The Minister backed the International Monetary Fund (IMF) bailout disclosing that an IMF team visited Accra from Wednesday, July 6 to Wednesday, July 13 to assess the current situation of the country and concluded that “Ghana is facing a challenging economic and social situation amid an increasingly difficult global environment”.
Mr. Ofori-Atta added that the “fiscal and debt situation” of Ghana has “severely worsened following the COVID-19 pandemic” and “at the same time, investors’ concerns have triggered credit rating downgrades, capital outflows, loss of external market access, and rising domestic borrowing costs”.
“In addition, the global economic shock caused by the war in Ukraine is hitting Ghana at a time when the country is still recovering from the Covid-19 pandemic shock and with limited room for maneuver. These adverse developments have contributed to slowing economic growth, accumulation of unpaid bills, a large exchange rate depreciation, and a surge in inflation,” he further quoted.
However, the Finance Minister asserted that the Akufo-Addo/Bawumia government is “not wavering at all in our resolve to turn this country around. Ours is of a history of turning things around when the country is in crisis”.
He assured that the government will turn things around for the good of the citizenry.
“When the NPP took over the reigns of Government in 2017, we inherited a challenged economy under an IMF programme, which we successfully turned around and exited the programme in 27 months. If the economy was not on track, we would not have been given the all-clear.”
He continued; “That was why by April 2019, satisfied with the stability that we had brought to the economy and the policies that we were implementing to sustain growth, the IMF gave us the all-clear to exit the programme. Ghana’s growth rate had moved up from 3.7% in 2016, the lowest since 1992, to average 7% from 2017 to 2019. We had cut the rate of inflation down by 33% over the same period to 7.9% by the end of 2019, average lending rates had dropped from the 30s to 23.6% and still dropping. Our trade balance was up to $2.3 billion. The cedi remained relatively stable. Indeed, the amount of our total revenues that we used to service our debt had dropped from the 2018 spike of 73% to 58.9% by December 2019.
“We were certainly not out of the woods yet, especially as revenues remained very low and we had been left with billions in arrears to pay, and more bills to pay from numerous contracts that the previous government had signed where we had to pay for electricity that we do not need. Yet, we still found money to fund our own ambitious promises to Ghanaians. We still found the money to bring back or invest more in vital social programmes that had been abandoned by the previous government.”
Ken Ofori-Atta also outlined some transformational policies the government has introduced which he noted Ghana will benefit from in the long term, saying, “we also knew that our economy was still vulnerable to shocks. That was why we set out to introduce transformational policies that in the long term will put Ghana Beyond Aid. Key amongst them are the emphasis in education and vocational training, adding value to our economy through industrialization and digitilisation, investing heavily in roads and railways, and rationalising the power sector”.