The Minister of Finance, Mohammed Amin Adam, has signaled that government will not be sidetracked into missing its fiscal targets for the year ahead of the general election in December. According to him, the data seen by his outfit points to a change of narrative this time around. Speaking on the sidelines of the Annual Meetings of the International Monetary Fund (IMF) and World Bank in Washington DC, Dr. Amin gave an update on the economy and the ongoing implementation of the IMF-supported programme.
He praised some of the gains made in the economy from a peak inflation of 54% as at December 2022 to a steady progress of achieving the medium-term inflation target of 8 plus or minus 2 percent. However, in an election year economy watchers have expressed fear at how Ghana’s Government could regress by focusing on big spending to retain its political party in power but the Minister allayed those fears.
“Everywhere I have gone for meetings since I arrived here, people have been concerned about fiscal performance in this election year because of our history of fiscal slips in election cycles. But so far, from the data that we’ve seen, we are going to change the narrative. It’s not going to be the same in this election year. Let me make a point that, and I want to forcefully make this point, that this election year will not derail our fiscal path.”
The IMF projects that Ghana will finish the year 2024 with a debt-to-GDP ratio of 83% but will see a consistent decline for the next 5 years to 69.7% by 2029. Meanwhile, the country’s implementation of the IMF-supported Post Covid-19 Programme for Economic Growth (PC-PEG) reached a significant milestone after the successful conclusion of the third review at the staff level pending IMF Executive Board approval at its next meeting expected to be held in the first week of December 2024.
The finance minister bemoaned the challenges bedeviling Ghana’s energy sector which threatens the stability of electricity production in the country. One of the challenges he identified is a lack of transparency in the operationalisation of the cash waterfall mechanism.
“We are also working with ECG and the Ministry of Energy to ensure that the cash waterfall mechanism is operated in a more transparent manner with all eligible collections by ECG deposited into the cash waterfall system for redistribution to all other stakeholders in the energy value chain. We are programmed to undertake an audit of a single collection account of the cash waterfall mechanism for the last quarter of 2023 and the first and second quarters of 2024 with a view to promoting transparency and correct payment anomaly in time.”