Ghana’s economy is projected to rebound strongly next year at 5.7 percent after the economy has suffered the deleterious shocks from the COVID-19 pandemic in 2020.
According to the finance minister, the strong rebound of economic activities in 2021 will be a result of the government’s implementation of the Transformation and Revitalization phase of the Ghana CARES (Obaatanpa) Programme.
This, he indicated in the 2021 budget statement presented on the floor of the house on October 28, 2020.
Mr. Ofori-Atta stated that the robustness of the country’s macro-economic fundamentals and the efficacy of the Government’s COVID-19 mitigation measures have been borne out by recent indicators.
He pointed out that, surveys conducted by the Bank of Ghana in August 2020, shows that consumer confidence is bouncing back strongly and is currently above pre-COVID-19 lockdown levels. Business confidence, the minister said, “has also increased, although below pre-lockdown levels”.
Also, Mr. Ofori-Atta indicated that about 95 percent of businesses surveyed showed strong optimism, reflecting the improving macroeconomic conditions, stability in the exchange rate, lower input prices, moderation in lending rates, and positive industry prospects.
“This and other assessments provoke a degree of optimism and reveal that the swift, bold, and effective measures implemented by Government have been key in quickening the pace of economic recovery”.
“Accordingly, the projected GDP growth rate of 2020 reported in July has been revised from 0.9 percent to 1.9 percent to reflect these dynamics. As the Bank of Ghana stated ‘the green shoots of a rebound in economic activity’ are already with us”.
On the contrary, the IMF projects a 0.9 per cent growth for Ghana in 2020, which the Fund expects to rebound at 4.2 per cent in 2021.
Mr. Ofori-Atta assured the House that the current government will recover, revitalize, and transform the economy. He stated further that the country will leverage on the AFCFTA headquarters in Accra for Ghana to become a dynamic regional hub.
“We have planted the seeds for a fast-paced and more inclusive recovery. Recognizing the role of capital and credit, we are certain that the cleaned-up and revitalized financial sector will support our recovery efforts and sustain growth”.
The finance minister further stated that the country’s new strengthened financial ecosystem will facilitate credit and investment to the private sector.
He highlighted some of the programs and policies that the current government has implemented in its first term of office to strengthen the financial ecosystem.
“We have established the Ghana Incentive-based Risk Sharing System for Agricultural Lending (GIRSAL) to facilitate lending to the Agricultural sector, the Ghana Amalgamated Trust (GAT) to support indigenous participation in the banking sector, the Ghana Commodity Exchange (GCX) to modernize Agricultural transactions and provide security for our farmers.
“The Ghana Deposit Scheme (GDS) to protect depositors funds, the National Housing and Mortgage Finance Scheme (NHMFS) to provide mortgages to our working-class and middle-class citizens, the 2 billion cedi Credit Guarantee Scheme (CGS) to support large businesses, and the CAPBUSS scheme run by NBSSI to support MSME’s amongst others, to sustain and complement these reforms”.
He added that the government has also established a National Development Bank which already has commitments of over 500 million USD as a wholesale bank to further support these financial institutions.
Based on the finance minister’s presentation on the floor of the house yesterday, 2021 will see significant investment in infrastructure, especially affordable housing, which according to him, will create more jobs and enhance artisanal skills.