A former Deputy Finance Minister, Dr Cassiel Ato Forson, says 2023 will present one of the toughest years for the Ghanaian economy.
Not only will the economy record one of the worst non-oil GDP growths, he predicts, but also the banking sector, local businesses and individuals will be adversely impacted by the haircuts on domestic bonds and Eurobonds.
Dr Ato Forson, who is also Member of Parliament for Ajumako-Enyan-Essiam Constituency and Ranking Member on the Finance Committee of Parliament, made this known in a New Year post on Facebook.
“Unemployment will worsen due to the freeze on employment, debt restructuring, poor business climate, and massive austerity,” he further wrote on Tuesday, January 3.
His observation comes in the wake of a similar caution by the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, that this year will be “tougher” than 2022.
“We expect one third of the world economy to be in recession,” Ms Georgieva said on the CBS news programme Face the Nation.
“Even countries that are not in recession, it would feel like recession for hundreds of millions of people,” she added.
Ghana is expecting a $3-billion extended credit facility (ECF) from the Fund to boost the economy.
But Dr Ato Forson predicts there will be layoffs, loan default payments, depreciation of the Cedi, and others before the IMF Executive Board even approves the facility.
“Ghana will default in the payment of interest and principal on domestic bonds, Eurobonds, and most of our bilateral loans in 2023. These will be compounded by the ff:
“Expected layoffs from the financial sector due to the impact of the debt restructuring and expected layoffs from gov’t foreign financed projects.”