Mr Stephen Ntim, Chairman of the ruling New Patriotic Party (NPP) was in Parliament to listen to the presentation of the 2022 Mid-Year Review Budget Statement and Economic Policy and Supplementary Estimate of Government.
Technocrats who were also in attendance were Dr Ernest Addison, the Governor of the Bank of Ghana (BoG) and his First Deputy Dr Maxwell Opoku-Afari, Mr Kwasi Kwaning-Bosompem, the Controller and Accountant-General, and Mr Patrick Nomo, the Chief Director of the Ministry of Finance.
The Budget Statement was an abridged version of the Mid-Year Fiscal Policy Review of the Budget Statement and Economic Policy of the Government of Ghana for the 2022 Financial Year.
The Minister recalled that on 17th November 2021, he 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.
He noted that Ghana’s macroeconomic targets were designed to get the country back to a path of debt sustainability and increased growth; adding that these targets were underpinned by an aggressive programme to mobilise GH¢100.5 billion in revenues and grants.
“With the estimated total expenditure of GH¢137.5 billion, we aimed to achieve an overall budget deficit of 7.4 percent for the year 2022,” Mr Ofori-Atta said.
He said this was against the backdrop that economic growth had recovered from 0.5 per cent in 2020 to 5.4 per cent in 2021, and the fiscal deficit had declined from 14.7 per cent in 2020 to 11.4 per cent in 2021.
He said while the prospects for 2022 were encouraging, our plans, like many other countries in the world, went awry.
Touching on rapid unforeseen challenges, the Minister said: “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”.
He said the deferment of the passage of their 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.
He said these happenings had led to severe pressures on the Cedi, which caused the currency to depreciate significantly.
Mr Ofori-Atta said 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,” the Minister said.
“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.”
He said this situation was quite a painful one for him to report to the House.
“It is hard to see our people lament about the prices of basic commodities.
These are difficult times for the 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.” Mr Ofori-Atta said.
“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.”