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Mid-Year Fiscal Policy Review of the 2022 Budget Statement and Economic Policy

Mid-Year Fiscal Policy Review of the 2022 Budget Statement and Economic Policy

Right Honourable Speaker, Honourable Members of Parliament, I stand before you on the authority of His Excellency, President Nana Addo Dankwa AkufoAddo to present the Mid-Year Fiscal Policy Review of the Budget Statement and Economic Policy of the Government of Ghana for the 2022 Financial Year

Today’s presentation is in fulfilment of Section 28 of the Public Financial Management Act, 2016 (Act 921) and Regulation 24 of the Public Financial Management Regulations (L.I. 2378).

 A Programme for a Promising Year

Mr. Speaker, on 17th November, 2021, I presented the Government's programme to “Build a Sustainable Entrepreneurial Nation” anchored on Fiscal Consolidation and Job Creation in the 2022 Budget- the “Agyenkwa” Budget. Our macroeconomic targets were designed to get us back to a path of debt sustainability and increased growth.

These targets were underpinned by an aggressive programme to mobilise GH¢100.5 billion in revenues and grants. With estimated total expenditure of GH¢137.5 billion, we aimed to achieve an overall budget deficit of 7.4 percent for the year 2022. This was against the backdrop that economic growth had recovered from 0.5 percent in 2020 to 5.4 percent in 2021, and the fiscal deficit had declined from 14.7 percent in 2020 to 11.4 percent in 2021. While the prospects for 2022 were encouraging, our plans, like many other countries in the world, went awry.

Rapid Unforeseen Challenges

 Mr. Speaker, the impasse in Parliament and subsequent developments after the presentation of the Budget in November 2021, both global and domestic front, have created enormous challenges for our economy. The deferment of the passage of our proposed revenue measures undermined the credibility of our Budget, leading to heightened investor concerns, credit rating downgrades and closed access to the international capital markets. These happenings have led to severe pressures on the Cedi, which caused the currency to depreciate significantly.

Additionally, in February 2022 Russia invaded Ukraine, a situation that worsened the already weakened global supply chains, exacerbated by high financing conditions, the surging food, fertiliser, financing, building materials and fuel prices -that manifested in soaring inflation domestically. These have had a debilitating toll on the cost and standard of living of our people.

Mr. Speaker, food prices are rising, fuel and transport fares are up, the cost of borrowing for businesses and households has increased, the cedi has depreciated and the economic outlook has darkened significantly.

Mr. Speaker, this state of affairs is quite a painful one for me to report to you. It is hard to see our people lament about the prices of basic commodities. These are difficult times for Government and indeed for the Finance Minister. It is agonising to hear our food producers complain about the cost of hauling foodstuffs from farm gates to market centres. This is not how we envisioned the economy. This is not what we planned and worked hard for. Recent challenges have overtaken us. Our duty is to work through these challenges and overcome them and is exactly what keeps the President and his Team awake at night.

In the wake of the COVID-19 pandemic and as part of measures to ensure the safety of all our stakeholders,
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