Home News Ghana not facing imminent external imbalance, revenue shortfall – Finance Ministry

Ghana not facing imminent external imbalance, revenue shortfall – Finance Ministry


Finance Minister, Ken Ofori-Atta Finance Minister, Ken Ofori-Atta

Bloomberg report spells economic doom for Ghana

Finance Ministry denies claims

Ghana economy remains robust, Finance Ministry

The Ministry of Finance has debunked assertions that Ghana risk facing an imminent external imbalance and revenue shortfall.

This development comes after a January 13, 2022 report by Bloomberg described Ghana’s debt situation as moving into distress as investors were losing patience over the country’s huge debt.

The report said, “the West African nation’s [Ghana] dollar bonds have slumped 10% in 10 days, moving deeper into distressed territory as investors judge that re-financing debt in the Eurobond market won’t be an option when the Federal Reserve hikes rates and budget targets remain elusive.”

But the Finance Ministry in a rebuttal said the country’s reserves which is at over five times import cover, is well above its internal target of four months and better than the average over the previous two decades.

Financing of the 2022 budget of US$1.5 billion is also bolstered by the balance of Special Drawing Rights of approximately US$700 million.

The balance can be financed through the use of alternate instruments including term loans, bilateral and multilateral loan facilities and a tap-in of our domestic dollar bonds, amongst other.

In December 2021, the Ministry of Finance issued a 5-yeat domestic dollar bond at 6%. The bonds are currently trading at a yield of ~5.5% on the local market.

The Finance Ministry in its statement assured that the Ghanaian economy remains robust and on the path to rebound from the impact of the COVID-19 pandemic which depicts a healthy gross domestic product (GDP) of 6.6% for the third quarter alone as well as an average of 5.2% for the first three quarters of 2021.

“Ghana’s fundamentals remain strong as attested to by our growth in December the Ghana Revenue Authority (GRA) exceeding its target in 2021 and our strong reserves position.”

“Ghana will continue to show leadership in this difficult post COVID era to build a sustainable, entrepreneurial nation while ensuring that growth, job creation and fiscal consolidation are not compromised, in line with the President’s vision of a Ghana Beyond Aid,” portions of the statement read.

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