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Support Ghana’s structural reforms- Ofori-Atta

The Minister of Finance, Ken Ofori-Atta, has urged a unified and collaborative approach to ensure the successful implementation of economic reforms aimed at rebuilding the country from the ravages of the COVID-19 pandemic and the geopolitical tension between Russia and Ukraine.

Addressing journalists in Accra on Ghana’s International Monetary (IMF) Programme and Growth Agenda on Sunday, June 8, 2023, Mr. Ofori-Atta highlighted the progress made in implementing the economic reforms outlined in the Post-Covid Programme for Economic Growth (PC-PEG) stressing the need to continue the momentum for sustained growth and development.

“Securing the IMF program is not an end to our current challenges. It has only paved the way for the implementation of an ambitious and well thought out program of reform for our economy and country. In fact, the real work of adjustments, re-alignments, and the return to a path of steady economic growth has just begun. Let us brace ourselves for needed reforms and rebuild the Republic,” he said.

Reasons

He outlined the reasons behind Ghana’s decision to seek assistance from the IMF recounting the rising public debt level, worsening financing conditions, high inflation, deteriorating exchange rates, and Balance of Payment (BOP) pressures that necessitated the support from the Bretton Woods institution to restore macroeconomic stability and debt sustainability.

He said the bailout programme has had an immediate impact on Ghana’s fiscals citing the positive outcomes in various economic indicators. “Inflation has decelerated to 42.2% by the end of May 2023, down from 54.1% at the end of December 2022. The cedi’s depreciation has largely stabilized, and the 91-Day T-Bill rate has declined. Gross International Reserves have improved, and the current account balance has turned positive,” he explained.

He emphasized that Ghana’s recovery programme is built on clear targets and strong policy and structural measures of which over the medium term, it seeks to promote a credible fiscal consolidation programme, anchored by strong domestic revenue mobilization and high spending efficiency.

He said as a result, government is targeting a primary surplus on a commitment basis of 1.5 per cent of Gross Domestic Product (GDP) by 2025 through to 2028; firmly anchor inflation expectations and preserve financial stability and restore public debt to sustainable levels by 2028 by observing the two binding constraints of Public Debt (in present value terms) to GDP ratio of 55 per cent or less and an External Debt Service to Revenue ratio of 18 per cent or less.

He said government through its reform agenda is looking to enhance economic competitiveness, with exports surpassing 37 per cent of GDP in the medium-term, safeguarding social protection and enhancing targeting to ensure effectiveness of key interventions and minimizing fiscal risks, including from State Owned Enterprises (SOEs) and deepening Structural Reforms in targeted sectors such as Energy and Cocoa.

Collaboration

He pointed out that despite the progress made, the success of Ghana’s economic recovery as pointed out in the PC-PEG programme hinges on the commitment and dedication of every citizen. He called for unity, collaboration, and a collective sense of purpose to navigate the challenges ahead.

Mr. Ofori-Atta emphasized that the IMF programme serves as a crucial foundation for Ghana’s economic stability and growth. The programme provides support in terms of financing and access to additional resources, which are vital for implementing the necessary reforms.

“While we have made notable progress in our economic recovery, we must remain focused and unwavering in our commitment to reform. This is not a task for the government alone; it requires the active participation of every Ghanaian,” Ofori-Atta emphasized.

The Finance Minister acknowledged the resilience and determination of the Ghanaian people in the face of economic challenges. He expressed his confidence in their ability to collectively rebuild the Republic through the successful implementation of the economic reforms.

This, Mr. Ofori-Atta called on all Ghanaians to join hands and work together to ensure the effective execution of the reforms. He reiterated that by embracing the necessary changes and reforms, Ghana can create a solid foundation for sustainable economic growth and a brighter future

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