Economy Is Recovering – Finance Minister

Vice President Alhaji Mahamudu Bawumia and the Finance Minister, Ken Ofori-Atta

The Finance Minister, Ken Ofori-Atta, yesterday gave a ray of hope for Ghana's economic resuscitation and expressed great optimism for the future, with tailored economic policies that will facilitate smooth transition into prosperity for all Ghanaians.

He made these assertions when he presented the mid-year review of the 2017 budget in Parliament, which did not come with any supplementary budget for the first time in a long time.

The minister said the government had lived within its 2017 budget and met almost all its targets with the stabilization of the local currency, reduction in inflation, interest rate and eventual stabilization of the economy, which will soon reflect in the pockets of ordinary Ghanaians.

Mr Ofori-Atta indicated that the overall Gross Domestic Product (GDP) of 6.3% forecast in the 2017 budget statement was maintained over the first half of the year

According to him, within the six months (from January-June, 2017) of the Akufo-Addo administration, there has been a surplus of 0.6% of Gross Domestic Product (GDP) as compared to a deficit of 1.3% recorded over the same period in 2016.

He said Gross International Reserves at the end of June, 2017 was $5.9 billion, which was equivalent to 3.4 months of import cover, as against $4.9 billion at the end of December, 2016, which represented 2.8 months of import cover.

“Mr Speaker, these indicators clearly show that the economy is on the path of recovery and investor confidence has been restored,” he said, adding that because of prudent economic policies, improved fiscal discipline and competent management of the economy, the macro-indicators for the first half of the year are pointing in the right direction.

“The exchange rate is stabilizing, inflationary pressures have eased and interest rates are trending downwards. Progressively, confidence is being restored in the economy and we are confident that the positive trend would be sustained in the months and years ahead,” he sounded optimistic.

“Consistent with our medium-term development priorities, the macroeconomic framework for 2017 aims at ensuring macroeconomic stability, shifting the focus of economic management from taxation to production, protecting the preferential option for the poor and making machinery of government work to deliver the benefits of progress for all Ghanaians,” the minister indicated, stressing that anchored on the medium term macroeconomic framework, the specific macroeconomic targets set for 2017 were as follows: overall GDP growth rate of 6.3 %, non-oil GDP rate of 4.6% of GDP.

“Mr. Speaker, we promised to stabilize the economy in a sustainable manner, while accelerating and creating prosperity and jobs for all. The macro-fiscal performance we have achieved in the first six months of President Akufo-Addo's administration is showing remarkable progress. The major macroeconomic indicators are now trending in the right direction, indicating that the economy is on the right track,” he underscored.

Mr Ofori-Atta said over the first half, agriculture grew by 7.8 % as against 5% recorded over the same period in 2016, while industry also grew by 11.5% as against 1.8% recorded over the same period in 2016.

The minister said inflation reduced from 15.4% in December, 2016 to 12.1% in June, 2017.

He said total revenue and grants amounted to GH¢17.5 billion, which was 8.6% of GDP as against a target of GH¢20.5 billion; but the overall total revenue for the year had been revised downwards from GH¢44.5 billion, adding that total expenditure – including clearance of arrears – amounted to GH¢23 billion as against a target of GH¢27.6 billion, while the total expenditure had also been revised downwards from GH¢58.1 billion to GH¢55.9 billion.

He said the total debt as at the end of June, 2017 was GH¢138.5 billion while total arrears as at the end of June, this year, was GH¢7 billion, claiming that the huge arrears left by the previous government would be cleared by the end of 2019.

The minister also announced that allowances for nursing and teacher trainees would be paid in September.

According to him, under the “Planting for Food and Jobs” programme, 844 agricultural extension officers had been employed and posted to 187 districts of the country.

“Mr Speaker, in order to improve the business environment to make the country an attractive destination for investments and make Ghana most business-friendly nation in Africa, a comprehensive programme for business regulatory reform has been launched, which is aimed at establishing an electronic register for business regulations and proceeds which would provide complete repository of business laws and regulations,” the finance minister declared.

By Thomas Fosu Jnr