President Akufo-Addo has formally admitted that Ghana is currently facing an economic crisis which has exposed the weakness of the economy.

However, the President on Sunday, October 30, noted that the government has been able to pinpoint the causative agents disrupting its balance of payments and debt sustainability. "We are in a crisis, I do not exaggerate when I say so.

I cannot find an example in history when so many malevolent forces have come together at the same time," he said. "But, as we have shown in other circumstances, we shall turn this crisis into an opportunity to resolve not just the short-term, urgent problems, but the long-term structural problems that have bedeviled our economy,” the President added.

He listed some five measures his government would be implementing to turn around the adverse impact the COVID-19 pandemic and the ongoing Russia and Ukraine war has had on the economy. President Akufo-Addo stated that the pandemic exposed government’s inability to effectively cushion Ghanaians against a crisis, therefore, his administration will be “improving the revenue collection effort, from the current tax-revenue to GDP ratio of thirteen (13%) to between eighteen and twenty percent (18-20%)”.

This, he believes will enable Ghana to be competitive with its peers in the West Africa Region that have been able to provide for its citizenry during tough times. “The GRA is rolling out an extensive set of measures to support this enhanced revenue mobilisation.

All of us must do our patriotic duty, and support the GRA in this exercise,” he implored. Due to the lack of funds to mitigate the effects of increased fuel prices that has been worsened by the geopolitical war, government has had to borrow to provide to the ordinary Ghanaian.

This has worsened Ghana’s debt sustainability. To mitigate this, the President disclosed that the government will “reduce our total public debt to GDP ratio to some fifty-five percent (55%) in present value terms by 2028, with the servicing of our external debt pegged at not more than eighteen percent (18%) of our annual revenue also by 2028.”

The President is hopeful of restoring and sustaining macroeconomic stability within the next three to six years, with a focus on ensuring debt sustainability to promote durable and inclusive growth while protecting the poor.

Also, the President added that his administration will among other things, review the reforms in the energy sector, capping of statutory funds, implementation of the exemptions Act and a new property rate regime.

According to him, the government has again decided also to continue with the policy of thirty percent (30%) cut in the salaries of political office holders including the President, Vice President, Ministers, Deputy Ministers, MMDCEs, and SOE appointees in 2023, just as it will continue with the thirty percent (30%) cut in discretionary expenditures of Ministries, Departments and Agencies. Economists and financial experts have been bemoaned the current state of the economy which is import driven.

The President mentioned that this has had a toll on the growth of the economy, in view of this has decided to check the country’s high importation. “We will review the standards required for imports into the country, prioritise the imports, as well as review the management of our foreign exchange reserves, in relation to imports of products such as rice, poultry, vegetable oil, tooth picks, pasta, fruit juice, bottled water and ceramic tiles, and others which, with intensified government support and that of the banking sector, can be manufactured and produced in sufficient quantities in Ghana.

Government will, in May 2023, that is six months from now, review the situation,” the President added. President Akufo-Addo stressed although his government believes in free trade, it must work to ensure that the majority of goods in the shops and marketplaces are those are produced and grown here in Ghana. Meanwhile, President Akufo-Addo has not ruled out the role of the International Monetary Fund in the recovery of the economy.

He noted that the economic management team is working towards reaching a deal with the IMF by the end of the year. “This will give further credence to the measures Government is taking to stabilize and grow the economy, as well as shore up our currency,” he confirmed.

Source: The Independent Ghana