Budget 2023: Fiscal consolidation and revenue mobilization must be key – Razia Khan

Chief Economist and Head of Research at Standard Chartered Bank, Razia Khan, said Ghana’s 2023 budget must focus on fiscal consolidation programs and large-scale revenue mobilization measures.

Ms Khan added that there must be spending cuts to help restore investor confidence in the economy and also demonstrate the government’s commitment to take bold steps to stabilize the economy.

She revealed it in an interview with ENTERPRISE JOY in London.

She advised the government to demonstrate Ghana’s debt restructuring plans.

“There should be attempts by the government to curb the growth of spending looking at what has happened in the country with respect to local financing issues over the past few months,” she said. declared.

Turning to debt servicing, Ms Khan said there was a need for the government to show how it intends to service the debt in the budget as “most market participants will use this to infer what the plan is. in debt restructuring”. .

“This could be very necessary due to the impact of the rising inflation rate on the economy over the past few months,” she said.

Khan on Ghanaian Cedi and inflation rate

Ms. Khan suggested a further hike in the key rate by the Bank of Ghana to help stabilize the cedi and slow the rate of inflation.

The advice comes as the Bank of Ghana’s Monetary Policy Committee is meeting to review developments in the economy.

The meeting, which began on Monday, November 21, is scheduled to end on Friday, November 25, 2022. Committee Chair Dr. Ernest Addison is expected to announce the decision on Monday, November 28, 2022.

Ms Khan argued that a tightening of liquidity might be needed, as well as a further increase in the liquidity ratio reserves due to its impact on the local currency and the rate of inflation.

“Inflation is something that affects all Ghanaians, so the authorities’ efforts should really focus on what is needed for stabilization to take place,” she said.

Government on the presentation of the 2023 budget

Finance Minister Ken Ofori-Atta revealed earlier that the 2023 budget will focus on fiscal adjustment programs, value for money and will be influenced by the outcome of ongoing negotiations with the International Monetary Fund for an economic program.

The government is also expected to come up with programs that will help tackle the country’s budget deficit as well as the country’s outstanding debt.

Ghana’s outstanding debt is now over 402 billion yen at the end of July 2022.

Some economic watchers have predicted the 2023 budget will be “tight”, with some already describing it as an austere budget.

An official familiar with the presentation noted that the government will also want to demonstrate its commitment to consolidating public finances on the basis of other programs.

“We will also come up with initiatives that will demonstrate the government’s commitment to value for money next year,” a source said.

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