- The finance minister presented the 2023 mid-year budget review to Parliament on Monday in accordance with the law
- Ken Ofori-Atta said the economy was making modest gains in efforts to reverse the severe economic hardship that hit hardest in 2022
- YEN.com.gh presents six highlights of the budget presentation to Parliament on July 31, 2023 by the minister
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Finance minister Ken Ofori-Atta presented the 2023 mid-year budget review to Parliament on Monday, July 31, 2023.
The review presentation is in accordance with Article 179 of the 1992 Constitution and the Public Financial Management Act, 2016 (Act 921).
The presentation on Monday to the Legislature reviewed the government's 2023 Economic Policy and Financial Statement that was delivered on November 24, 2022.
While the presentation spanned at least one and a half hours, YEN.com.gh presents these six highlights from the minister's presentation.
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1. Ghana has turned the corner of economic recovery
The minister told Parliament that Ghana's economy is bouncing back to life. He said the economy is making modest gains in efforts to reverse the severe economic hardship that hit hardest in 2022.
According to him, the government's policies introduced to bring the economy back to winning ways are yielding positive outcomes.
He mentioned peace, health, security, and a continuous supply of power as some of the progress the country has chalked this year.
2. No tax measures in the 2023 mid-year budget review
Consistent with the prediction and expectation of experts and policy analysts, the finance minister did not introduce new taxes in the 2023 mid-year budget review.
Before the budget presentation, the founding president of IMANI Centre for Policy and Education told YEN.com.gh in an exclusive interview that the government does not need additional taxes to fund most of its poorly thought-through policies.
"For what is worth, it has saved close to GH¢35 billion cedis from the debt exchange programme. It is enough for now. The real sensible thing to do is to put on hold close to GH¢12 billion out of the nearly GH¢27 billion cedis of planned capital expenditure until the economy can breathe again. No need to feed a wasteful enterprise especially as elections are around the corner," he said.
3. No additional funding to finance projects and policies
The finance minister also said that the government will not need any supplementary budget for the 2023 budget approved last year.
He explained that despite a shortfall in oil revenues due to changes in global prices, there has been an increase in non-oil revenue collection within the past six months.
He said stated that a review of oil non-oil revenue revenues and the corresponding expenditures will impact the Annual Budget Funding Amount (ABFA).
“In view of the reason outlined, as well as the lower domestic interest payment and amortization, following the completion of a part of the DDEP, and the reduction in the foreign-financed CAPEX, the Appropriation has been revised from GHS227.7 billion as presented and approved in November 2022 to GHS206.0 billion.”
4. Government reduces GDP from 2.8% to 1.5% in 2023
The minister further announced that the Akufo-Addo-led administration reduced its real Gross Domestic Product (GDP) from a growth of 2.8% in 2023 to 1.5%.
Non-oil real GDP growth was estimated at 3%.
“The economy is showing signs of recovery. The exchange rate has stabilised, inflation has softened, and interest rates have declined since December 2022”, he said.
5. DDEP helped in addressing cash and other liquidity constraints
Despite the controversy stirred by the Domestic Debt Exchange Programme, the minister stated that the programme provided the government with increased fiscal flexibility and helped the government address its cash and other liquidity constraints.
“Total bonds outstanding at the settlement date amounted to GH¢126,978.5 million, of which GH¢29,286.2 million were held by Pension Funds, bringing the total eligible bonds to GH¢97,749.6 million. The Ministry received final participation of GH¢82,994.5 million, representing 84.9% of total eligible bonds.”
6. IMF deal secured in record time
On the IMF deal, the most significant thing the minister said concerned the record-time the deal was secured.
He said Ghana achieved Staff Level Agreement just six months after the country formally requested the Fund support.
He also said Ghana secured financing assurances from Ghana's Paris Club Official Creditor Committee just five months after a formal request was made.
He said Ghana secured IMF Board approval for the $3 billion bailout in May 2023, just five months after service agreements and 10 months after the formal request for Fund Programme.
He said Ghana received 40% of the fund in 2023 with the rest spread over 2024 to 2026.
Bank of Ghana makes GH¢55.12bn loss
Meanwhile, YEN.com.gh reported in a separate story that the Bank of Ghana lost GH¢55.12 billion due to haircuts that its investments suffered under the controversial Domestic Debt Exchange Programme (DDEP).
BoG's holdings of marketable and non-marketable instruments were exchanged for lower-yielding instruments under the DDEP, the BoG said in its 2022 annual financial statement.
BoG governor Dr Ernest Addison said he was working to ensure that equity was restored to a positive path by the end of 2027.
Fidelity Bank and First National Bank suspended from forex trading
In other news, YEN.com.gh reported in June 2023 that two of Ghana's top banks were been sanctioned by the central bank for breaching rules on interbank forex trading rules.
Punitive sanctions were taken against Fidelity Bank and First National Bank Ghana by the Bank of Ghana.
Their forex trading licences have been revoked, and they are not permitted to do any forex transactions for 30 days.
The central bank said in a statement that it hopes the punishment will deter participants in the forex market from breaching forex trading rules.
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