Seventh Ghana Economic Update

Kwakye, Kwabena Gyan; Corral Rodas, Paul Andres; Elmaleh, David; Sebastian, Ashwini Rekha

Seventh Ghana Economic Update

Autores

Kwakye, Kwabena Gyan

Corral Rodas, Paul Andres

Elmaleh, David

Sebastian, Ashwini Rekha

Editor

Washington, DC: World Bank

Descripción

Ghana’s economy entered a full-blown crisis in 2022, after having rebounded from the COVID-19 slowdown in 2021. In response to the macroeconomic challenges, the authorities enacted some fiscal adjustment in 2022 but fell short of their consolidation targets; the 2023Q1 fiscal deficit (cash) was within target. Expenditure consolidation and revenue mobilization continued to be hampered by structural constraints. To address these unsustainable domestic and external imbalances, the authorities embarked on a comprehensive debt restructuring operation. Against the backdrop, growth is projected to decelerate further in 2023-24, before picking up in the medium-term. The government has embarked on an ambitious fiscal consolidation plan: however, delivering on it will require addressing long-standing revenue mobilization and budget control weaknesses. In 2023, the authorities intend to finance the fiscal deficit from multilateral (and other official) sources, in the context of the International Monetary Fund (IMF) - supported program, and from the domestic treasury bills (T-bills) market. In addition, leveraging government programs to build up resilience against vulnerability is an imperative and should not be suspended during the crisis. Beefing up the government’s payments through the livelihood empowerment against poverty will be critical. Second, support for food self-sufficiency is needed in Ghana (a goal for many countries now due to the global food crisis), while opening the country to generate more export revenues. The Ghana Tree Crops Diversification Project can serve as a critical puzzle piece of the country’s current challenges. The project will support poverty alleviation while setting the country up to generate more foreign revenues in the medium to long-term.