Full bond recovery within two years – Fin Min assures
Dr. Mohammed Amin Adam, Minister for Finance, has assured investors that the restructured bonds are showing strong signs of recovery, restoring the value of investments in the next one to two years.
“The new bonds are trading very well on the market. Those who have lost value should now be making some gains,” he said during the Ministry of Finance’s Economic Update on Tuesday. “Over the next one or two years, as our bonds consolidate, they will be laughing to the bank. I sincerely believe so.”
Dr. Adam emphasised that the economic rebound is a result of deliberate policies and measures. “This recovery is not by accident. With the rate of recovery we are seeing, I do not have any doubt that those who have lost money will recover,” he stated, urging continued confidence in the economy.
“Let’s continue to build the confidence in this economy as we have been doing. Let’s continue to support this economy, all hands-on deck, so that we can build an economy that is good for all the people of Ghana and don’t forget that, we’ve travelled this IMF journey before.
“In 2016, by this time, the program had derailed but this year, an election year with a crisis influenced by external shocks, we have stayed the course. The IMF has just given us thumbs up that our economic management is really good and strong’’, he said
Advance Appropriation Expenditure
The Ministry of Finance has submitted its advance appropriation expenditure for the first quarter of 2025 to Parliament, aligning with its commitment to fiscal consolidation and economic recovery.
Speaking during a press briefing on Tuesday, Minister of Finance Dr. Mohammed Amin Adam stated that the proposal was consistent with the fiscal trajectory outlined for the coming year.
“The expenditure in advance of operation has been submitted to Parliament, and it fits for the consideration and approval of Parliament,” Dr. Adam said.
He, however, added that it will be premature to discuss the contents of the expenditure in advance of operation.
The advance appropriation provides for essential spending in the first quarter of 2025 while adhering to the government’s fiscal objectives.
According to Dr. Adam, “it was also prepared within the context of the fiscal path that we have for 2025”.
He reiterated plans to consolidate the fiscal balance, noting: “The 2025 fiscal year would ensure that we further consolidate the fiscal to improve the primary balance of commitment basis from the modest of what the minister talked about of 0.5 percent in 2024 and 1.5 percent in 2025”.
IMF and World Bank engagements
The nation’s economic strategy has seen significant international support, including the completion of the third review of its US$3billion Extended Credit Facility (ECF) programme with the International Monetary Fund (IMF). This achievement has unlocked a US$360million disbursement, raising total support to US$1.9billion.
Providing an update on the IMF programme, Dr. Adam said: “After a successful inter-staff level agreement with the IMF upon the 10th review on October 4, 2024, the IMF Executive Board yesterday overwhelmingly approved the 10th review of programme implementation given the strong performance that Ghana exhibited toward programme objectives and targets”.
Notably, Ghana met all six quantitative performance criteria and four indicative targets set for June 2024, marking a first in its IMF engagements.
However, challenges remain with World Bank funding. Dr. Adam noted that US$300million in World Bank support has yet to be disbursed due to delays in passing related agreements into law.
“The World Bank has not dispensed the money because those deals have not been passed into law; because Parliament is not working as it should,” he said, adding that “this is just one example of how the impasse in Parliament has affected the management of the economy.”
Economic recovery in focus
Despite these hurdles, the minister said the economy is on a recovery path, driven by growth in key sectors such as industry, agriculture and ICT. Real GDP growth reached 6.9 percent in the second quarter of 2024, up from 4.7 percent in the first quarter and 3.8 percent in the last quarter of 2023.
“The first half of 2024, therefore, recorded an average growth rate of 5.8 percent, the highest in the past five years,” Dr. Adam noted.
“Our growth has been largely influenced by the ICT digitalisation,” he said.
Structural reforms
The government has also implemented wide-ranging structural reforms in public financial management, revenue optimisation and social protection to stabilise the economy. These measures aim to address vulnerabilities exposed during the pandemic and restore macroeconomic stability.
“We have since been implementing key fiscal, monetary and real sector policies as well as structural reforms to achieve these objectives and to address the difficulties that the economy faces,” Dr. Adam said.
While the government has made significant strides, it faces lingering risks. These include election-related uncertainties, energy sector challenges and concerns over debt management, particularly Treasury bills.
Dr. Adam reassures stakeholders, stressing the government’s commitment to its fiscal objectives.
“We are within the budget, and we will make sure that we achieve the fiscal objectives for the budget year,” he asserted.