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The Minister for Finance, Ken Ofori-Atta, has told Members of Parliament (MPs) that with just one and half years of being in power, the government under President Akufo-Addo has been able to put the economy back on track.
The Ghanaian economy, he noted, was completely in a clutter under the leadership of the previous government headed by Mr. John Dramani Mahama.
Supporting his claims with facts while presenting the Mid-year fiscal policy review of the 2018 budget statement and economic policy on the floor of Parliament, Thursday, Mr. Ofori-Atta said President Akufo-Addo inherited an economy which was in distress with a debt overhand which had exceeded 73% of the country’s GDP.
GDP growth had also declined to 3.7%, the lowest twenty-three (23) years with a fiscal deficit which had risen to 9.3% of GDP and a Monetary Policy Rate (MPR) of 22.5% which had led to a crowding out of the private sector making it difficult for entrepreneurs and businesses to grow and expand to create jobs.
The underperformance of the Ghanaian economy, he noted, was evidenced in the International Monetary Fund’s assessment report in October 2016 which stated that “…Economic outlook remains difficult and fiscal challenges are mounting. The growth outlook for 2016 and 2017 has weakened … Revenues are underperforming and the deteriorated financial situation of some SOEs in the energy sector is posing fiscal risks.
The authorities will cut spending to offset revenue shortfalls and have taken steps to address the financial situation of SOEs, including with new levies on petroleum products … Domestic revenues are underperforming-reflecting lower-than-projected oil prices, weak economic activity with lower business profits and personal incomes, as well as lower-than-expected revenue impact from several measures implemented so far …”
Having refreshed the memory of the House about the performance of the economy under Mr. Mahama, the Finance Minister went further to present the performance the economy under President Akufo-Addo.
He said by the end of 2017, the new government was able to reduce the fiscal deficit from 9.3% at the end of 2016 to 5.9% with inflation also reducing from 15.4% as at the end of 2016 to 11.8%.
Furthermore, the new government was able to reduce gross public debt to GDP ratio from 73.1% as at the end of 2016 to 69.8% while GDP also grew from 3.7% as at the end of 2016 to 8.5% and reduced interest rates from 16.4% as the end of 2016 to 13.3%.
“Mr. Speaker, the same IMF had this to say in April 2018, and I quote: “Implementation of the ECF-supported programme has significantly improved in 2017.
Growth has rebounded, the fiscal deficit has declined, leading to a primary surplus for the first time in fifteen years, the external position has strengthened, generating a build-up of external buffers, and key steps have been taken to address fragilities in the financial sector. Reforms should continue to entrench these hard-won gains …”
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