2024 Mid-Year Budget review: A comprehensive breakdown (1)
IN an era marked by global economic volatility, Ghana's 2024 Mid-Year Budget Review, presented by Dr. Mohammed Amin Adam, MP, Minister for Finance, reflects a determined stride towards economic stability and growth.
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This mid-year review provides an in-depth look at the fiscal policies, economic achievements, and future initiatives of the Ghanaian government.
The speech not only outlines the current state of the economy but also sets the stage for continued fiscal consolidation and development in the latter half of the year.
Below, we delve into the key aspects of the budget review, highlighting significant achievements and planned initiatives.
Key ingredients
1. Economic recovery and growth
1.1. Growth performance
Ghana's economy has demonstrated remarkable resilience, recording a growth rate of 4.7 per cent in the first quarter of 2024.
This figure surpasses the revised target of 3.1 per cent, indicating a robust recovery and a positive economic trajectory. The industrial sector, particularly, has been a significant contributor, with a growth rate of 6.8 per cent.
1.2. Inflation control
Inflation has been a critical challenge for Ghana, but recent measures have shown promising results. As of June 2024, inflation has decreased to 22.8 per cent, a significant drop from the peak of 54.6% in December 2022. This reduction has been attributed to tight monetary policies and fiscal consolidation efforts by the government.
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1.3. Exchange rate stability
The exchange rate has relatively stabilized, with the Cedi's depreciation rate against the US Dollar improving from 22.0 per cent in June 2023 to 18.6 per cent in June 2024. This stability is crucial for maintaining investor confidence and ensuring economic predictability.
1.4. International reserves
Ghana's gross international reserves have improved significantly, reaching a level that covers 3.1 months of imports by June 2024, up from 2.5 months the previous year. This improvement is vital for buffering the economy against external shocks.
2. Government measures and achievements
2.1. Debt restructuring
The government has successfully concluded the Debt Restructuring Programme with the Official Creditor Committee, resulting in approximately $2.8 billion in debt relief. This agreement, covering $5.1 billion, is a cornerstone of Ghana's economic recovery strategy.
2.2. IMF extended credit facility
The completion of the second review of the IMF Extended Credit Facility led to the disbursement of $360 million, bringing total disbursements to about $1.6 billion. This support is crucial for stabilizing the economy and implementing growth-enhancing initiatives.
2.3. Infrastructure development
Significant investments have been made in infrastructure, including the construction of roads, hospitals, and airports. Projects such as the Komfo Anokye Teaching Hospital and the Tema-Mpakadan Railway Line are at various stages of completion, underscoring the government's commitment to enhancing public infrastructure.
2.4. Social programmes
The government has continued its investment in social programmes, with substantial funding directed towards education, healthcare, and social protection. Initiatives such as the Free SHS programme and the Livelihood Empowerment Against Poverty (LEAP) scheme highlight the focus on improving the quality of life for all Ghanaians.
3. Fiscal performance
3.1. Revenue and expenditure
For the first half of 2024, total revenue and grants amounted to GH¢74.7 billion, with total expenditures at GH¢95.9 billion. This fiscal performance underscores the government's efforts to manage public finances prudently while maintaining essential public services and investments.
3.2. Debt management
As of June 2024, Ghana's central government debt stood at GH¢742.0 billion, equivalent to 70.6 per cent of GDP. This figure includes both external and domestic debt, with efforts ongoing to manage and restructure debt to ensure fiscal sustainability.
4. Future outlook and initiatives
4.1. Revenue mobilisation
The government plans to enhance revenue mobilisation through improved tax compliance and the introduction of new tax measures. The Ghana Revenue Authority's performance has already exceeded midyear targets, reflecting the successful implementation of these strategies.
4.2. Digital transformation
Digitalisation remains a priority, with significant investments in the National Identification Program and the deployment of the Ghana. Gov Payment Platform. These initiatives aim to streamline government services and improve efficiency.
4.3. Infrastructure projects
Ongoing infrastructure projects, such as the Accra-Kumasi highway and the Nsawam-Ofankor Road, are critical for boosting economic activity and connectivity. The government is committed to completing these projects to facilitate trade and enhance regional integration.
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4.4. Social interventions
The 2024 Mid-Year Budget Review highlights the government's continued commitment to social protection and human capital development through substantial investments in various social programmes. These initiatives aim to improve the quality of life for all Ghanaians, particularly the most vulnerable populations.
The key areas of focus include the Ghana School Feeding Programme, the National Health Insurance Scheme (NHIS), the Livelihood Empowerment Against Poverty (LEAP) programme, and several other social interventions. Below is a comprehensive and detailed breakdown of these initiatives:
