Governor of the Bank of Ghana (BoG) Dr Ernest Addison has said that the Monetary Policy Committee noted that the budget statement for 2023 has set fiscal policy on a consolidation path.
He says this is consistent with key elements agreed with the International Monetary Fund (IMF) at the Staff Level in December 2022.
The domestic debt exchange programme launched by the government, new revenue measures, and structural fiscal reforms will provide significant reduction of debt service and help create fiscal space, Dr Addison stated.
Addressing the 111th Monetary Policy Committee (MPC) press conference in Accra on Monday, March 27, he said the fiscal outlook is contingent on financing of the budget and will require the conclusion of the domestic debt exchange programme as well as securing the requisite financing assurances from bilateral donors. Indications are that these discussions are proceeding well.
“Based on the above, it is imperative that Parliament prioritizes the passage of the revenue bills currently before it,” Dr Addison said.
He further intimated that under the Staff Level Agreement with the IMF, the Bank of Ghana and the Ministry of Finance have finalised a Memorandum of Understanding on zero financing to the budget, which will be signed shortly.
“The passage of the relevant revenue bills by Parliament will therefore conclude the required prior actions to advance Ghana’s programme to the IMF Executive Board.
“This will be critical in resetting the economy on the path of recovery, including putting it firmly on a disinflation path and sustained growth,” he said.
Last week, Finance Minister Ken Ofori-Atta, led a high-level delegation from the ministry to China to engage in bilateral talks with his Chinese counterpart and other Chinese officials.
The Finance Ministry said that Mr Ofori-Atta had very positive and encouraging meetings in China.
The Ministry said they were looking forward to securing external assurances very soon.
“So far had very positive and encouraging meetings in China! Looking forward to securing external assurances very soon, even as we pass our outstanding domestic revenue bills back home. Great progress on all fronts…#ResolvingTogether #GhanaFirst,” the Office of the Finance Minister tweeted on Friday.
Mr Ofori-Atta also mentioned to the Chinese Finance Minister Liu Kun the Domestic Debt Exchange Programme that has been introduced by the government as an indication that Ghana was ready to take the necessary action to readjust its fiscal path.
In response, Mr Kun said “we know that these are short-term challenges which we as responsible creditors remain committed to resolving” and that “the long-standing and prosperous relationship between Ghana and China imposes on us, a responsibility to help”.
The Chinese Finance Minister further said it was the hope of his country that Multilateral and Commercial creditors would also fully participate in the interest of burden sharing.
“Chinese authorities have confidence in Ghana’s economic management, and its long-term economic viability,” Mr Kun said.
He added “China believes in promoting debt sustainability and sustainable development,”
He said these when Mr Ofori-Atta, led a high-level delegation from the ministry to China to engage in bilateral talks with his Chinese counterpart and other Chinese officials.
By Laud Nartey|3news.com|Ghana