Ghana’s economy continues to demonstrate resilience and progress towards macroeconomic stability and growth, according to the Minister of Finance, Dr. Mohammed Amin Adam.
Addressing the media on Thursday, Dr. Adam emphasized the government's commitment to improving the lives and livelihoods of Ghanaians while mitigating the impact of policy adjustments on the poor and vulnerable.
Dr. Adam highlighted that the economy expanded by 4.7% in the first quarter of 2024, a significant improvement compared to the 3.1% growth recorded in the same period of 2023.
This growth surpasses the revised annual growth target of 3.1% for 2024, signaling robust economic activity.
Although the Ghana Statistical Service has yet to release the half-year GDP data, the Bank of Ghana's Composite Index of Economic Activity (CIEA) shows a sustained pickup in economic activities, with the real CIEA recording an annual growth of 3.3% in May 2024, up from 2.1% in the first quarter.
In response to the ongoing economic challenges, the government has bolstered its social protection programs to safeguard the poor and vulnerable.
Dr. Adam noted that the Livelihood Empowerment Against Poverty (LEAP) Programme, the National Health Insurance Scheme (NHIS), the Ghana School Feeding Programme (GSFP), and the Capitation Grant Programme have all seen increased allocations.
Specifically, LEAP benefits have been doubled, with transfers rising from GH¢50 million in 2016 to GH¢428.8 million in 2023, and further to GH¢720 million for 2024.
The GSFP and Capitation Grant allocations have also been increased by 25% for the 2024 financial year.
The Minister also reported progress in reducing inflation, which has been on a downward trajectory since 2023.
Inflation decreased to 20.9% in July 2024, down from 22.8% in June 2024, driven by a deceleration in both food and non-food prices.
Food inflation dropped to 21.5% in July from 24.0% in June, while non-food inflation declined to 20.5% from 21.6% in the same period.
The disinflation process is attributed to the Bank of Ghana’s tight monetary policy stance, strong fiscal consolidation efforts, and improved exchange rate stability.
On the currency front, the Ghanaian cedi has shown relative stability against major trading currencies since 2023, despite some recent pressures.
The cedi's depreciation against the US dollar improved from 54% in November 2022 to 27.8% in December 2023.
The year-to-date depreciation moderated to 7.7% in the first quarter of 2024, compared to 22.1% in the same period in 2023.
As of June 2024, the cedi had depreciated by 18.6% against the dollar, and by 21.5% as of August 26, 2024, showing an improvement compared to the 22.1% depreciation recorded in the same period in 2023.
The cedi's relative stability is supported by the Bank of Ghana's monetary policies, the gold-for-oil programme, and positive market sentiments following the disbursement of the third tranche of the IMF Extended Credit Facility.
Dr. Adam outlined several expected inflows that are anticipated to further stabilize the currency and improve the supply of foreign exchange.
These include a projected US$360 million following the successful conclusion of the upcoming third review of the IMF programme, an expected US$300 million from the World Bank’s Development Policy Operation 2 (DPO2), and the completion of external debt restructuring.
Interest rates have also witnessed a decline since the beginning of 2024, with the 91-day and 182-day Treasury Bill rates standing at 24.79% and 26.68%, respectively, as of August 26, 2024, down from the peaks of 29.4% and 31.95% recorded in December 2023.
Dr. Adam assured that the government's fiscal consolidation program is progressing smoothly, with total revenue and grants for the January-July 2024 period amounting to GH¢89.4 billion, 0.7% above the programmed target.
This represents a nominal year-on-year growth of 27.5%, reflecting the government's commitment to achieving fiscal and debt sustainability.
Dr. Mohammed Amin Adam reaffirmed the government’s commitment to navigating the economic challenges while prioritizing the well-being of Ghanaians.
He expressed optimism that the ongoing economic measures would continue to yield positive results, ensuring sustained growth and stability for the nation.
Story by: Joshua Kwabena Smith
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