Government has introduced a new set of macroeconomic and spending guidelines aimed at fixing Ghana’s economic meltdown.
These measures, adopted at the recently held cabinet retreat according to President Nana Addo Dankwa Akufo-Addo are aimed at reviving the economy for at least the next three to six years as part of a framework for the country’s post-COVID-19 programme for economic growth and the IMF support for its implementation and the Ministry of Finance in preparation for the 2023 budget.
Speaking in his national address on Sunday, October 30, 2022, the President said:
“We are aiming to restore and sustain macroeconomic stability within the next three to six years, with a focus on ensuring debt sustainability to promote durable and inclusive growth while protecting the poor.”
1. To restore and sustain debt sustainability, we plan to reduce our total public debt to GDP ratio to some 55 in present value terms by 2028, with the servicing of our external debt pegged at not more than eighteen percent (18%) of our annual revenue also by 2028.
2. 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.
3. We have decided to review the reforms in the energy sector, capping of statutory funds, implementation of the exemptions Act and a new property rate regime.
4. We have decided also to continue with 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, just as we will continue with the thirty percent (30%) cut in discretionary expenditures of Ministries, Departments and Agencies.
5. We will review the standards required for imports into the country, prioritise the imports, as well as review the management of our foreign exchange reserves, in relation to imports of products such as rice, poultry, vegetable oil, tooth picks, pasta, fruit juice, bottled water and ceramic tiles, and others which, with intensified government support and that of the banking sector, can be manufactured and produced in sufficient quantities in Ghana. Government will, in May 2023, that is six (6) months from now, review the situation.
6. We must, as a matter of urgent national security, reduce our dependence on imported goods, and enhance our self-reliance, as demanded by our overarching goal of creating a Ghana Beyond Aid. Much as we believe in free trade, we must work to ensure that the majority of goods in our shops and market places are those we produce and grow here in Ghana.
7. Support to farmers and domestic industries, including those created under the 1-District-1-Factory initiative, to help reduce our dependence on imports, and allow us the opportunity to export more and more of our products, and guarantee a stable currency that will present a high level of predictability for citizens and the business community. Exports, not imports, must be our mantra! Accra, after all, hosts the headquarters of the Secretariat of the African Continental Free Trade Area.
8. Enhanced supervisory action by the Bank of Ghana in the forex bureau markets and the black market to flush out illegal operators, as well as ensuring that those permitted to operate legally abide by the market rules. Already some forex bureaus have had their licenses revoked, and this exercise will continue until complete order is restored in the sector;
9. Fresh inflows of dollars are providing liquidity to the foreign exchange market, and addressing the pipeline demand.
10. Bank of Ghana has given its full commitment to the commercial banks to provide liquidity to ensure the wheels of the economy continue to run in a stabilized manner, till the IMF Programme kicks in and the financing assurances expected from other partners also come in;
11. Government is working with the Bank of Ghana and the oil producing and mining companies to introduce a new legal and regulatory framework to ensure that all foreign exchange earned from operations in Ghana are, initially, paid to banks domiciled in Ghana to help boost the domestic foreign exchange market.
12. Bank of Ghana to enhance its gold purchase programme.