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Thu, Jun

ECONOMY IS BACK ON TRACK: OFORI-ATTA

Business & Economy

In the run-up to exiting the International Monetary Fund’s extended credit facility (ECF) officially in the coming week, Finance Minister Ken Ofori-Atta has told Parliament that Ghana’s economy is back on track.

In the run-up to exiting the International Monetary Fund’s extended credit facility (ECF) officially in the coming week, Finance Minister Ken Ofori-Atta has told Parliament that Ghana’s economy is back on track.

This, according to the Minister, is partly shown by the historic US$3 billion Eurobond issued last week by Ghana, coupled with recent developments on the foreign exchange market and the swift recovery of the cedi.

Mismanagers

Ken Ofori-Atta made a statement in Parliament yesterday as he briefed the House on key events in the economic sector.

He told MPs that despite poor management of the economy by the Mahama government, resulting in Ghana running to the IMF for help, the Akufo-Addo-led government has worked hard to fix the fundamentals.

“Ghanaians, who have been the victims of poor economic decisions of the past, know all so well that the healing process has been restraining, but it was necessary. It was necessary because what had been broken had to be fixed by the Akufo-Addo government,” the Finance Minister said.

Mr Ofori-Atta recounted that in August 2014, the Mahama government was compelled by the outcome of its homegrown policies and economic management to turn to the IMF for a bailout.

He said it was a time when the market and business had lost confidence in the capacity of the then government to steer the economy.
The implications, the Finance Minister argued, were vividly captured in the headline of an article in London’s Financial Times: “Ghana seeks IMF help after currency falls 40%”.

The article began: “Ghana, the country that epitomised the ‘Africa rising’ narrative of strong economic growth and improved governance, is to seek help from the International Monetary Fund.”

The Finance Minister reiterated that the economy was not in good shape; the financial sector was reeling and the government needed to rebuild the confidence of both Ghanaian and foreign investors.

Desired outcomes

“Mr Speaker, I am happy to announce today that the difficult choice we made has yielded the desired outcome.

“We have successfully completed the programme and the economic indicators are all looking very good,” he told Parliament.

He emphasised that the recent meeting with the executive board of the IMF on March 20 was to approve the combined seventh and eighth reviews under the ECF-supported arrangement, to bring the programme to an end.

He announced that the benefits which followed immediately after the successful completion made available to Ghana roughly US$185.2m. This brings the total cumulative disbursement under the ECF-supported arrangement to some $934.4m, he said.

Achievements

Mr Ofori-Atta enumerated some achievements of the Akufo-Addo government in its first two years in office, highlighting the completion of two back-to-back combined reviews, completion of 12 structural benchmarks and completion of all performance criteria. He added that the government has met seven prior actions to conclude the programme successfully.

To ensure that there are no slips, he said, the government is committed to ensuring irreversibility in its economic management programmes.

In attaining that objective, fiscal discipline will be adhered to in order to avoid off-budget expenditure, enhance public debt management, continue prudent monetary policy to guard against upside risks to inflation, enhance the financial system’s soundness and resilience and, crucially, to implement an aggressive revenue mobilisation regime.

Benefits beyond aid

The Finance Minister pointed out that based on Ghana’s show of improved management in the past 27 months, the IMF has pledged to support the ongoing process of digitising the economy.

Other areas it has pledged to support include building of human capital, the government’s industrialisation agenda, and exports of excess energy to other countries.

It has also indicated a willingness to increase Ghana’s window by $2bn as well as to double budgetary support to $520m, subject to certain prior actions.

Mr Ofori-Atta said the current managers of the economy have shown great creativity in their efforts to take Ghana beyond aid.

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