Finance Minister, Seth Terkper has stated that the declaration of Ghana as a Highly Indebted Poor Country (HIPC) in April 2001 could have been avoided through the implementation of bold measures.
He however noted that it provided the country with fiscal space to set the path to positive growth.
"In contrast with the HIPC experience, it is relieving for this Government to be leading the development agenda that has restored our pride of place among the Africa rising and renaissance nations”, Mr Terkper said when he presented the 2016 budget statement in Parliament in Accra.
He noted that recent setbacks from commodity price shocks did not make Ghana reverse its course on consolidation even as it reminded the nation of its vulnerable status.
“We are returning to another growth path and our fiscal performance so far clearly shows that we can plan to manage and reverse periodic setbacks as and when they occur,” he said.
The Finance Minister noted that the nation's resolve was to manage the transition setbacks and paradoxes with perseverance and effective planning.
“Consequently, we now see brighter prospects ahead mainly from the investments that we have been making in the energy and other sectors of the economy.
He indicated however that the macroeconomic successes the country had chalked since it began the programme of fiscal consolidation under the home-grown policies and the IMF programme would not make her complacent.
"There is a clear sign that our fiscal consolidation efforts are yielding positive results, making the economy more efficient", he emphasised.
Accordingly, the Ghana Statistical Service (GSS) estimates that GDP will grow at 4.1 per cent at the end of 2015, as against the 3.5 per cent initially projected.
The Finance Minister said as a result of good revenue performance, including GRA's Compliance efforts, containment of overruns in the wage bill and other spending, as well as withdrawal of energy-related subsidies, the country’s fiscal consolidation programme was on course with the deficit set to be on target at 7.3 per cent.
"For the first time in many years, the domestic primary balance in the first half of 2015 achieved a surplus equivalent to 2.8 per cent of GDP, whilst the budget deficit was down to 2.3 per cent of GDP, same as the level attained a decade ago.
"The current account deficit as a percentage of GDP has stabilized whilst the foreign reserve position has significantly improved in line with Government’s Medium Term Debt Strategy and Debt Management policies", he stated.
The Finance Minister noted that Ghana was leading its contemporaries in using a guarantee instrument that the World Bank wanted to use to create an asset class for market assets by middle income countries.
"After some initial implementation difficulties, we are now on course to making the proceeds from commercial and quasi commercial projects pay fully or partially for the loans that finance them.
“This will stop the unsustainable habit of relying on the tax payer to pay for all the nation’s debt service commitments, and against this background Ghana successfully went through the first performance review in August 2015 under the three-year Extended Credit Facility (ECF) with the IMF", Mr Terkper added.
He said all performance criteria under the programme for the second review were also successfully met and documentation was being prepared for the IMF Board to complete the review in December 2015.
He further indicated that Ghana continued to win the confidence of the business community, development partners and of the international financial markets due to her efficient management of the economy.
“We have made far-reaching and significant investments in all sectors of the economy and these have led to considerable improvements in the lives of our people”, he declared.