Ghana’s New Authorities Vows to ‘Repair’ Financial system and Curb Inflation

(Bloomberg) — Ghana’s new authorities outlined a decrease finances deficit this yr to offer a basis for financial restoration after a painful debt restructuring.

Finance Minister Cassiel Ato Forson instructed lawmakers within the capital, Accra on Tuesday that his aim for the West African nation’s main finances stability, which excludes debt-service prices, can be a surplus of 1.5% of gross home product.

That represents a big shift from 2024, when the earlier administration missed its aim for a small surplus and recorded a main deficit of three.9% of GDP.

“The state of our economic system is troubling, however we’ll repair it,” he instructed lawmakers as he delivered his maiden finances. “It’ll require some sacrifices, truthfulness, transparency and self-discipline.”

President John Mahama vowed to “reset” the economic system after he gained December elections. Voters backed him over the prior administration in anger over sky-high inflation and poor financial administration, which pressured Ghana to hunt an Worldwide Financial Fund bailout after defaulting in 2022.

“We inherited an economic system in deep disaster,” Forson mentioned. “An economic system arduous hit with debt.”

Ghana’s $3 billion IMF program has helped curb wild swings within the cedi because it was granted in Could 2023, whereas inflation has slowed from a peak of about 54% to 23.1% in February. Forson mentioned the federal government would intention to decrease inflation to 11.9% by the tip of the yr.

Financial progress accelerated to five.7% final yr, pushed primarily by authorities spending and mining output, from 3.1% the yr earlier. Forson forecast 4.4% progress in 2025.

–With help from Yinka Ibukun.

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