The Finance Minister has admitted that the economic outlook of the country “has darkened significantly”, a development that is making life unbearable for citizens.

Mr Ken Ofori-Atta said on Monday, July 25, that the cost and standard of living of Ghanaians have been badly hit by a number of factors that were least anticipated by the government.

“Food prices are rising, fuel and transport fares are up, the cost of borrowing for businesses and households has increased, the cedi has depreciated and the economic outlook has darkened significantly.

“This state of affairs is quite a painful one for me to report to you. It is hard to see our people lament the prices of basic commodities. These are difficult times for government and, indeed, for the Finance Minister,” he told Parliament.

He attributed the delay in passing proposed revenue measures by government as one of the major reasons for the current state of the economy.

This, according to him, caused heightened investor concerns, credit rating downgrades and closed access to the international markets.

“Additionally, in February 2022, Russia invaded Ukraine – a situation that worsened the already weakened global supply chains, exacerbated by high financing conditions, the surging food, fertiliser, financing, building materials and fuel prices – that resulted manifested in soaring inflation domestically.”

The Finance Minister underscored that the government never envisioned the economy to be struck by these unforeseen local and international factors.

“This is not what we planned and worked hard for. Recent challenges have overtaken us. It is agonising to hear our food producers complain about the cost of hauling foodstuffs from farm gates to market centres.

“Our duty is to work through these challenges and overcome them and that is exactly what keeps the President and his team awake at night,” he highlighted.

No request for supplementary funds

Government says it will use the windfall from the upstream petroleum sector to make up for its revenue shortfall in the 2022 budget. 

Mr. Ofori-Atta said the government will not request supplementary funds for its activities for the rest of the year.

Although he lamented the impact of the external factors that have crippled the revenue sectors of the economy, he insisted that government will judiciously use the scarce resources at its disposal for the benefit of Ghanaians.

“We have seen some major shifts in our budget assumptions compared to November 2021, when we presented the budget. These changes have led to reduced revenues, increased interest payments and changes in interest rates and exchange rates.

"However, we are committed to staying within the appropriation for 2022. In spite of the underperforming revenues and strong external headwinds, we are not seeking additional funds in this mid-year review."

According to him, the government will not renege on doing that for the betterment of the ordinary Ghanaian.