Finance Minister, Ken Ofori-Atta has denied recent reports suggesting that the government may be planning a second round of DDEP with pension funds, a move that has caused concern among pension fund holders.
In response to these reports, the Minister of Finance for Ghana, Ken Ofori-Atta, has sought to clarify the government’s position, emphasizing that the government’s pension funds were exempted from the DDEP in line with the memorandum of understanding (MoU) signed with Organised Labour in December 2022.
Speaking at the IMF/World Bank Spring Meetings in Washington DC, Ofori-Atta noted that the government is in discussions with Organized Labour on how to maintain the country’s debt sustainability process and reduce debt servicing costs further.
The finance minister emphasized that these discussions are ongoing and that the government is exploring options such as cocobills and domestic dollar bonds.
He further added that the government is committed to maintaining debt sustainability, as outlined in the MoU signed with Organised Labour.
However, Mr. Ofori-Atta stated that the presentation was taken out of context when he proffered an explanation to the investors.
The Minister’s comments have helped to allay concerns among pension fund holders and clarify the government’s commitment to debt sustainability.
The government’s ongoing discussions with Organised Labour suggest that it remains committed to addressing the country’s debt challenges and ensuring a stable economic future for Ghana.
Finance Minister Outlines Key Measures In Securing IMF Fund
Mr. Ken Ofori-Atta has outlined five key measures necessary for the government to pursue in order to secure an International Monetary Fund (IMF) support programme.
Speaking during the Investors Presentation by the Finance Minister and supported by the Governor of the Bank of Ghana, Dr. Ernest Addison, Mr. Ken Ofori-Attah noted that these measures include electricity tariff hikes – which have brought the cumulative increase to 60% since August 2022, Comprehensive set of revenue enhancing measures including increase in the Value Added Tax rate and the review of the Electronic Transaction Levy (E-levy).
The rest, as stated by the finance minister, are the enactment of an ambitious 2023 Budget, with a frontloading of the fiscal consolidation programme, continued monetary policy tightening to bring inflation under control and comprehensive set of structural reforms, notably public expenditure review.
With regard to fiscal and debt sustainability, the Finance Minister said the government has undertaken fiscal adjustment with revenue and expenditure measures to improve debt sustainability and restore macroeconomic stability.
This, according to the Mr. Ken Ofori-Attah, is expected to address structural bottlenecks including contingent liabilities of State Owned Enterprises, commitment controls and arrears accumulation as well as domestic revenue mobilization.
On monetary and financial sector reforms, Mr. Ofori-Atta said government is committed to rebuilding reserve buffers, mobilize external concessional financing from multilateral and bilateral partners, and suspend external debt service payments.
With regard to social protection and structural reforms, the Finance Minister pointed out that government will safeguard social protection programmes and ensure the burden of adjustment is fairly distributed.
“Again, it will reinforce and improve the targeting of social spending to protect the most vulnerable from the impact of the economic crisis as well as fast-track the implementation of growth-oriented socio-economic policies, such as Ghana CARES to mitigate the impact of the pandemic and support economic recovery.”
Mr. Ken Ofori Atta
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