Minister Kenneth Ofori-Atta says depreciation of the cedi ‘significantly affecting’ Ghana’s potential to handle its public debt.
Ghana is at excessive threat of debt misery and has agreed on a debt administration technique with the Worldwide Financial Fund (IMF), finance minister Kenneth Ofori-Atta stated on Thursday.
Ofori-Atta is in the midst of negotiating a aid bundle with the IMF because the West African nation faces its worst financial disaster in a technology.
“The present debt sustainability evaluation carried out reveals that Ghana is now thought of to be in excessive threat of debt misery,” the minister instructed lawmakers throughout his presentation of the 2023 funds.
“Authorities and the IMF have agreed on programme aims, a preliminary fiscal adjustment path, debt technique and financing required for the programme,” he stated, including he hopes to achieve a deal “very quickly”.
The depreciation of the Ghanaian cedi was “significantly affecting” the nation’s potential to handle its public debt, which has elevated to $48.9bn this 12 months, he instructed parliamentarians, saying the foreign money has misplaced greater than 50 % of its worth.
“Our inventory of debt has elevated by 93 billion Ghana cedis ($7bn) this 12 months alone as a result of depreciation of the cedi because the starting of 2022.”
Ghana will implement a debt alternate programme to deal with the challenges, he stated.
Financial progress is anticipated to gradual to three.7 % of gross home product (GDP) in 2022 from 6.7 % final 12 months, and to gradual additional to 2.8 % in 2023, he stated.
Ofori-Atta has confronted requires dismissal from each the governing occasion and opposition who accuse him of financial mismanagement. Final week, he apologised for the nation’s financial hardship however defended himself in opposition to their claims.
“I acknowledge our economic system is going through difficulties and the folks of Ghana are enduring hardships,” he stated final Friday. “Because the particular person President Akufo-Addo has put in command of this economic system, I really feel the ache personally, professionally, and in my soul.”
On Thursday, Ofori-Atta stated Ghana would impose a debt restrict on non-concessional financing amongst different reforms, and can concentrate on utilizing financial coverage to manage inflation, which has exceeded 40 %.
The federal government will freeze new tax waivers for overseas firms and assessment tax exemptions for mining, oil and fuel firms. It is going to additionally freeze hiring for civil and public servants, he stated.
Nevertheless, Ofori-Atta didn’t supply any cuts to spending on flagship programmes, and detailed a swath of infrastructure venture expansions comparable to street enlargement.
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