Mahama: Ghana's economy has made “significant” progress

Ghana has made “significant” progress in growing its economy despite encountering some “short-term” challenges, President John Mahama has told foreign investors in Berlin, Germany on Tuesday January 20, 2015.

Among the challenges listed by the President as “major constraints” at the investment forum are a budget deficit of 12 percent recorded in 2012, which according to him was reduced to 10.2 last year.

Mr Mahama said his Government is aiming at reducing the deficit to 7.6 percent by the end of 2015.

He nonetheless said “significant progress” has been made by his Government in resolving these challenges caused by a decline in commodity prices between 2011 and 2012.

According to him, a slump in the prices of gold and cocoa, which reduced export revenues by almost $2 billion also contributed to the short-term difficulties.

Despite these challenges, the President said Ghana’s economy is expected to grow “strongly” at 5 percent of real GDP in 2015 and continue to be “robust” over the medium term as a result of increased oil and gas production, sustained political stability, increased private sector development and improved public infrastructure.

“I can say despite these challenges we have made significant progress in terms of Ghana’s economic development.

“The implementation of prudent fiscal policy responses and reforms as well as the redirection of public expenditure has contributed to stabilising the economy. As you may be aware, these measures have started yielding results already and the Cedi that has seen a significant decline has in recent times stabilised significantly.”

He said an expected programme from the International Monetary Fund (IMF) would further help stabilise the economy.

“We’ve been in discussions with the IMF to implement a three-year stabilisation programme. The negotiations have been going on since last year and most of the issues that we have been discussing in the negotiations with the IMF have already been incorporated in the budget for 2015, which is currently being implemented already.

“I anticipate that in the next several weeks, we should be able to conclude agreements with the IMF. There are a few outstanding issues we are working on and that is concluding a wage agreement with labour for 2015. Discussions are far advanced and I expect that hopefully by this week, latest next week, we should be able to announce an agreement with labour on the wage bill,” Mr Mahama said.

Mr Mahama is in Germany for a two-day visit. He held meetings with the Federal President and Chancellor Angela Merkel Monday.