Assessing Ghana’s economy ahead of mid-year budget review

Ghana's Finance Minister is set to present the country's mid-year budget review to Parliament today, ahead of the Monetary Policy Committee meeting scheduled for later this month. Samuel Kofi Ampah, Head of Research at Groupe Ndoum, shed light on the key issues expected to be addressed during this crucial financial update. As the Finance Minister addresses the nation, the focus is expected to be on the impact of the COVID-19 pandemic on the economy. Key areas of discussion will include an analysis of expenditure, revenue, and plans to address any financial gaps that have emerged in the 2020 budget. Additionally, a look towards the economic outlook for the second half of the year is anticipated. Former Finance Minister, Seth Terkper, raised concerns about discrepancies between Ghana's fiscal data and that reported by the International Monetary Fund (IMF). The mismatch in data, particularly regarding budget deficit and public debt figures, has prompted calls for a reconciliation of the country's financial statistics. Terkper highlighted the importance of aligning these figures to provide an accurate representation of Ghana's economic position. Inflation remains a critical point of discussion, with Ghana's June inflation rate dropping to 11.2%. While this marks a decrease, the country is still grappling with double-digit inflation levels. Achieving single-digit inflation had been a celebrated milestone for Ghana before the pandemic hit. Managing inflationary pressures and working towards the single-digit target will likely be a key focus for the Finance Minister's address. Looking ahead to the Monetary Policy Committee meeting, uncertainties loom amidst global economic challenges. Several central banks have opted to maintain their policy rates in response to the current economic climate. Ghana's NPC faces similar risks, including the potential impact of global demand on crude oil exports and foreign flows. The committee is expected to uphold existing monetary policy measures while providing clarity on the allocation of funds, notably the 10 billion support package earmarked for COVID-19 relief efforts. Overall, the mid-year budget review and NPC meeting will be pivotal in shaping Ghana's economic trajectory for the remainder of the year. Stakeholders eagerly await the government's plans to address the evolving financial landscape and chart a course towards sustainable growth.