In spite of recent devastating shocks, the economy of Ghana, according to Minister of Finance Ken Ofori-Atta, is growing only a little.
“Overall, our growth outturn of 3.4% and 4.8% in Q1 and Q2 of 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,” he said at a press briefing on Wednesday.
“These figures demonstrate that in spite of recent challenges, there has been economic growth, modest as the gains so far may be,” the Finance Minister added.
Mr. Ofori-Atta said this progress gives Ghana a solid foundation to confront its economic challenges head-on.
“Undoubtedly, global risks remain on the horizon, including a strengthening US dollar and higher interest rates which negatively affect external borrowing. This development is exerting enormous pressure on our Balance of Payment position, and thus the need for us to expedite our engagement with the IMF.”
Ghana is currently seeking a $3 billion bailout programme from the International Monetary Fund (IMF).
Ghana was compelled to seek IMF support because of the worsening debt stock, fiscal challenges, depreciation of the cedi, upsurge in inflation, as well as shocks from COVID-19 and the Russia-Ukraine war.
Mr. Ofori-Atta told the press that the Ghana Revenue Authority has intensified its efforts to shore up domestic revenue mobilization, particularly in relation to the enforcement of compliance measures, in a bid to resolve the country’s fiscal challenges.
“The increased visibility of GRA officials at shopping malls and various commercial establishments and at our borders across the country is in pursuit of meeting our revenue objectives.”
Cedi depreciation
With regard to the cedi which has depreciated by 37.1% against the US Dollar as of Tuesday, September 27, 2022, Ofori-Atta said the government has put efforts in place to arrest the free fall of the currency.
He further indicated that the Bank of Ghana has introduced enhanced measures such as a Special Foreign exchange auction for bulk distribution companies and a Gold Purchase Programme to contain the depreciation of the cedi.
“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 US$750 million Afreximbank loan facility which was received in August 2022. The traditional Cocoa Syndication Loan, expected in the last quarter of 2022 which will promote the cocoa sector, will further help us build our FX reserves and provide a strong buffer for the cedi in the last quarter of the year.”
“Additionally, the Bank of Ghana has introduced enhanced measures such as a Special Foreign exchange auction for bulk distribution companies and a Gold Purchase Programme to contain the depreciation of the cedi, which is now slowing down,” he added.