Ghana ‘in excessive threat of debt misery’: Finance minister | Debt Information

Minister Kenneth Ofori-Atta says depreciation of the cedi ‘critically affecting’ Ghana’s means to handle its public debt.

Ghana is at excessive threat of debt misery and has agreed on a debt administration technique with the Worldwide Financial Fund (IMF), finance minister Kenneth Ofori-Atta mentioned on Thursday.

Ofori-Atta is in the course of negotiating a aid bundle with the IMF because the West African nation faces its worst financial disaster in a era.

“The present debt sustainability evaluation performed reveals that Ghana is now thought of to be in excessive threat of debt misery,” the minister instructed lawmakers throughout his presentation of the 2023 price range.

“Authorities and the IMF have agreed on programme goals, a preliminary fiscal adjustment path, debt technique and financing required for the programme,” he mentioned, including he hopes to succeed in a deal “very quickly”.

The depreciation of the Ghanaian cedi was “critically affecting” the nation’s means to handle its public debt, which has elevated to $48.9bn this yr, he instructed parliamentarians, saying the foreign money has misplaced greater than 50 p.c of its worth.

“Our inventory of debt has elevated by 93 billion Ghana cedis ($7bn) this yr alone as a result of depreciation of the cedi because the starting of 2022.”

Ghana will implement a debt change programme to deal with the challenges, he mentioned.

Financial progress is predicted to sluggish to three.7 p.c of gross home product (GDP) in 2022 from 6.7 p.c final yr, and to sluggish additional to 2.8 p.c in 2023, he mentioned.

Ofori-Atta has confronted requires dismissal from each the governing social gathering and opposition who accuse him of financial mismanagement. Final week, he apologised for the nation’s financial hardship however defended himself towards their claims.

“I acknowledge our financial system is dealing with difficulties and the individuals of Ghana are enduring hardships,” he mentioned final Friday. “Because the particular person President Akufo-Addo has put in command of this financial system, I really feel the ache personally, professionally, and in my soul.”

On Thursday, Ofori-Atta mentioned Ghana would impose a debt restrict on non-concessional financing amongst different reforms, and can concentrate on utilizing financial coverage to manage inflation, which has exceeded 40 p.c.

The federal government will freeze new tax waivers for international corporations and evaluation tax exemptions for mining, oil and fuel corporations. It should additionally freeze hiring for civil and public servants, he mentioned.

Nonetheless, Ofori-Atta didn’t supply any cuts to spending on flagship programmes, and detailed a swath of infrastructure venture expansions reminiscent of highway enlargement.

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