Since the proposed debt exchange programme will allow government to save a portion of the budgeted interest costs for 2023, these funds must be redirected to productive programmes, Director of the Institute of Statistical, Social and Economic Research (ISSER), Professor Peter Quartey, has said.

Government has requested that holders of domestic debt voluntarily swap around GH¢137billion of the domestic notes and bonds of the Republic under its Ghana Domestic Debt Exchange Programme for new instruments on a different term agreement.

Once concluded, this will provide government with some breathing room in its budget as it plans to reduce domestic interest costs, which are projected to be GH¢31.29billion in 2023 out of a total of GH¢52.55billion.

At a post-2023 budget meeting, Professor Quartey said: “With this, our debts are going to come down once they make those savings. Therefore, the interest payments can be channelled into some of the programmes that have been outlined in the budget.

“For instance, you’ve seen some funds earmarked toward agriculture; but when you look at the 2023 budget, we’re going to spend so much at about GH¢18billion on the education sector – less than agriculture and industry. So going by what I see, quite a good proportion will go into education; but also some will go into other critical sectors.”

He further noted that economic growth will be impacted by the lack of capital investment among other factors.

“Growth is not going to be as high as we’ve been witnessing, because it takes investment to grow. In the past we have relied on external sources and foreign capital to invest in infrastructure for capital expenditure. Unfortunately, that avenue is virtually closed to us for a while; and therefore we are only going to spend 1.8 percent of our GDP on investments. So, growth is going to stifle,” he said.

“But having said that, if we are able to sign onto an IMF programme and we get on track, I believe there’ll be other donors who come on board as well as some bilateral partners and we can revise some of these figures in investment and manufacturing,” he stated.

Focus on agriculture

The Director called for a special focus on agriculture as the sector remained resilient during major shocks like COVID-19.

“Although these numbers are not very impressive when compared with the other sectors, we note here that the sector was very resilient during major shocks like COVID-19. Moving forward, attention should be paid to processing and food storage infrastructure to ensure food security,” he said.

Primarily, the Planting for Food and Jobs (PFJ) initiative – which started in 2017 to provide subsidised inputs to farmers – continues to be a conduit for growing the agricultural sector. In 2023, the agricultural sector is projected to grow by 2.6 percent as against 0.7 percent in 2022.