Finance Minister, Dr. Mohammed Amin Adam has painted a positive picture of Ghana’s economic trajectory, highlighting significant progress and promising indicators for the medium term.
Providing an update on the economy at the Ministry of Finances Monthly Economic Update on Friday, May 24, 2024, Dr. Amin Adam emphasised the resilience of the economy and the effectiveness of ongoing reforms stressing that all the economic indicators point to a rebound earlier than expected.
“We’re making remarkable progress towards restoration of macroeconomic stability and economic recovery, however, we are not out of the woods yet. In spite of emerging fiscal pressures, we are determined to hold the line to ensure that we meet our fiscal targets for the year. We will not hesitate to adjust expenditures accordingly in the event that our revenues fall short of target,” he said.
He pointed to a series of achievements and improvements across various economic metrics, attributing them to the government’s commitment to structural reforms and prudent fiscal management.
One of the key areas of success highlighted by the Finance Minister was the implementation of the IMF-Supported Post-COVID-19 Programme for Economic Growth (PC-PEG). Following a successful 2nd Review Mission by the IMF, Ghana secured a Staff Level Agreement (SLA), paving the way for the disbursement of additional funds.
“The positive results of the first and second reviews of the implementation of the IMF-supported Programme testify that we are achieving the Programme’s objective of restoring macroeconomic stability and debt sustainability,” Dr Amin Adam affirmed.
In terms of economic growth, Dr. Amin Adam noted that Ghana had exceeded expectations, with GDP growing by 2.9% in 2023 compared to the original projection of 1.5%. He expressed confidence in the country’s ability to sustain this momentum, projecting an average growth rate of 5% in the medium term. This growth, he explained, would be supported by initiatives such as the revival of Ghana’s industrialisation drive, modernisation of agriculture, and support for SME growth and financing.
Turning to inflation, the Finance Minister highlighted a significant decline from 54.1% at the end of 2022 to 25.8% in March 2024. He attributed this positive trend to fiscal consolidation efforts, tight monetary policy, exchange rate stability, and improved food production. Dr Amin Adam expressed optimism that inflation would return to the target band of 8.2 percent by 2025.
In addition to improvements in economic growth and inflation, Dr. Amin Adam highlighted positive developments in other areas. He said Gross International Reserves (GIR) improved to US$6.2 billion, covering 2.7 months of import cover by February 2024 noting the significant progress in stabilizing the exchange rate, with the depreciation of the cedi against the US Dollar halving from 54.2% at the end of November 2022 to 27.8% at the end of December 2023.
However, Dr. Amin Adam acknowledged recent pressures on the exchange rate but remained confident in the government’s ability to address them. He outlined measures being taken to stabilize the cedi, including fiscal consolidation, intensification of the gold-for-oil and gold-for-reserves programs, and appropriate foreign exchange interventions by the Bank of Ghana.
He expressed gratitude to stakeholders for their support and emphasized the government’s commitment to sustaining economic stability and fostering inclusive growth.
“The medium-term is bright, and we call on all stakeholders to continue to work with us as we strive to increase growth, reduce inflation, and improve our fiscal and debt metrics,” he concluded.
