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Economic growth will not slump - Terkper

Dec. 21, 2016, 12:19 p.m.

Finance Minister Mr Seth Terkper has expressed optimism that there will be no reversal in the growth of the economy following the several investment and prudent policy measures put in place by the government.

“Over the past four years, we have been following a path of fiscal consolidation from developments that go back into the four earlier years which bore out major policy issues like the single spine that came into existence around 2009.

“This path of consolidation we had indicated in major presentations a few months back has led to a turnaround. We are convinced that Ghana is in a turnaround and the economic indicators all point to a clear turnaround,” he said.

Mr Terkper, who was addressing his last in a series of periodic press conferences as the Minister of Finance in Accra yesterday, said the purpose of the conference was also to update stakeholders on the performance of the economy.

Gains made

Still touting the gains made in the economy under his watch, he said: “We were supposed to bottom out at 3.5 per cent of GDP growth; we bottomed out at 3.9 per cent, and in the first and second quarters, GDP performance, as well as the stabilisation of indicators like debts and the reduction of the fiscal deficits, suggest clearly that Ghana is not going to see a reversal of the gains consolidated.”

He indicated that Ghana was not going to see a reversal of the gains provided it continued on the path of fiscal prudence.

Mr Terkper expressed the government’s confidence about the future, saying it looked very bright.

He also projected that the country’s economy could grow from 6.5 per cent to nine per cent.

“Again, these are not accidental. They are the result of investments that were made, particularly in the oil and gas sector, notably the partial risk guarantee provided by the World Bank, which has secured the country’s investments and has seen the second floating production, storage and offloading (FPSO) unit commissioned and a third one which is about 85 per cent complete,” he said.

Why no recession

He stressed that the operation of three FPSOs, a strong service sector and a rebound in the agricultural sector showed that Ghana’s economy would not experience a recession.

He also indicated that the fiscal consolidation had seen a reduction in deficit from nearly 12 per cent to 6.3 per cent at the end of 2016 and a narrowing of the primary balance from 8.2 per cent deficit in 2012 to 0.2 per cent at the end of 2016.

The rate of debt accumulation had also significantly narrowed, with the rate of growth of debts showing a decline, he said, indicating that the debt stock had stabilised in the last three years at 70 per cent of GDP.

“And this will be the first time in 12 years that the rate of growth of Ghana’s debt stabilised and reversed and the stock itself stabilised around 70 per cent for the third year running. This is a very significant development,” he stated.

He said as a result of the prudent fiscal measures of the government, the rate charged on treasury bills had reduced from 24 per cent to 16.7 per cent and hoped the drop rate would be sustained.


The Finance Minister, however, reiterated some challenges faced by the country, such as gas shortages, coupled with a rise in crude oil prices.

He said no fuel shortage had been experienced in the country and expressed the hope that there would be no increase in transport fares during the Christmas period.

Reforms and initiatives

Mr Terkper also outlined tax administration reforms, revamped tax laws and special initiatives such as the Public Financial Management (PFM) Act 2016, the Ghana Integrated Financial Management Information System (GIFMIS), the establishment of the Ghana EXIM Bank and budget and financing measures which had contributed to the growth of the economy.

Answering some questions from journalists, he gave an assurance that the Stabilisation Fund was not being depleted, as was being alleged, but was used to support the economy when oil prices fell on the world market.

He also said the Sinking Fund had been established to stabilise the economy, while GH¢2.2 billion of the Volta River Authority (VRA) debt had been paid by the government, which was negotiating for the second tranche of the debt to be paid soon.