Adu Boahen: We have addressed investors’ concerns about 2022 budget

The Minister of State at the Ministry of Finance, Charles Adu Boahen, has said that all the misunderstandings and miscommunication about the Ghanaian economy, which were of concern to investors, have been addressed.

According to him, this was made possible through the successful engagements between the Finance Ministry and the investor community.

He noted that the government deemed it necessary to speak directly with these investors and assure them of the steady progress being made towards economic rebound, anchored on fiscal consolidation and debt sustainability.

“These investors have assets under management in excess of over US$4 trillion, and they also actively participate in Ghana’s Eurobond Issuance Programme, and have been keenly following the Ghana development story,” he said.

“We have observed that Ghana’s Eurobonds spreads have started to tighten across the curve, meaning that the engagement was successful and had an impact,” he added.

Mr Adu Boahen made this known during a press briefing yesterday to inform the citizenry of the government’s engagement with both local and foreign investors, which began on Thursday, January 20,2022.

Clarity on the policy to cut 2022 expenditure by 20 per cent across board, 2021 economic performance and outlook, Ghana’s relationship with the IMF and whether Government intends to undertake any programme with the Fund, the status of the E-Levy Bill before Parliament, the 2022 revenue target and Government’s ability to meet this target were among the pressing concerns raised by the investors, according to the Minister.

Positive outlook

Mr Adu Boahen assured that Ghana’s Gross Domestic Product (GDP) growth continues to be robust, despite the challenging global economic environment.

“For Q3-2021, GDP growth stood at 6.6 percent compared to -3.2 percent for the same period in the previous year. The average growth rate of 5.2 percent for the first three quarters of 2021 has already exceeded the budgeted growth rate of 4.4 percent for the full year of 2021,” he said.

“Our projected sectorial GDP growth outcomes for the medium term (2022 – 2025), are expected to strongly rebound for all sectors.

“Our 2021 revenue and grants performance are on track to meet the target of 12 percent of GDP and is projected to increase to 15.4 percent of GDP in 2022 on the back of new tax policy measures,” he added.

On Ghana’s public debt, he disclosed that the provisional nominal debt figures had increased from GHC299.1billion at end 2020 to GHC344.5 billion as at end November 2021.

“The nominal increase is because of the financing of the 2021 budget deficit, exchange rate depreciation and its effect on the stock of external debt and disbursements of already existing loans. As a percentage of GDP, the figure for November 2021 is 78.4 percent as compared to 76.1 percent as at end 2020. Ghana is on track to achieve an end 2021 figure which is equal to or less than 80 percent of GDP,” he explained.

Additionally, he told pressmen that the government already has $750million special drawing rights (SDR) out of the budgeted external financing of US$1.5 billion for 2022.

“The rest would be financed from multilateral and bilateral sources and other instruments. In addition, the depth of the domestic market has improved in recent times and is capable of meeting the needs of government. Government is, however, mindful of the cost of borrowing from the domestic market,” he further explained.