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Business News of Friday, 21 February 2020

Source: Class FM

3-time under-5% fiscal deficit first time in 40 years – Akufo-Addo

President Nana Akufo-Addo has said Ghana, “for the first time in over 40 years”, has maintained “a fiscal deficit below five per cent of GDP for three years in a row”.

Delivering his State of the Nation Address to a one-sided Parliament on Thursday, 20 February 2020, Mr Akufo-Addo also said “in three years, we have reduced inflation to its lowest level (7.8% in January 2020) since 1992”.

“For the first time in over 20 years, the balance of trade (that is the difference between our exports and imports) has been in surplus for three (3) consecutive years.

“Our current account deficit is shrinking, interest rates are declining, and the average annual rate of depreciation of the cedi is at its lowest for any first term government in the Fourth Republic.

“Our economic growth has rebounded to place Ghana among the fastest growing economies in the world for three years in a row at an annual average of 7%, up from 3.4% in 2016, the lowest in nearly three decades”, the President said.

According to him, the international community has taken note of his government’s performance, “resulting in Ghana, today, being the largest recipient of foreign direct investment in West Africa”.

“The sovereign credit ratings agencies have upgraded our ratings, and also improved the outlook for this year, notwithstanding the fact that it is an election year.

“This is a massive vote of confidence in the current management of the economy, as best illustrated by Ghana’s successful issue of the longest-dated Eurobond ever issued by a sub-Saharan African country, with investors placing fifteen billion United States dollars ($15 billion) of orders for Ghana’s forty-one (41) year Eurobond.

“The seven (7) year Bond attracted the lowest coupon rates ever for Ghana at six point three-seven-five percent (6.375%), compared with the nine point two-five percent (9.25%) Ghana had to pay for a similar Eurobond issue in 2016. No wonder Bloomberg, the reputable global financial media house, earlier this week, highlighted Ghana as the top candidate for an economic leap in Africa.

“This expression of confidence is important because it will lead to enhanced investments in our economy, and the accompanying greater numbers of jobs”, he said.

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