President Akufo-Addo has stated that Ghana’s Economy is in crisis and there is a need for support from every citizen to ensure that this situation is reversed.
He said it is a reality, and not an exaggeration that the whole world has been taken aback by the speed with which inflation has eaten away people’s incomes.
President Akufo-Addo in a broadcast to the nation on the state of the economy and the way forward, did not mince words about the weight of the global downturn on Ghana’s economy.
”Economies, big and small, have experienced, over this year alone, the highest rise in cost of living over a generation”, the highest rise in government borrowing in over fifty (50) years; the highest rise in inflation for forty (40) years; the steepest depreciation in their currencies to the US dollar over the last thirty (30) years; the fastest peak in interest rates for over twenty (20) years; and the greatest threat of unemployment in peace time; with over a hundred million people being pushed into extreme poverty,” the President posited.
He called for support and collaboration to get Ghana’s economy back on track.
”For us, in Ghana, our reality is that our economy is in great difficulty. The budget drawn for the 2022 fiscal year has been thrown out of gear, disrupting our balance of payments and debt sustainability, and further exposing the structural weaknesses of our economy.”
”We are in a crisis, I do not exaggerate when I say so. I cannot find an example in history when so many malevolent forces have come together at the same time. But, as we have shown in other circumstances, we shall turn this crisis into an opportunity to resolve not just the short-term, urgent problems, but the long-term structural problems that have bedeviled our economy”.
President Akufo-Addo stated that negotiations to secure a strong IMF Programme, to support the Post COVID-19 Programme for Economic Growth and additional funding to support the 2023 Budget and development programme, are all at advanced stages, and on track and should be ready by close of 2022.
”We are determined to secure these arrangements quickly to bring back confidence and relief to Ghanaians. We are working towards reaching a deal with the IMF by the end of the year. This will give further credence to the measures the Government is taking to stabilize and grow the economy, as well as shore up our currency,” the President pointed out.
To restore and sustain debt sustainability, the government plans to reduce the total public debt to GDP ratio to some fifty-five percent (55%) in present value terms by 2028, with the servicing of external debt pegged at not more than eighteen percent (18%) of annual revenue also by 2028.
He disclosed that at the just ended Cabinet Retreat at Peduase Lodge, the government agreed on the framework for the Post COVID-19 Programme for Economic Growth and the IMF support for its implementation, as well as the work being done by the Ministry of Finance in preparation for the 2023 budget.
On the Way Forward:
At the Cabinet Retreat, President Akufo said some firm decisions were arrived at, that should put Ghana back on track out of the current economic difficulties.
Government says it would continue with its revenue collection effort with the Ghana Revenue Authority rolling out extensively, and everyone is expected to come on board to achieve this feat.
”We are committed to improving the revenue collection effort, from the current tax-revenue to GDP ratio of thirteen (13%) to between eighteen and twenty percent (18-20%), to be competitive with our peers in the West Africa Region.”
”The GRA is rolling out an extensive set of measures to support this enhanced revenue mobilisation. All of us must do our patriotic duty, and support the GRA in this exercise,” the President outlined.
”We are aiming to restore and sustain macroeconomic stability within the next three (3) to six (6) years, with a focus on ensuring debt sustainability to promote durable and inclusive growth while protecting the poor,” according to President Akufo-Addo.
He said the government would also review reforms in the energy sector, capping of statutory funds, implementation of the exemptions Act and set a new property rate regime.
Furthemore, the policy of thirty percent (30%) cut in the salaries of political office holders including the President, Vice President, Ministers, Deputy Ministers, MMDCEs, and SOE appointees in 2023, would continue.
Also, the thirty percent (30%) cut in discretionary expenditures of Ministries, Departments and Agencies”, would also be in place going into 2023, all in a bid to salvage Ghana’s economy, according to President Akufo-Addo.