Ghana 2024 Budget Statement: Full Text

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Here is the full text of Ghana’s 2024 budget statement, dubbed the ‘Nkunim’ Budget, as delivered by Finance Minister Ken-Ofori Atta on Wednesday, November 15, 2023.

Right Honourable Speaker, Honourable Members of Parliament, on the authority of His Excellency the President Nana Addo Dankwa Akufo-Addo and pursuant to Article 179 of the 1992 Constitution of the Republic of Ghana and Section 21(3) of the PFM Act 2016 (of ACT 921), I respectfully present to you the Budget Statement and Economic Policy of Government for 2024 Financial Year.

  1. Mr. Speaker, I beg to move that this august House approves the Financial Policy of the Government of Ghana for the year ending 31st December, 2024. 3. Respectfully, I also submit to this Honourable House the following statutory reports:
  2. The 2023 Annual Report on the Petroleum Funds, in line with Section 48 of the Petroleum Revenue Management Act, 2011 (Act 815), (as amended); and ii. The 2023 Report on the utilisation of the African Union Levies, pursuant to Section 7 of the African Union Import Levies Act, 2017 (Act 952).
  3. Mr. Speaker, this Budget Speech is an abridged version of the 2024 Budget Statement and Economic Policy of Government. We have also developed a more detailed update on sectoral performance in a ‘Volume II’ document. I request the Hansard Department to kindly capture these documents as the Budget Statement and Economic Policy of Government for the financial year 2024. Immense Gratitude
  4. Mr. Speaker, I stand here today to present the 2024 Budget, which seeks to advance us on the path toward fiscal consolidation, macro stability and growth that began a year ago.
  5. Mr. Speaker, I first want to take the opportunity to express immense appreciation to H.E the President for the privilege to present the national Budget on his behalf over the past 7 years. More importantly I want to express my profound gratitude to God for his grace, mercy and favour toward our Nation. Together with the Psalmist, let us say “Bless the Lord, O my soul; And
  6. all that is within me, bless His holy name! Bless the Lord, O my soul, And forget not all His benefits” [Psalm 103:1-2].
  7. Mr. Speaker, I also wish to express my deep appreciation to you, Right Hon. Speaker, and the Hon. Members for their support over the years. We have not always agreed, but we always eventually find common ground in the interest of the Republic and we should this collaboration. A Difficult Context
  8. Mr. Speaker, almost a year ago on Thursday, 24th November, 2022, I presented the 2023 Budget and, as always, gave an honest and forthright update on the economy, highlighting the extent of the challenges facing our country. Indeed, a month before, H.E. the President also pointed out that, never have so many malevolent forces come together, in a perfect storm, to impact our lives so dramatically. Key macroeconomic indicators then, were uninspiring.
  9. Against that backdrop, I then presented Government’s plan of recovery, focusing on: i. restoring macro-economic stability; ii. coordinating an equitable debt operation programme; iii. ensuring that the vulnerable are well protected; iv. negotiating a strong IMF programme; v. a strong private sector growth agenda; and vi. attracting significant green investments to promote growth.
  10. Mr. Speaker, in two (2) out of the last 7 years (2020-2022) the Ghanaian economy has faced challenges. The economy, growing at an average of 7 percent with a single-digit inflation, declining interest rates and a stabilising currency, suffered unforeseen shocks like many other economies. GDP growth slumped from 6.5 percent in 2019 to 0.5 percent in 2020 – as the lockdown and closure of businesses and the ports had a devastating effect on the economy, triggering a cost-of-living crises that has made lives difficult for the Ghanaian people. Though bartered and bruised, we are not broken and our resilience is manifesting.
  11. Mr. Speaker we also saw the damaging effects that the economic downturn had on Ghana’s already stretched revenues. This was even made worse by the additional expenditures that were required during the covid-19 Pandemic to ensure that life and livelihoods were protected.
  12. Mr. Speaker, 2020 was also in an election year. The first ever election in the Fourth Republic with zero donor funding. However, Government’s sensitivity to our people was remarkable: No lay-offs in the public service; salaries were dutifully paid over the year; and free water and electricity for the entire population was provided, especially for life-line consumers. Indeed, Entrepreneurship was not ignored as GH¢600 million of CAPBuSS from GEA was effectively deployed.
  13. Mr. Speaker, permit me to clarify that the disruption to our macroeconomic path over the last few years was not peculiar to Ghana. The global disruption to supply chains, adjustment to new forms of work, and shifts in demand produced some of the most cataclysmic effects on inflation and growth worldwide. This set-off the worst form of global cost of living crises since World War II.
  14. In the US, inflation surged from a low of 1.8 percent in 2019 to 6.5 percent by 2022 and is currently at 3.7 percent. We have seen this reflect in interest rate decisions by the US Federal Reserve and also in benchmark yields. The yield on the 10-year US Treasury instrument is currently at 4.6 percent compared to 1.4 percent two (2) years ago. This is an economy whose currency is the global reserve currency. We see similar trends in the Eurozone and also in the UK. Inflation in the UK was 1.7 percent in 2019 and was recorded at 11.1 percent in October 2022, a 41-year high. Changing The Narrative
  15. Mr. Speaker, in the Mid-Year Review, I informed this House that we had started turning the corner. Today, it is evident that:
  16. We turned the corner when inflation started declining from 54.1 percent in December 2022 to 35.2 percent in October 2023;
  17. We turned the corner when, despite a 1.5 percent projected growth, the economy galloped at a remarkable pace, and clocked an average of 3.2 percent growth in the first two quarters of the year;

iii. We turned the corner when the currency, which had been under severe pressure over the past two years, depreciated by a modest 6.4 percent cumulatively from February to date, compared to 53.9 percent over the same period in 2022. The performance of the Cedi is also a reflection of 4 the fact that confidence is back, revenues have improved, and that the recovery is indeed real and is here to stay;

  1. We turned the corner when companies started going back to the job markets to hire workers;
  2. We turned the corner when the International credit rating agencies, which have not been favourable to Ghana in recent years, started being positive about our economy; and
  3. We turned the corner when the Banking industry started to record and report a profit-after-tax growth of 43.8 percent (GH¢6.2 billion);

vii. We turned the corner when in record time we completed the IMF 1st Staff Review of 6 Performance Criteria, 3 Indicative Targets and 3 Structural Benchmarks

  1. Our task now and in the medium-term is two-fold: to maintain stability and to keep on growing. We are determined to remain on this course of increased growth, currency stability, and disinflation over the medium-term. Our future growth prospects are certainly brighter. And I am confident that this ”Nkunim” Budget will ensure that we boldly walk on a sustainable path toward creating decent jobs and wealth for our people. For with national dedication, the Lord will continue to give us treasures of dark places and hidden riches in secret places.
  2. Mr. Speaker, our promise to all stakeholders, in particular to the people of Ghana is that, the Akufo-Addo Government is determined to maintain the discipline, compassion, and creativity required to keep the economy stable and maintain the robust growth. Stability with Growth
  3. Mr. Speaker, today, I accordingly present the 2024 Budget to set out the broad medium-term policy framework underpinning our approach towards recovery and stability with growth. Among other things:
  4. It provides the pathway towards fiscal consolidation and macro stability;
  5. It sets out a new debt sustainability path after the excruciating Domestic Debt Operations with after-shocks on the financial sector;

iii. It outlines the policy priorities underpinning our 5-year Growth Strategy with focus on selected initiatives over the next 14-months;

  1. It comes just after the successful First Review of the 3-year US$3 billion IMF-ECF Programme where we reached a Staff Level Agreement on Ghana’s performance in meeting the 6 Quantitative Performance Criteria, 5 2 out of 3 Indicative Targets, and 6 out of 7 Structural Benchmarks due at the end of September 2023; and It deepens our democratic development by prioritising resources for institutions to support the conduct of the 2024 General Elections.
  2. It commits to funding existing projects in roads, rural electrification, rural telephony, IPEP and arrears.
  3. Mr. Speaker, the 2024 Budget is even more significant because we will cross the GH¢1 trillion Gross Domestic Product (GDP) mark for the first time in our economic history. Let me repeat, Mr. Speaker, Ghana’s economy under President Akufo-Addo’s final year in office is projected to be valued over GH¢1 trillion in 2024 from the GH¢219.5 billion in 2016.
  4. Mr. Speaker, with such a milestone ahead of us, Government is protecting, at all cost, the foundation for sustained economic expansion. A foundation that has been achieved through the sweat and patience of the Ghanaian people. We pledge to protect this for all our people and especially for private sector growth. And we shall do so by ensuring that the enabling factors are in place and accessible to all. These will include reliable energy supply, stable Cedi, lower inflation and lower interest rate regimes, access to private sector credit, infrastructure provision, food security, national security, and inter-continental market linkages through increasing active platforms such as the AfCFTA.
  5. Mr. Speaker, fundamentally, this is a Government that is self-aware, reflective and has been open throughout the process to incorporating citizens feedback in preparing this Budget, and as in previous years, we have prioritised stakeholder consultations. Consequently, we engaged with and obtained valuable inputs from key stakeholders, including investors, traders, academia, organised labour, civil society organisations, bankers, development partners, faith-based organisations, and a cross-section of the leadership and other honourable Members of Parliament.
  6. We also launched the Ghana Mutual Prosperity Dialogue on the 2nd November, 2023, a new and innovative platform to deepen our collaboration and partnership with the private sector. The platform aims to enhance the longterm competitiveness of Ghana and increase our attractiveness as a hub for businesses on the continent. This will have a standing committee co-chaired by MOTI/MoF and the Private Sector.
  7. I want to assure our stakeholders that we have, as much as possible, reflected the proposals and recommendations from these engagements in this Budget. 6 There is much more to be done with the shared ideas and the Mutual Prosperity Dialogues will be a robust and dynamic platform to inform policy. Akosombo Dam Spillage

25.Mr. Speaker, in the last few months, we have been witnesses to the devastating impact of the Akosombo Dam spillage. This follows excessive rainfall recorded in several parts of the country. To preserve the structural integrity of the dam, the Volta River Authority commenced controlled spilling on 15th September, 2023. This led to the flooding of downstream communities in parts of the Volta, Eastern, and Greater Accra regions. The heavy rainfall also caused flooding upstream of the Akosombo dam, and impacted communities in the Savanna, Oti, and Bono-East Regions.

26.Government through VRA, NADMO, and various agencies under the 13-member high level inter-ministerial committee, (comprising of the Ministries of Energy, Finance, Local Government, Environment, Interior, Health, Sanitation & Water Resources, Defense, Roads & Highways, Education, Information, Health, and Gender) have subsequently provided various forms of support to the impacted communities. This support included food and related items, drinks, mattresses, mosquito nets and coils, clothes, baby food and diapers, sanitary pads, treated water services and storage tanks, solar lamps, sanitation services, restoration of utility services, and some social infrastructure.

27.Mr. Speaker, the visit of the officials of the Ministry of Finance and myself, in collaboration with VRA, to the victims of the Akosombo Dam Spillage in Mepe was truly revealing and sobering. Indeed, we empathise with the families that have been affected and displaced by the spillage. We met victims, townsfolks, children, the chiefs and of course Honourable Okudzeto.

28.Mr. Speaker, Government has budgeted an amount of GH¢220 million to support the relief phase for the communities affected by the Akosombo spillage as well as floods upstream in the Oti, Savannah, and Bono-East Regions.

29.For the restoration phase, Government through the Ministry of Agriculture will allocate additional resources to support the restoration of livelihoods.

30.In addition, the Ministry of Finance, after the visit was quickened to respond. We have requested funding from the World Bank under the IDA Crisis Response Window (CRW) to support the resettlement of the victims, restoration of livelihoods, compensation and reconstruction of infrastructure in the affected communities.

31.Mr. Speaker, we recognise the place of climate policy and financing to help address the long-term effects of climate change on victims of drought, flooding, and other adverse weather events. Accordingly, the Ministry has applied to the Global Shield Against Climate Risk Fund, an initiative launched by President Nana Akufo-Addo and Chancellor Olaf Scholz during the COP 27 in Sham ElSheikh, to access some financial resources to support communities upstream and downstream of the Akosombo Dam.

  1. I convey the sincere appreciation of H.E. The President and the entire Government to all groups and individuals who have empathised with, and supported the affected families. It is in this same spirit that we must continue to be grateful to God that no lives have been lost due to the devastating spillage from the Akosombo Dam. Investing for Transformation
  2. Mr. Speaker, we have worked hard and invested significant resources. And being sure of this knowledge, I can confidently assert that over the past 7 years: Every sector has been positively impacted. Every household has been positively impacted by our social intervention programmes. And Every region has also been positively impacted. Indeed, President AkufoAddo has deepened decentralised development by investing GH¢422.1 million to create and resource six new administrative regions. The most in our history since independence.
  3. Consistent with our policy on preferential options for the poor, i.e. leaving no one behind, we have been historic in enhancing social mobility and protected the vulnerable in our society. In this regard, we have since 2017:
  4. Improved access to quality SHS education for about 5.7 million Ghanaians by investing GH¢8.4 billion in the future of our next generation;
  5. Increased enrolment and learning outcomes of 3.8 million pupils by investing GH¢3.6 billion in the School Feeding Programmes;

iii. Reformed the NHIS to improve and expand health service delivery to 16 million Ghanaians.

  1. Supported foundational education of over 6 million pupils by investing GH¢248.5 million as Capitation Grants; and
  2. Improved the quality of life of about 350,000 Ghanaian households under the LEAP by investing GH¢1.2 billion.
  3. Mr. Speaker, we made all these investments into social mobility, not just because it was the right thing to do morally, but also because we believe it is economically essential to uplift and extend opportunities to every Ghanaian 8 household. We are confident that the record high investments we have made and continue to make over these seven years in preparing our children for a brighter future will significantly transform our society, especially by tackling the root cause of poverty that has afflicted many families from generation to generation. Mr. Speaker, having a child pursuing a university degree is no more a purview for the rich but for all strata of our society.
  4. Mr. Speaker, we believe it has been seven years of grace and positive impact. We are determined to do more to boost the capacity of the private sector to expand productivity and create jobs. In the past 7 years, we have:
  5. Invested GH¢32.7 billion to keep the lights on and support the growth of businesses;
  6. Invested GH¢25.3 billion to facilitate the repositioning of the financial sector and enhance its ability to assist business operations. To date, the Development Bank Ghana has facilitated GH¢1 billion in competitive financing for the private sector, and GIRSAL continues to mitigate risks in the agriculture sector;

iii. Supported 100,000 young graduates to secure workplace experience and employment by investing GH¢2.4 billion in NABCO;

  1. Invested GH¢7.1 billion to build road and transport infrastructure to improve connectivity and productivity;
  2. Invested GH¢541.5 million in 169 1D1F enterprises

to scale-up value addition and provided 140,000 additional jobs; and vi. Created over 2.3 million jobs in the private and public sectors (approximately 900,000 in the private sector and 1.4 million in the public sector).

  1. Mr. Speaker, capital spending is equally important to the future of our country, consequently we mobilised and deployed resources to:
  2. Expand the railway network, including connecting Tema to Mpakadan to promote trade on the Eastern Corridor;
  3. Construct 12 fish landing sites and two (2) fishing harbours at a cost of GH¢19.5 million to promote the fishery-based livelihoods of our coastal folks;

iii. Improve community infrastructure by investing GH¢2.2 billion into over 2,000 projects under the IPEP initiative;

  1. Promote inner city development by spending GH¢190.3 million under the Zongo Development Fund; and
  2. Expanded and improved the road network by investing about GH¢16 billion. Recording the most kilometers of roads and interchanges done in our history.
  3. Mr. Speaker, we also invested GH¢1.7 billion in the National Identification Scheme to ensure that 17.5 million eligible Ghanaians acquire security-sensitive ID Cards. This has laid the foundation for a prosperous future where digitalisation provides more convenience, introduces an added layer of efficiency in delivering public services, and enhances our ability to safeguard our national interests.
  4. Mr. Speaker, I want to stress at this juncture that GHANA HAS PAID ITS DUES, HAS TURNED THE CORNER, AND GETTING BACK ON TRACK. Despite these successes, we have to do more to reinforce our stability and guarantee decent jobs with good pay for the young people. As such, through the 2024 Budget, we will deliver even more investment across the real sector to place our economy on a firm growth trajectory that will create more jobs, safeguards our climate prospects and deeply entrench Ghana as the seed country for Africa’s development renaissance.
  5. Mr. Speaker, we will continue to invest in on-going projects, and on the external front, we will conclude negotiations with the Official Creditor Committee to ensure that work on eligible externally funded projects resume.
  6. We will, through the Ghana Mutual Prosperity Dialogue, be intentional about collaborating with the private sector and our development partners to support local businesses attract FDI and enhance the economic prospects of our people.
  7. Indeed, given the potential to upscale and the multiplier effects that our small and medium-sized businesses possess, Government intends to scale up support to young entrepreneurs and fledgling businesses, with a singular aim to create sustainable jobs across all communities. In this view the Ministry has teamed up with MIDA and in committing GH¢1 billion to ensure that our Enclave project for import substitution is successful.
  8. Mr. Speaker, I am happy to announce that YEA is about concluding negotiation with CCI, the business process outsource (BPO) operator in sub-Saharan Africa for the establishment of a call centre that can see the direct creation of 20,000 local jobs for our young graduates. Office space has already been secured. Our goal is to realise Ghana’s potential to become a global BPO powerhouse, employing over 250,000 Ghanaians over the next few years. Ultimately, our ambition remains to build an entrepreneurial nation and create an additional minimum of 1 million jobs for the Ghanaian youth over the near-term. We have done this before with 2 million jobs in years, but we must move faster.
  9. Mr. Speaker, we are also positioning a generation of Ghanaians to secure our leadership in the global arena. Today, our country hosts the headquarters of the AfCFTA. We also have a privileged position in leading the climate change charge. As the agreed host of the Climate Vulnerable Forum (CVF) Secretariat, we are galvanising the coalition of 68 nations and 1.7 billion people to shape the climate discourse and secure resources for a just energy transition.
  10. Mr. Speaker, that is the promise of this Budget. And we will keep our eyes firmly fixed on the future and build lasting prosperity for this and the next generation. Mr. Speaker, as members recall, we came into government in 2017, in a period of despondency and meagre resources of 2 fish and 5 loaves. Today, we can only marvel at how far the Lord has multiplied our resources.
  11. I will now proceed to update the House on the macro-fiscal performance of the economy. II. GLOBAL ECONOMIC DEVELOPMENTS AND OUTLOOK
  12. Mr. Speaker, global economic recovery remains sluggish primarily due to a confluence of setbacks, including the lingering effects of supply-chain disruptions and geopolitical events, and the increasing cost of living across many economic blocs. The disruptions in energy and food prices, and efforts to combat record-high inflation through tightening global monetary policies, have considerably slowed down economic activity globally.
  13. According to the International Monetary Fund’s October 2023 World Economic Outlook (WEO), global economic growth is anticipated to decelerate from 3.5 percent in 2022 to 3.0 percent in 2023 and, at best, to 2.9 percent in 2024. These projections are noticeably lower than the pre-pandemic historical average of 3.8 percent from 2000 to 2019. Projections of 3.1 percent global growth over the medium -term are the lowest in decades, and the prospects for countries to achieve higher living standards are rather bleak.
  14. Mr. Speaker, the IMF’s October 2023 Regional Economic Outlook for SubSaharan Africa indicates that the contagion effects of developments within the region have resulted in a projected slowdown in the region’s growth for the second year in a row to 3.3 percent in 2023, from 4.7 percent in 2021 and 4.0 percent in 2022. The region is, however, expected to recover in 2024, with growth bouncing back to 4.0 percent, propelled by a pickup in four-fifths of the 11 countries in the region, spearheaded by relatively strong performances in nonresource-intensive countries.
  15. Global inflation (CPI-based average annual) is expected to gradually decline because of monetary tightening and declining international commodity prices. Global inflation is projected to fall from its peak of 8.7 percent in 2022 to 6.9 percent in 2023 and further 5.8 percent in 2024.
  16. Mr. Speaker, in Sub-Saharan Africa, inflation is decreasing, albeit still at historically high levels. According to recent available data, over 40 percent of countries have consistently witnessed a decline in inflation for at least two months. On average, countries with flexible exchange rate regimes have experienced stronger inflation pressures compared to countries operating fixed exchange regimes. As of July 2023, nearly one-third of the region’s economies still had inflation rates in double digits. Inflation in SSA is anticipated to rise from 14.5 percent in 2022 to 15.8 percent in 2023 before it drops to 13.1 percent in 2024.
  17. Mr. Speaker, Macroeconomic imbalances are also improving, evidenced by falling inflation in most parts of the region. However, a slowdown in reform efforts, a rise in political insecurity within the region, and external downside risks (including China slowing down) could undermine growth. 12 III. MACROECONOMIC PERFORMANCE FOR JANUARY TO SEPTEMBER 2023 Overview Of Macroeconomic Performance (Q1-Q3 2023)
  18. Mr. Speaker, please permit me to present macroeconomic performance for the first three (3) quarters of 2023 within the context of the targets that were set in the 2023 Mid-Year Fiscal Policy Review. Before I proceed, it is important I restate the targets we set in the 2023 Mid-Year Fiscal Policy Review. These include:
  19. Overall Real GDP growth of 1.5 percent;
  20. Non-Oil Real GDP Growth rate of 1.5 percent;
iii. End-period inflation of 31.3 percent;
  1. Overall Balance (commitment) of -5.7 percent of GDP;
  2. Primary Balance (commitment basis) of -0.5 percent of GDP; and
  3. Gross International Reserves (Excluding oil funds, encumbered assets, and pledged assets) sufficient to cover at least 0.8 months of imports of goods and services by end-2023.
  4. Mr. Speaker, provisional macroeconomic data on the performance of the economy for the period Q1-Q3 2023 demonstrated Government’s relentless commitment to keep the corner turned. The IMF rightly described Ghana’s recent macroeconomic performance in the first review as “compelling performance”. Honorable Members may wish to refer to the IMF’s Press Release numbered (PR23/339) and dated 6th October, 2023 for this update.
  5. As I indicated during the 2023 Mid-Year Fiscal Policy Review, the prompt deployment of strong fiscal and monetary policy measures largely accounts for the continued macroeconomic stability and economic recovery. Growth in 2023 has been more resilient than earlier expected, inflation has been on the decline, the fiscal and external balances have improved, and the exchange rate has stabilised.
  6. Mr. Speaker, Government introduced the Gold-For-Oil (G4O) Policy in 2022. The Policy, which leverages the Bank of Ghana’s domestic gold purchase programme was intended to provide foreign exchange financing for the importation of petroleum products and help reduce demand for US dollars from the Bulk Import Distribution and Export Companies (BIDECs) who would have otherwise gone to the market to source forex for the importation of petroleum products.

57.Since then, under the gold for reserves programme, the Bank of Ghana has purchased a total amount of 17.89 tons (US$1,140m) of gold to boost its gold reserves. In addition, under the G4O programme, 23 cargoes (circa 800,000 metric tonnes) of Gasoline and Gasoil, equivalent to 30 percent of national consumption, have so far been imported. The G4O Programme has significantly contributed to the stabilisation of the cedi/dollar exchange rate (GH¢17 in November 2022 to GH¢12 in November 2023 to the dollar) leading to a reduction in the ex-pump price of diesel from GH¢23 per litre to GH¢12 per litre.

58.The plan is to scale up the programme to cover 50 percent of national consumption. These interventions have boosted gross reserves of the Bank of Ghana and helped reduced foreign exchange pressures emanating from BIDECs by reducing their dependence on the foreign exchange interbank market thereby leading to a more stable cedi and ex-pump petroleum prices this year.

  1. Mr. Speaker, I will now update the House on the performance of our macroeconomic indicators:
  2. Real GDP growth averaged 3.2 percent in the first half of 2023 compared to 2.9 percent in same period in 2022, signaling a strong rebound. Robust growth in the Services (avg. 6.3%) and Agriculture (avg. 6.2%) sectors were the key drivers. It is instructive to note that the average growth of 3.2 percent for the first two quarters of 2023 is higher than the 2023 revised growth target of 1.5 percent.
  3. Price developments indicate that inflation is on a declining path in response to ongoing fiscal consolidation, appropriate tightening of monetary policy, and relative stability in the exchange rate. Headline Inflation declined by 16 percentage points, from 54.1 percent in December, 2022 to 38.1 percent in September, 2023. Core inflation has also declined sharply from 53.2 percent in December 2022 to 39.0 percent in September 2023. Just yesterday, when I was preparing to come here, the Ghana Statistical Service announced that the inflation for October 2023 is 35.2 per cent.

iii. The Cedi has stabilised against the US dollar since early 2023 with a year-to-date, cumulative depreciation of 25.7 percent compared to 54.1 percent over the same period in 2022. Specifically, the cedi has only depreciated by 6.4 percent on cumulative basis since February 2023 compared to 53.9 percent over same period in 2022. The stability of the Cedi largely reflects the positive impact from the restoration of economic activity, including robust economic growth, improvement in the current 14 account position, improvement in forex liquidity following IMF ECF inflows, Bank of Ghana’s domestic gold purchase programme, and reduced speculative FX speculative demand as market confidence rebounds.

  1. Gross International Reserves (GIR) as at September 2023 stood at US$5.0 billion (2.3 months import cover) compared to US$6.3 billion (2.7 months of import cover) at end-December, 2022. We are yet to reflect IMF/WB and Cocoa syndication of approximately $2 billion by year end.
  2. The current account turned positive at 1.1 percent of GDP at end-June 2023, a monumental turnaround from the deficit of 2.1 percent of GDP at end-December 2022. Likewise, the trade balance improved to a surplus of 2.6 percent of GDP as of end-August 2023, from 0.7 percent of GDP surplus at end-December 2022.
  3. Though interest rates moderated from December 2022 to the first quarter 2023, they picked up again as T-bills remained the key debt instrument in the debt market after the DDEP. For instance, the 91-day Treasury declined from 35.5 percent in December 2022 to 18.5 percent in March 2023, but increased to 29.8 percent as of Monday, 13th November, 2023.

vii. The Overall budget deficit on commitment basis as of end-August 2023 was a deficit of 3.0 percent of GDP, outperforming the targeted deficit of 4.6 percent of GDP. The outturn largely reflects improvement in revenue mobilisation and slower execution of expenditure. The corresponding primary balance on commitment basis was a deficit of 0.7 percent of GDP, also outperforming the target surplus of 0.9 percent of GDP.

viii. Public debt accumulation has slowed down significantly, as Government continued to consolidate its public finances, and also reflects the impact of the domestic debt exchange programme, and the ongoing external debt restructuring. Total public debt has declined from 73.1 percent of GDP at the end of 2022 to 66.4 percent of GDP as of September, 2023. The completion of external debt restructuring is expected to further improve Ghana’s debt situation. Fiscal Developments 15 Summary of Fiscal Performance January-August 2023

  1. Mr. Speaker, the 2023 fiscal framework was revised during the 2023 Mid-Year Fiscal Policy Review to reflect updated macro-fiscal developments and align with the fiscal adjustment path under the IMF-supported PC-PEG path.
  2. Mr. Speaker, the fiscal performance for the first eight months of the year, using provisional data, shows significant progress toward a stronger fiscal consolidation. More specifically:
  3. Total Revenue and Grants was GH¢79.1 billion (9.3 percent of GDP), 2.8 percent lower than the programmed target of GH¢82.2 billion (9.6 percent of GDP);
  4. Total Expenditure (Commitment) was GH¢104.6 billion (12.2 percent of GDP), 14.1 percent lower than the target of GH¢121.8 billion (14.2 percent of GDP);

iii. Primary Expenditure (Commitment) was GH¢84.7 billion (9.9 percent of GDP), 6.0 percent lower than the target of GH¢90.1 billion (10.5 percent of GDP);

  1. Primary Balance (Commitment) was a deficit of GH¢5.5 billion (0.7 percent of GDP) compared to the target deficit of GH¢7.9 billion (0.9 percent of GDP);
  2. Overall Fiscal Balance (Commitment) was a deficit of GH¢25.4 billion (3.0 percent of GDP) compared the target deficit of GH¢39.6 billion (4.6 percent of GDP); and
  3. Overall Fiscal Balance (Cash) was a deficit of GH¢26.1 billion (3.0 percent of GDP) compared the target deficit of GH¢44.6 billion (5.2 percent of GDP) IV. 2024 AND MEDIUM-TERM OVERALL MACROECONOMIC TARGETS
  4. Mr. Speaker, based on the overall macroeconomic objectives and the mediumterm targets, the following macroeconomic targets are set for the 2024 fiscal year: i. Overall Real GDP growth of at least 2.8 percent; ii. Non-Oil Real GDP growth of at least 2.1 percent; iii. End-Period inflation rate of 15.0 percent; iv. Primary Balance on Commitment basis of a surplus of 0.5 percent of GDP; and v. Gross International Reserves to cover not less than 3.0 months of imports. Fiscal Sector in 2024 and the Medium Term
  5. Mr. Speaker, the 2024 and medium-Term fiscal framework has been prepared in line with the objectives and policy priorities of our 3-year IMF-Supported PCPEG. The Primary Balance on commitment basis is the fiscal anchor we are using to assess our fiscal effort. Over the medium-term, we plan to improve the primary balance (commitment) from a deficit of 4.3 percent of GDP in 2022 to a deficit of 0.5 percent of GDP in 2023. The primary balance is expected to improve further to a surplus at 0.5 percent of GDP in 2024 and to 1.5 percent of GDP from 2025 onwards. Resource Mobilisation for 2024
  6. Mr. Speaker, Total Revenue and Grants is projected at GH¢176.4 billion (16.8 percent of GDP) and is underpinned by permanent revenue measures largely Tax revenue measures amounting to 0.9 percent of GDP. Resource Allocation for 2024
  7. Total Expenditure (commitment) is projected at GH¢226.7 billion (21.6 percent of GDP). This projection reflects a reduction of 6.1 percentage points of GDP in total expenditures (commitment basis) relative to the outturn in 2022. This large decrease comes from the combination of fiscal consolidation efforts of 4.9 percentage points of GDP, reflecting an adjustment in revenue by 1.0 percentage point and primary expenditure by 4.0 percentage point of GDP. The potential interest rate saving from the ongoing external debt operation will further bolster public finance sustainability. Budget Balances and Financing Operations for 2024
  8. Mr. Speaker, based on the estimates for Total Revenue & Grants and Total Expenditure (including arrears clearance), the overall Budget balance to be financed is a fiscal deficit of GH¢ 61.9 billion, equivalent to 5.9 percent of GDP. The corresponding Primary balance is a deficit of GH¢5.9 billion, equivalent to 0.6 percent of GDP. Revenue Measures Property Rates
  9. Mr. Speaker, the Ministry of Finance, acting through the Ghana Revenue Authority (GRA) as per Section 4 of the Ghana Revenue Authority Act, 2009 (Act 791), introduced the property rate reform project. The objective was to develop a unified common platform capable of billing, collecting, and reporting property rates nationwide. 17
  10. The statistics highlight the impact of this initiative. The number of billable properties has seen a substantial increase, with a pre-2023 count of 1.3 million properties escalating to 12.42 million representing an 856 percent surge in properties identified that can now be properly billed. Similarly, the identification of registered persons and entities associated with billable properties has increased by 831 percent, from 186,542 to 15.68 million.
  11. Bills are currently available online for properties that have been successfully identified.
  12. Despite these achievements, the initiative has encountered some challenges thus making it difficult for the relevant bodies including the Metropolitan, Municipal and District Assemblies to have access to their share of the property rate collections on time.
  13. Mr. Speaker, to address these challenges, Government is reviewing the overall structures and processes to determine the optimal way forward. In the interim, Districts will resume collection until these challenges are resolved. Tax Reliefs
  14. Mr. Speaker, our approach to tax policy since 2017 was to give significant relief to the private sector until expenditure pressures from 2020 required a more aggressive approach. It is important to note that in the short-term, fiscal sustainability requires that we improve our tax ratios significantly otherwise, our long-term competitiveness will be eroded. As we all know, our country’s 13 percent tax-to-GDP ratio is far below our peers. Our target is 18-20% and we are on course.
  15. In that regard, it is difficult to implement all the structural reforms and tax reliefs needed to immediately lower and/or eliminate certain tax handles. However, I assure this August House, that we have heard, we believe in lower taxes for industry, and we are working at this aggressively with the GRA and to be cemented with the standing committee of the Mutual Prosperity Dialogue.
  16. Mr. Speaker, further to the above, the following reliefs have been prioritised for implementation:
  17. Extend zero rate of VAT on locally manufactured african prints for two (2) more years;
  18. Waive import duties on import of electric vehicles for public transportation for a period of 8 years;

iii. Waive import duties on semi-knocked down and completely knocked down Electric vehicles imported by registered EV assembly companies in Ghana for a period of 8 years; iv. Extend zero rate of VAT on locally assembled vehicles for 2 more years;

  1. Zero rate VAT on locally produced sanitary pads;
  2. Grant import duty waivers for raw materials for the local manufacture of sanitary pads;

vii. Grant exemptions on the importation of agricultural machinery equipment and inputs and medical consumables, raw materials for the pharmaceutical industry;

viii. A VAT flat rate of 5 percent to replace the 15 percent standard VAT rate on all commercial properties will be introduced to simplify administration.

  1. To address the negative externalities of plastic waste and pollution, Government will review and expand the Environmental Excise Duty to cover plastic packaging, and industrial and vehicle emissions.
  2. Mr. Speaker, the Stamp Duty Act, 2005 (Act 689) has not been reviewed since its enactment in 2005. To realign the rate with current economic realities, Government, in 2024, will review the rates and fees for stamp duties. The bands subject to ad valorem taxes will be expanded while the specific rates will be reviewed upwards.
  3. A simplified tax return will be introduced as a means of promoting voluntary compliance as part of the modified taxation scheme for individuals in the informal sector. This approach will make it easier for taxpayers to fulfil their tax obligations to the State.
  4. Mr. Speaker, the Tripartite Committee has concluded negotiations on the National Daily Minimum Wage. The tax-free portion of the Individual Income Tax rates will accordingly be adjusted to take care of the change. Government recognises the constraints our medical personnel face in providing health care for our citizens. With the passage of the Exemptions Act, Government will engage the Ghana Medical Association on waivers for importation of vehicles to ease the transportation burden of our doctors. This policy will enable them to deliver quality and timely healthcare.
  5. Mr. Speaker, as a Government, we have always been committed to protecting the quality of life of our people. Total Wages and Salaries for workers has increased from GH¢14.7 billion in 2016 to GH¢37.5. All workers were paid full wages and salaries and on time, even when revenues plummeted during the COVID-19 Pandemic. In the difficult economic challenges, we paid 15 percent 19 Cost of Living Allowance (COLA) for 6 months in 2022 to cushion 949,122 workers, some 50 percent more than 2016. Expenditure Measures Spending Arrears Clearance and Prevention Strategy
  6. Mr. Speaker, as reported in the 2023 Mid-Year Fiscal Policy Review of the 2023 Budget Statement and Economic Policy of Government, a Spending Arrears Clearance and Prevention Strategy was developed and approved by Cabinet for implementation. This is part of the measures to achieve the objective of bringing public finances back on a sustainable path through improved efficiency in public spending.
  7. To clear the existing stock of arrears, the Ghana Audit Service has begun the verification and validation of the arrears identified as at end-December 2022 before payments are made.
  8. Mr. Speaker, to prevent the accumulation of new arrears, Government has put in place the following measures to enhance commitment controls and prevent the accumulation of arrears.
  9. Alignment of the quarterly budget allotments with cash flow forecast and tighten the use of allotments as a control on the GIFMIS rather than the budget starting with the 2024 budget.
  10. MDAs will be required to revise their cash plans on a quarterly basis to reflect the allotments received over the year and remaining requirements. The Cash plan module on Oracle Hyperion will be reconfigured by December 2023 after completing all stakeholder engagements, in line with the system’s functionalities, which will be deployed to the various MDAs. MDAs will be trained on how to use the system to enable them to update their cash plans quarterly. This will ensure that MDAs are able to revise their cash plans within the window provided.
iii. Standardize contracts for public works to ensure flexibility in budget execution.
  1. Review standard tender documents to include clauses that make the award of the contract null and void if not supported by GIFMIS generated PURCHASE ORDER.
  2. All MDAs will be required to use GHANEPS for all Procurements to enhance transparency and efficiency in the procurement of goods, works, consultancy, non-consultancy, and asset disposal.
  3. Improve Budget Execution practices by undertaking the following:
  4. Approval of MDAs commencement requests to be done within the first quarter of any fiscal year to allow MDAs sufficient time to complete procurement and payment processes before end of year;
  5. Enforcement of the use of GIFMIS for all transactions to prevent unbudgeted expenditure.

vii. Internal Audit Agency to ensure that public officers within covered entities adhere to the legal and regulatory principles governing public financial management in the discharge of their duties.

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