Theme: Investing in people, investing in jobs Macroeconomic Developments

Focus: Growth and Employment.

Macro Developments of the Economy

HIPC Accounts-Receipt and Approvals for Spending

Sovereign Credit Rating

Multilateral Debt Cancellation Initiative (MDCI)

2006 Macroeconomic Projections

Sectoral Performance

Accelerated private sector-led growth

Human Resource Development

Good Governance

Poverty Reduction Expenditures

Policy Initiatives for 2006

Personal Income Tax Reliefs

Employment Generation

Revenue Enhancement and Rationalisation

Public Sector Pay Reforms

Pensions Reforms

Free Ride on Metro Mass Transit for School Children

Implementation Challenges

Monitoring and Evaluation

Execution of Civil Works Contracts

Results-focused Frameworks



Macro Developments of the Economy

• GDP Growth has grown consistently from 3.7% to 6% in 2000 and 2006 respectively.

• Per Capita Growth rate has also increased consistently from 1.1% to 3.2% in 2000 and 2005 to 16.7% in March as a result of the 50% increase in petroleum prices in February.

• Inflation rose from 11.6% in January 2005 to 16.7% in March as a result of the 50% increase in petroleum prices in February.

• Inflation is currently down to 9.9% as at April 2006

• Nominal exchange rate depreciation has been stable in recent years.

• The cedi in 2005 depreciated by 0.4% against the US dollar, appreciated by 8.2% and 11.6% respectively against the pound sterling and euro.

• Domestic revenue is expected to be ¢24,116.2 billion, equivalent to 24.5% of GDP.

• Total tax revenues are projected to exceed the budget projection of ¢24,116.2 billion, equivalent to 24.5% of GDP.

• Total tax revenue is expected to be ¢21,027.8 billion by 2.3 per cent to reach ¢21,517 billion in 2005.

• The secondary reserve requirement was reduced from 35.0 per cent to 15.0 per cent.

• The Bank of Ghana Prime Rate was lowered on two occasions to stand at 155.5 per cent at end of September 2005.

• Two new BoG instruments-the 14-day and 28-day Bank of Ghana bills –were introduced in July 2005.


HIPC Accounts-Receipt and Approvals for Spending

• Since the inception of the HIPC debt relief initiative, Government has received a total of ¢4.59 trillion into the HIPC account and approved a total release of ¢4.52 trillion from the account to support poverty-related spending by the MDAs

Sovereign Credit Rating

• Ghana was rated B+ by S&P and B by Fitch in 2003,

• Ghana was upgraded to B+ by Fitch and re-affirmed B+ by S&P in 2004.

• Ghana is currently rated B+ by both Standard & Poors
(“S&P”) and Fitch Ratings.

Multilateral Debt Cancellation Initiative (MDCI)

• The debt cancellation proposed by the G-8 countries is expected to write-off over US$4.1 billion of debt outstanding owed to the World Bank under the International Development Association window, International Monetary Fund and the African Development Fund.


2006 Macroeconomic Projections

• Real GDP growth of at least 6 percent;

• A lowering of end of period inflation to single digit of between 7 and 9 per cent by end-year;

• Average inflation rate of 8.8 percent;

• A further accumulation for international reserves to a target of four months of import cover;

• Domestic primary surplus of 2.0 per cent of GDP; and

• An overall budget deficit of 2.1 per cent of GDP.


• For 2006-2008, Government is implementing the GPRS II which aims to achieve the following:

• Continued macroeconomic stability

• Accelerated private sector-led growth

• Vigorous human resource development

• Good governance and civic responsibility


Accelerated private sector-led growth

• Government, for the fifth year running, continued the Cocoa Diseases and pests Control Programme

• A total bonus of ¢161.0 billion was paid to cocoa farmers

• Ghana successfully hosted the 68 th Annual General Assembly and Council of Ministers Meetings of COPAL in Accra

Source: GNA – Ghana News Agency


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