for power.
So, Co-Chairs, I find it curious that Hon.
Ato Forson will choose to cite energy bills as an example of the recklessness that the Minority charges me with and seek my removal by censure.
Especially when we have had to pay around $500 million dollars a year in excess capacity charges, for power the previous administration negotiated that we do not need and we do not use.
Hon Co-Chairs, in actual fact, we have been able to renegotiate some of these power purchase agreements and the new agreements with the Priority IPPs, once finalized and executed will offer estimated nominal savings of more than USD 4 billion over the next 5 years.
We have also used a significant part of the borrowing to undertake key transformative investments such as: The fixing constructing of over eleven thousand, five hundred (11,500) kilometres of new roads between 2017 and 2021; The construction of 12 major interchanges since 2017 as compared to 5 interchanges in the previous 8 years.
the construction of the Eastern Regional and Central Gonja Hospitals; Commencing work on eighty-seven (87) of the Agenda 111 projects; funding on-going airport projects, including the Kumasi International Airport; and promoting the establishment of the Development Bank Ghana to provide competitive finance for Ghanaian Entrepreneurs.
Indeed, the E-Levy was borne out of this heightened need to mobilize resources sufficient for managing the pre-eminent challenges of our time: fiscal consolidation, debt sustainability, and reducing youth unemployment.
Unfortunately, the delay in the passage of the E-levy adversely impacted market confidence and largely contributed to the downgrade in Ghana’s sovereign credit ratings in January 2022 and these resulted to a whole deterioration of the financial conditions for Ghana and closed Ghana’s access to the international capital markets (ICM) due to Deteriorated perception and loss of confidence by investors.
For this reason, access to ICM funds was no longer available which resulted in a severe BOP problem that needs to be addressed.
The Government thus resorted to the IMF as a lender of last resort to not only address the immediate and active BOP need but also to protect all the macro and social policy gains made in the last 5 years.
Undoubtedly, the last few months have seen considerable economic uncertainty and challenges.
These have been characterized by high of inflation levels and rapid depreciation of the cedi.
Indeed, the economic challenges we are facing require deliberate but urgent, well thought out, strategic steps as well as the support of the Ghanaian people.
The above notwithstanding, there are still some bright spots.
Overall, our growth outturn of 3.4% and 4.8% in Q1 and Q2 2022 respectively, coupled with modest improvements in our fiscal position suggests our economy is gradually on the upswing despite the numerous shocks we have faced over the past two years.
This progress gives us a solid foundation to confront the challenges in front of us.
Undoubtedly, risks remain that we are highly attuned to; however, the Ministry of Finance is committed to working alongside all stakeholders, including the members of Parliament to ensure we can reposition our economy back on a path of growth and prosperity.
There is a claim of “Gross mismanagement of the Ghanaian economy, which has occasioned untold and unprecedented hardship”.
I want to re-state that: Hon Co-Chairs, the current economic challenges we are experiencing in Ghana is not the outcome of mismanagement.
But we acknowledge the hardships our people are going through in these difficult times.
This assessment is wholly shared by objective observers.
In the recent words of the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva and I quote: “ to the people of Ghana , like everybody else on this planet, you have been hurt by exogenous shocks.
First the Pandemic, then Russia’s War in Ukraine and what we need to realise is not because of bad policies in the country but because of these combination of shocks...” I have already discussed the domestic triggers behind the depreciating Cedi.
We simply cannot overlook the significant impact of the delayed passage of the revenue measures outlined in the 2022 Budget, which resulted in negative market reactions, credit rating downgrades, the narrowing of financing sources, and the eventual depreciation of the cedi.
The timelines are obvious and cannot be ignored.
Going forward Hon.
Co-Chairs, it is time to have an honest national conversation on the patterns of expenditure as a people.
Our preference for imported goods, which requires foreign exchange that we do not earn enough of, implies that our cedi will continue to be under pressure It has become clear that we cannot continue in a business-as-usual mode.
We have to significantly change our consumption patterns and support investments in local capacity for production and export.
Co-Chairs, even in these challenging times, we have not been rudderless.
We have prepared the Post-COVID-19 Programme for Economic Growth (PC-PEG) as the domestic blueprint, which has benefitted from input from all key stakeholders including Civil Society Organizations (CSOs), social partners (labour unions, employers, and FBOs), academia, industry professionals, and the leadership of Parliament.
This document contains a set of time-bound structural reforms and fiscal consolidation measures to place our debt levels and fiscal accounts on a sustainable path over the medium term and has underpinned Government’s engagement with the IMF.
The negotiation with the IMF is progressing steadily and well and we are working assiduously to achieve a Staff-Level Agreement (SLA) by end of December 2022.
As the President announced recently, Government is aggressively pursuing initiatives that will structurally boost the export orientation of this economy.
In the coming 2023 Budget, and following consultations with key stakeholders, including AGI, Labour and the trading community, we expect to announce critical measures in this regard.
This will complement that on- going private sector-led interventions being promoted under the 1D1F and the GhanaCARES programme.
However, the world had no playbook to help us tackle the Covid-19 pandemic.
Parts of the Ghanaian economy were shut- down, including hotels, restaurants, and events.
Our efforts were further destabilised by the disturbances in the global supply chain.
But even in those times, we provided electricity and water-free, grants and loans to businesses in the formal and in formal sectors.
We also paid our workers even when some were home for 9 months and did not lay off anyone.
No country has been saved from the disruptions in supply chains, and record hikes in prices of energy, food and commodities.
Every economy is facing macro-fiscal challenges, rises in public debt levels and narrowing fiscal space.
Our situation was not helped by a combination of historic weaknesses in the structure of our import-dependent economy and our low capacity, even as compared to our neighbours, in raising domestic revenues.
The 2023 Budget will contain policies directly aimed at tackling these vulnerabilities.
Co-Chairs, I am aware of the enormity of the challenges we face.
I am aware that lives and livelihoods needs to be protected.
We have a well-consulted plan and the commitment to address this economic challenge.
The Ministry of Finance and I have been working so hard 24/7 to quickly restore market confidence and ensure economic growth.
We are nearly through with the IMF negotiations.
I am confident that once we conclude our debt sustainability programme and secure a Fund programme, the nation will next year see the stability and fiscal space that can spur us back on to a sustainable economic recovery and growth, which should endure considering on the investments we have made in all sectors.
Concluding remarks Co-Chairs, as a child, I was taught a hymn that has guided me throughout my life: Land of our birth, we pledge to thee our love and toil in the years to be, when we are grown and take our place as men and women with our race.
Land of our birth, our faith, our pride, for whose dear sake our fathers died; O Motherland, we pledge to thee head, heart and hand through the years to be.
Inspired by the words of this hymn, Hon.
Co-Chairs, when I assumed the position of Minister of Finance, I resolved to serve the people of Ghana with my all.
Under my tenure as Minister of Finance, I have overseen some great strides in the development of Ghana and the improvement of the lives of the Ghanaian people.
As a nation, we are being tested.
Our circumstances require a united and concerted response to the crisis.
I implore our chiefs, elders and churches to take the mantle and speak a common language.
Let us all work as one country to support labour negotiations, find a solution to the impasse in Parliament and rise above witch-hunting and entrapment.
These are not ennobling and progressive for a society seeking transformation.
Hon Co-Chairs, Ghana is a resilient country.
Ghana has faced economic challenges since independence.
Ghana has always come through each of them stronger and better than before.
God willing, we shall come out of these difficult times too.
Ghana, will, and must rise again!!
Thank you, co-chairs.
Appreciation I will like to first of all thank the almighty God for providing the needed guidance to the GoG and the Fund to get us where we are today.
I will also like thank HE the President for his leadership and direction throughout this period; iii.
Let me also express appreciation to the IMF in general and in particular the IMF MD and management, Stephane Roudet, IMF Mission Chief to Ghana and Leo Medina, and the indomitable spirit of the team for their commitment to Ghana during these challenging times; iv.
In addition, I will like to express appreciation to key stakeholders including Cabinet, Parliament, FBOs, CSOs, and members of Academia, for their invaluable contributions to the preparation of the Post-Covid-19 Programme for Economic Growth (PC-PEG) which has underpinned the IMF Programme negotiations; and v. Last but not the least I will like to express my sincere appreciation to the staff of MoF and BoG’s leadership under Governor Addison and the trusted Deputies for their hard work and sacrifices throughout this entire process.
Context i. A lot of work has gone on behind the scenes for almost 6 months when Government formally announced its intention to engage the IMF for an IMF-supported programme, to enable us reach this Staff Level Agreement (SLA) today which paves the way for the IMF’s Management and Executive Board to approve Ghana’s programme request early next year.
Since the announcement on 1st July, 2022 to formally engage the IMF for an IMF-supported Programme, there have been three rounds of negotiations with the IMF interspersed with a number of virtual meetings in-between to ensure both the GoG and the IMF teams work around the clock to get the SLA by end Dec 2022. iii.
Against the backdrop of Staff Programmes, Ghana is indeed blessed to conclude our SLA within 5 months.
This is historic in recent times relative to what we witnessed with Zambia, Chad and Ethiopia.
The IMF Programme i. The GoG and the IMF teams have worked tirelessly to agree on key aspects of the IMF Programme at the Staff Level.
Key deliverables over the period include: a) Preparation of the Post-Covid-19 Programme for Economic Growth (PC-PEG); b) A Medium-term macroeconomic framework; c) Debt Sustainability Analysis (DSA) and Debt Management Strategy; d) Structural reforms to address structural bottlenecks, improve competitiveness and promote efficiency and effectiveness; e) A Memorandum of Economic and Financial Policies (MEFP); and f) An Agreement on Prior Actions which are expected to be completed before the Fund goes to the Board.
Ghana stands ready to complete all Prior Actions before the end-March 2023 but more importantly, Ghana is committed to the IMF Programme as a whole.
The SLA is only one aspect of the approval process.
More is yet to be done to secure IMF Management and Board approval.
That notwithstanding: i. Key fiscal measures, structural reforms, and the medium-term macro-fiscal framework in the 2023 Budget are aligned with the IMF-supported Programme.
It is therefore crucial that we receive support from all stakeholders including: a) Parliament to ensure that the 2023 budget including all revenue measures are passed; and b) Creditors to ensure a successful debt operation Truly, the eventual conclusion of the program will assist us in our efforts to restore stability, tackle inflation, and strengthen our currency.
That is why the various ingredients of the program should be supported by all Ghanaians and all stakeholders.
We can only get to the IMF Board if we get sufficient commitment from our creditors in support of the debt operation.
i. The 2023 Budget is anchored on increasing domestic revenue mobilization effort by 1.2 percentage points of GDP.
On the expenditure side, the 2023 Budget proposes to reduce expenditures (on commitment basis) by about 2 percentage points of GDP from 2022 to 2023.
Primary expenditures are expected to be reduced through a reduction in allocation on the Use of Good and Services and Domestically Financed Captial expenditure on a commitment basis.
These fiscal adjustments alone are not enough to address the country's economic challenges, hence the ongoing debt restructuring aimed at restoring debt sustainability in the medium-term.
The 2023 Budget contains important social protection measures to support the most vulnerable including measures that seek to gradually increase the number of beneficiary households as well as the value cash transfers under the LEAP.
Other social protection programmes which will be prioritised under the programmes include the NHIS, the Capitation Grant, and the School Feeding Programme.
Concluding Remarks iv.
We are optimistic that the 2023 Budget adjustment strikes the right balance between determination and pragmatism.
v. Already, the economy is responding positively to the news of GoG and the IMF reaching an SLA and we are eager to leverage this momentum to the very moment when the IMF Executive Board approves the Programme request.
We are already seeing significant improvements in the exchange rate with the Ghana cedi recovering against major currencies.
We hope that Ghanaians will continue to support all efforts to restore macroeconomic stability and promote robust and inclusive growth.
We are confident as a resilient people, and we shall rally to support this great enterprise, to restore macroeconomic stability and promote robust and inclusive growth.
The world is looking at us, and I know we can do it.
To God indeed be the glory for the great thing he hath done within 5 months.
I am certain that God who began the good work will continue until it is finally finished - Greater things He will do.
For we shall gather the harvest with joy.
These indeed are both times for a Joseph recovery and a Nehemiah rebuilding x. Let us continue with courage, the spirit of love for each other and self-discipline to go through this together.
Thank you and God Bless.
Chief Director, Directors, Special Advisors and Staff of the Ministry; Distinguish ladies and gentlemen of the Media; Good Morning, and welcome to the 4th Press Briefing on the Economy this year.
These bi-monthly engagements have complimented the statutory update we provided on the Economy when we presented the 2022 Mid-Year Budget Review to Parliament on 25th July 2022.
Specifically, inflation remains high at 33.9% (August 2022), and the cedi has depreciated by 37.1% against the US Dollar as at 27 th September 2022.
We haven’t seen anything like this since August 2001 when the inflation rate hit 33.9% Ladies & Gentlemen, we are at an important moment in our economic history; and in the context of today’s briefing, it is important to focus on the progress being made to put us firmly on a path of macroeconomic stability.
In addition, we announced a number of expenditure measures to keep public spending in line with our tightening economic conditions including restraints on the purchase of new vehicles and a moratorium on non-statutory travel.
As part of measures to shore up our reserves, improve exchange rate stability and address some of the funding needs, the Ministry successfully worked on a $750 million Afreximbank loan facility which was received in August 2022.
So far, provisional fiscal developments for Jan-July 2022, presented within the context of the 2022 Budget revised deficit target of 6.6% of GDP and a primary balance of 0.4% of GDP show 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); and 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); to the operationalisation of expenditure, cuts announced since March.
We are on course with expenditure rationalisation efforts, and will continue to enforce strict adherence to these measures across all MDAs while ensuring efficient delivery of public services.
The Ghana Revenue Authority has intensified its efforts to shore up domestic revenue mobilisation, particularly in relation to the enforcement of compliance measures.
Of course, heightened tax compliance and increased tax-audit exercises will continue to be complemented by policy initiatives that allow us to tap into a wider pool of taxpayers in the years ahead.
Within this context, government is finalising its Post-COVID-19 economic programme as the domestic blueprint to engage the IMF.
Additional stakeholder engagements will be held to solicit further inputs for the programme.
Our economic programme contains a set of time-bound structural reforms and fiscal consolidation measures to place our debt levels and fiscal accounts on a sustainable path over the medium term.
The programme is hinged on seven (7) pillars, namely: Debt Sustainability; Fiscal Consolidation; Strengthening Monetary and Exchange Rate Policies Building Strong Financial Institutions; Macro-Critical Structural Reforms; Maintaining Peace and Security; and Economic Growth and Transformation.
IMF NEGOTIATIONS The formal negotiations for a Fund-supported programme began on Monday, September 26th, 2022 and discussions are advancing smoothly.