Ghana still the second largest in West Africa with a GDP

Out- going President, John Dramani Mahama has reiterated that Ghana’s economy is still the second largest in West Africa with a Gross Domestic Product (GDP) of almost $39 billion.

He added that Ghana has also moved up thirteen (13) places in the ease of doing business index and is currently considered number one on the World Bank index.

President Mahama who was speaking in Parliament today at his last State of the Nation Address said his government inherited an economy that was running a high deficit, with increasing inflation and interest rates.

He added the economy as at that time was also characterized by a rapidly depreciating currency.

That unstable macro environment created an unfavorable investment environment for both indigenous and foreign capital which the Senchi was an attempt to forge a consensus for a homegrown fiscal consolidation program.

The Senchi outcome he said eventually became the basis for the IMF Extended Credit Facility (ECF) program which the National democratic government is currently implementing.

President Mahama affirmed that the ECF program has resulted in an improved macro environment which is seeing a steady decline in inflation and interest rates.

A new public debt management strategy according to him is also seeing a steady decline in Public sector debt, estimated to have dropped from nearly 72% to below 65%. The currency has also enjoyed relative stability, depreciating at just above 4% this year.

Meanwhile, he said while the deficit target will be missed this year on account of inability to meet revenue targets, it is important for us to continue to pursue fiscal consolidation in the 3rd and final year of the program.

Multiple causes he lamented are responsible for the inability to meet the target. Reduced lifting from the Jubilee field on account of the turret bearing problems, non-realization of some expected non-tax revenue such as the sale of electromagnetic spectrum, reduced cocoa export revenue and higher than expected election-related expenditures. In spite of the breach of the fiscal deficit target, expenditure was lower than programmed and thus the approved appropriation for 2016 was not exceeded.

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