Exchange rate has stabilised despite recent pressures - Finance Minister
The Minister of Finance, Dr. Mohammed Amin Adam, says the country's exchange rate has largely stabilized despite recent pressures.
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Speaking during the 2024 mid-year budget review in Parliament on Tuesday, July 23, Dr. Adam highlighted a significant improvement in the exchange rate situation compared to December 2022.
He noted that the depreciation rate to the US Dollar was 18.6 percent as of June 2024, an improvement over the 22 percent recorded during the same period last year.
Additionally, he pointed out that Gross International Reserves had reached 3.1 months of import cover by the end of June 2024, compared to 2.5 months during the same period the previous year.
Dr. Adam also underscored that Ghana's economic growth has surpassed expectations. The Ghana Statistical Service reported a 4.7 percent growth rate for the first quarter of 2024, exceeding the revised target of 3.1 percent.
Moreover, the Finance Minister highlighted a decline in inflation. The end-June inflation rate stood at 22.8 percent, marking a reduction of 31 percentage points since December 2022. This decline confirms that achieving the target threshold of +/-2 of 15 percent by the end of 2024 is possible.
Dr. Adam expressed confidence in the government's economic policies, stating, "The economy is rebounding stronger than anticipated. The choices we have made and the policies we are implementing are yielding results. We have reversed the negative trends, and all the indicators are looking better. I want to assure you that we will stay on this path and continue to make the right choices. Our economic recovery is fast and strong."
Over the past six months, the government has accelerated the implementation of key programs and provided necessary support for growth-enhancing initiatives. Dr. Adam reported the successful conclusion of the second review of Ghana's Extended Credit Facility with the International Monetary Fund (IMF), leading to the disbursement of the third tranche of $360 million, bringing the total to about $1.6 billion.
He also detailed the completion of the Debt Restructuring programme with the Official Creditor Committee (OCC), covering $5.1 billion, which resulted in approximately $2.8 billion of debt relief. This means Ghana will not service its debt to official creditors from 2023 to 2026. Additionally, negotiations with Eurobond holders have been concluded, covering $13.1 billion, leading to a cancellation of $4.7 billion of debt and providing debt service relief of $4.4 billion between 2023 and 2026.
Dr. Adam further announced successful negotiations with five out of seven Independent Power Producers, resulting in savings of approximately $6.6 billion over the lifetime of the Purchasing Power Agreements (PPAs). He reported that expenditures have been controlled to stay within the 2024 Budget Appropriation, and midyear revenue targets were exceeded by 0.2 percent by the end of June 2024.
"In essence, we are living within our means," Dr. Adam stated. "Aligned with our IMF program, we are on track to achieving a primary surplus of 0.5 percent of GDP by the end of the year. We have cleared all outstanding Bank Transfer Advices (BTAs) up to 2022 and are working diligently to address BTAs from 2023."