The first Deputy Governor of the Bank of Ghana (BoG), Dr Maxwell Opoku-Afari, has said the cut in government expenditure this year will not dampened the growth of the economy.
The Ministry of Finance recently announced policy to cut expenditure by 20 per cent across board this year, as part of the government consolidation programme.
Dr Maxwell Opoku-Afari said this in response to a question on the impact the cut in expenditure will have on the economy for the 2022 fiscal year, during a press conference in Accra on Monday to brief the press on government engagement with both onshore and offshore investors to update then on country’s economic performance and outlook.
He said though the slash in expenditure will have some impact on some sectors of the economy, it will not necessarily thwart the growth of the economy.
The programme organized by the Ministry of Finance also provided opportunity for the government to respond to the questions and concerns of investors who have invested in the Ghanaian economy.
The concerns of the investors bordered on government decision to cut expenditure by 20 per cent across board, 2021 economic performance, E-Levy and economic performance and outlook.
He indicated that the cut in expenditure formed part of the government’s fiscal measure to correct the imbalances in the economy arising through growing inflation and debt.
The First Deputy Governor indicated that inflation was going up globally due to the effects of the coronavirus.
Dr Opoku-Afari explained that the efforts and to reduce the fiscal deficit and efficiencies being introduced government in the use and management revenue would help boost the economy.
“The stimulus packages provided by the government to businesses last year to cushion them of the effect of the coronavirus will help boost the economy,” he said.
Dr Opoku-Afari said the BoG would introduce monetary policy measures to promote economic stability and growth of the country.
Quizzed why the government did not use the $750 million Special Drawing Rights out of the budgeted financing of $1.5 billion for 20220 to boost the reserves of the BoG, the First Deputy Governor said explained that the amount was part of the reserves of the BoG.
Dr Opoku-Afari indicated that the amount was also to support government meets its fiscal obligations and finance the budget.
He said most of the Africans which accesses the SDRs used part as budgetary support to help prop up their economies.
The Minister of State at the Finance Ministry, Charles Adu-Boahen commenting on the SDR said it had capacity to finance half of the government external financial obligations and the economy was not in economic distress as reported in some section of the media.
He also said the domestic capital market had the capacity to meet the financing needs of the government for the 2022 fiscal year.
BY KINGSLEY ASARE