Governor of the Bank of Ghana, Dr. Ernest Addison
• Government is expected to present the 2022 budget in November this year
• The central bank is calling for a reset of fiscal policy measures
• Government in its 2021 budget envisaged a fiscal deficit of 13.9% of GDP
Governor of the Bank of Ghana, Dr. Ernest Addison, has said the upcoming presentation of the 2022 budget statement should be used to rest fiscal policy measures.
According to him, this would help towards the creation of a credible path towards medium-term fiscal sustainability.
Speaking at the 2021 Ghana Economic Forum in Accra, Dr. Ernest Addison said, “This would be an important building block to establish and entrench credibility, a key component to stability.”
“The relatively strong performance of the economy despite COVID-19 was due to homegrown policy credibility that had been earned over four years of economic reform. The Fiscal and Monetary Policy Framework that was implemented provided a solid anchor to disinflation. Policy credibility engendered investor confidence which underpinned the significant inflow of capital both portfolio and direct during this period.”
He continued, “These measures placed the Ghanaian economy in a good place prior to the pandemic and the necessary policy space to undertake the countercyclical policies that allowed the economy to stay on course.”
Meanwhile, the outlook of Ghana’s fiscal position has been described as not been impressive prior to the emergence of the coronavirus pandemic, by Dr Adu Owusu Sarkodie, an economist and research fellow at the Institute of Fiscal Studies.
The government 2021 budget statement envisages a fiscal deficit of 13.9 percent of GDP in 2021. This includes energy and financial sector costs and a gradual medium-term fiscal adjustment expected to support a decline in the public beginning 2021.
The project is however facing some uncertainty due to risks associated with large financing, increasing public stock and shocks from the COVID-19 pandemic.