Economist and Political Risk Analyst, Dr. Theo Acheampong, has underscored the significance of the 2023 budget statement in addressing the plethora of challenges facing the country.

According to him, the budget will signal to the international community the government’s commitment and strategy to fix the broken economy sustainably. He warned that should the budget fail to do so appropriately, it could translate into a total loss of confidence from the international community which will further worsen the plight of the economy.

“That budget is what is going to signal to all of us whether the government is really determined to fix this problem and to put the economy on a sustainable footing going forward.”
Dr. Theo Acheampong

Dr. Theo Acheampong noted that players from the international community will be taking into keen consideration how the government deals with certain issues including revenue mobilization and expenditure cuts.

“So, everybody is expectant and everybody is looking out for what is communicated in the budget on raising revenue; on the expenditure side of things; how we’re going to address the deficit and the financing of that deficit.

“What role will the Central Bank play within all of this in terms of the inflation targeting framework; and what sort of other social mitigating support package will the government offer to citizens and at what cost? All of these are issues that many market participants and many observers and people like myself, are actually looking out for in the 2023 budget.”
Dr. Theo Acheampong

IMF agreement and Budget statement

Dr. Theo Acheampong cautioned that there cannot be a disconnect between the budget statement and the staff-level agreement from the IMF which is projected to be reached by the end of this year.

According to him, should that happen, it would fuel even more uncertainty thus, further damaging the economy.

“Because ultimately, if the budget is read and we’re talking of a staff-level agreement by December or early January, what that will do is to send a strong signal or confidence to the market participants or players that what you would expect in that staff-level agreement wouldn’t be any different from what you’re actually seeing in the budget.

“If you have a disconnect between the two, so let’s say the budget is read and the staff-level agreement is agreed and you see a massive disconnect between the budget and the staff-level agreement, there will still continue to be that uncertainty because those numbers do not reflect the reality.”
Dr. Theo Acheampong

Meanwhile, Information Minister, Kojo Oppong Nkrumah, has assured that the negotiations are moving smoothly and that the measures will be contained in the 2023 Budget statement.

Ghana is currently experiencing one of the most challenging economic times in recent years. Ghana’s economy is characterized by unsustainable debt stock and debt servicing cost, rising inflation and fuel prices which the government has blamed on the COVID-19 as well as the Russia-Ukraine war.

Other difficulties confronting the country as it heads into the 2023 fiscal year include anemic economic growth, high unemployment, severe currency depreciation, deteriorating gross international reserves and a looming public debt crisis.

In a recent statement, Tesah Capital also called for a transparent budget with realistic targets that will go a long way to guide expectations, not only for creditors, but also the public. It noted that the 2023 budget should be one that is prudent in spending and efficient in the use of public funds.