The Minister of Finance, Dr Cassiel Ato Forson, has said the erstwhile Akufo-Addo government left the Ghanaian economy in deep crisis coupled hard hit debts coupled and other fiscal challenges. According to him, the Mahama administration inherited a large accumulation of Ministries, Departments and Agencies (MDA) arrears/payables, energy sector financing shortfalls and large fiscal risks from the cocoa and financial sectors.
“Mr. Speaker, we inherited an economy in deep crisis, hard hit with debt and beset by other fiscal challenges such as large accumulation of MDA arrears/payables, energy sector financing shortfalls, and large fiscal risks from the cocoa and financial sectors”.
This was captured in the 2025 Budget Statement and Economic Policy of President Mahama presented by the Minister Finance on Tuesday, 11th March, 2025.
The Member of Parliament for the Ajumako Enyan Essiam constituency also claimed that weak commitment control systems and reckless public spending have reversed the progress made in fiscal consolidation even under the IMF-supported Programme which commenced in 2023.
Dr Forson in his presentation said notwithstanding the gains made under the IMF-supported Programme, [that was achieved through the painful sacrifice of domestic bondholders, external creditors and taxpayers], the economy remains in distress.
In addition, the Minister highlighted that all structural benchmarks due by end December 2024 are likely missed and inflation worsened in 2024 from 23.2% in 2023 to 23.8% in 2024.
“Mr. Speaker, key performance indicators to be assessed by the IMF staff in the upcoming 4th review of the Programme scheduled for April 2025 such as the primary balance (commitment), inflation, and social protection spending for end-December 2024, are likely missed” he stated.
Dr Forson noted the 2024 end-period inflation also exceeded the budget target of 15% by 8.8 percentage points and the IMF central target of 18% by 5.8 percentage points, intimating that this has triggered a discussion with the IMF under the Monetary Policy Consultation Clause.
He added the primary balance on commitment basis worsened from a deficit of 0.2% of GDP in 2023 to a deficit of 3.9% in 2024 and the primary balance on commitment basis target for 2024 was a surplus of 0.5% of GDP. “Sadly, the previous government recorded a deficit of 3.9% of GDP. This represents a slippage of a whopping 4.4 percentage points” he indicated.
