Dr. Priscilla Twumasi Baffour, Senior Lecturer in the Department of Economics at the University of Ghana, has observed that Ghana’s export basket is not diverse.
This, she claims, exposes the economy to a slew of international shocks, including the ongoing COVID-19 pandemic and the Russia-Ukraine war.
She also stated that the economy accumulates a large number of fiscal deficits, which contribute to the current high public debt [estimated at 80.1 percent of GDP as of December 2021, according to Bank of Ghana statistics].
Dr. Baffour stated during the IMANI-GIZ Reform Dialogue on Ghana’s Macroeconomic Environment that the economy cannot be said to be doing well with current high levels of inflation, a depreciating cedi, and a high cost of capital.
For his part, a Deputy Minister of Finance, Dr John Kumah said that the macroeconomic environment is meant to be an enabler, but the Ghanaian economy is not yet there but on the path.
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He noted that the government is reducing the deficit, revising expenditure targets by 30% for discretionary expenses, and has placed a moratorium on the importation of vehicles, among others.
He noted that last year GRA met its revenue target with excesses and this is expected for the 2022 fiscal year also. However, external factors like COVID-19, the Russian-Ukraine crisis and other external factors have adversely affected the economy.
He also noted that the Fiscal Responsibility Act is very good in guiding and monitoring the government.
Speaking about the policy rate and other macroeconomic variables at the same event, John Kumah who is also lawmaker for Ejisu also noted that the Bank of Ghana through its monetary policy tools have been implementing policies to address the economic problems. He noted that government has to do more with regard to the efficiency of its expenditures.
Recently the Finance Minister Ken Ofori Atta announced some measures to deal with the economic challenges facing Ghana.
Mr Ofori-Atta announced on Thursday March 24 that with immediate effect, the government had imposed a complete moratorium on the purchase of imported vehicles for the rest of the year.
This affected all new orders, especially 4-wheel drives, he said.
“With immediate effect, Government has imposed a complete moratorium on the purchase of imported vehicles for the rest of the year. This will affect all new orders, especially 4-wheel drives. We will ensure that the overall effect is to reduce total vehicle purchases by the public sector by at least 50 percent for the period,” he said.
“Again, with immediate effect Government has imposed a moratorium on all foreign travels, except pre-approved critical/statutory travels; Government will conclude on-going measures to eliminate “ghost” workers from the Government payroll by end December 2022;
“Discretionary spending is to be further cut by an additional 10%. The Ministry of Finance is currently meeting with MDAs to review their spending plans for the rest of the three (3) quarters to achieve the discretionary expenditure cuts; ii. these times call for very efficient use of energy resources.
“In line with this, there will be a 50% cut in fuel coupon allocations for all political appointees and Heads of government institutions, including SOEs, effective 1st April 2022,” he added.
