Economic Challenges: Finance Expert Projects Grim Outlook For Ghana In 2023

Economic Challenges: Finance Expert Projects Grim Outlook For Ghana In 2023

  • An experienced finance analyst has said Ghana could face worse economic times in 2023 despite assurances by the government that things will get better
  • Haruna Alhassan of the Centre for Social Justice has said international and domestic factors all point to a tough 2023 for Ghana
  • Alhassan said the domestic debt exchange programme, for instance, would adversely affect firms and result in job losses; also food inflation will persist in 2023

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A finance expert has forecasted that 2023 will not bring any major shift in Ghana’s difficult economic situation.

Haruna Alhassan, a senior fellow of the Centre for Social Justice (CSJ), a Ghanaian think tank, has said global and domestic issues will take a toll on Ghana.

“The IMF, the World Bank, and the United Nations are all forecasting a tougher 2023 compared to 2022. A third of the world is expected to experience recession. This is premised on high energy and food prices due to the ongoing Russia and Ukraine war. Then, there are also supply disruptions due to the COVID-19 upsurge in China as well as potential geopolitical confrontations between the US and China over Taiwan,” he stated.

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Nana Akufo-Addo has said 2023 would be great by an analyst disagrees.
President Nana Akufo-Addo (L) placed beside stock images of Ghana cedi notes and a market woman with her head bowed. Source: Getty Images, UGC
Source: Getty Images

He made the comments during an exclusive interview with on Tuesday, January 10, 2023.

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Meanwhile, president Nana Addo Dankwa Akufo-Addo told Ghanaians in December last year during a national address to Ghanaians that he was confident that Ghana’s economy will recover in 2023 due to some positive gains a few weeks earlier.

But the CSJ analyst told that forecasts by credible institutions interested in the global economy point to high inflation across the world. Also, central banks around are projected to tighten monetary policy as a result, thus stifling economic growth across the globe.

Domestic debt exchange programme exacerbates 2023 outlook for Ghana

But in Ghana the debt exchange programme will worsen the already precarious economic situation.

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“Domestically, the ongoing debt exchange will significantly reduce corporate performance, particularly in the finance sector, which will have cascading effects on corporate tax revenues.
“Similarly, anticipated staff rationalisation as affected businesses try to stay afloat will reduce tax revenue from employment. Overall, government revenue target for 2023 will be missed as additional revenue measures introduced in the budget will not adequately make up for the lost revenues,” he analysed.

The low revenue will compel the government to curtail its expenditure, which will in turn dampen local economic growth, he feared.

“Further, consumer spending will be weak due to lower purchasing power consequent to additional taxes like increased VAT rate; high inflation, and loss of employment by a section of labour,” he was blunt.

Food inflation to persist throughout 2023

Haruna Alhassan said to his mind, the incidence of high food inflation that started last year will continue through out 2023.

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“Food prices will remain high on anticipated high input prices affecting yields,” he said.

His advice to households goes as such:

“Prudent measures are required at the household level to cope with the expected tough times this year.”

Ghana’s Debt Crisis Could Mirror Greek Scenario

Meanwhile, has reported in a separate story that Alhassan has said Ghana's debt situation makes the country's economic prospects uncertain.

The CSJ analyst said Ghana's debt crisis could mirror the Greek scenario of 2010 that took close to a decade to fix.

Alhassan said Ghana's road to economic recovery would be long and difficult starting from 2023.

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