Deputy Finance Minister, John Kumah has hinted that the government would not be seeking financial assistance from the international market to manage the economy this year.
Speaking on JoyNews’ Newsfile, Mr. Kumah noted that the government has put in place measures to cater for its expenditure without relying on the international market for assistance.
Aside from raising revenue domestically, the Deputy Minister said the government has put aside $750million out of $1billion it received from the International Monetary Fund (IMF) as Ghana’s Special Drawing Right (SDR).
According to him, that is approximately the amount needed by the Akufo-Addo-led government to meet its target expenditure for 2022.
“In 2022, the government is looking more within to raise the financing. The good news for Ghana is that the IMF gave Ghana Special Drawing Right (SDR) $1billion dollars and we spent $250 million of that in last year’s budget. We still have $750million sitting in Ghana.
So we don’t have to go out to the market to borrow. We have factored that and all the external financing we are looking at is just about $750 million for us to be able to achieve the expenditure target for 2022.
We think that we have enough capacity within our domestic market to be able to raise enough financing to achieve the budget target.”
His comment comes as a response to concerns by citizens after International rating agency, Fitch, downgraded Ghana’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘B‘ from ‘B-’ with a negative outlook.
Fitch in their report noted that “Government’s ability to deliver unplanned fiscal consolidation effort could be hindered by the heavy reliance on domestic debt issuance with higher interest cost in the context of an already exceptionally high-interest expenditure to revenue ratio.”
But Mr. Kumah disagreed with the agency’s findings as to the country in 2017, sought no assistance from the international market to meet its expenditure target.
“That is where we disagree with Bloomberg, Fitch, and some of these rating agencies. It appears that if Ghana says that we are not going to the international market, then we don’t have an alternative to finance our expenditure in this country.
This is not the first time Ghana has not gone on the market. In 2017, Ghana didn’t go on the market and yet we met our expenditure target and revenues. They have their doubts but one year is not far away. Just like they doubted us in 2021, we delivered.”
The Deputy Finance Minister emphasized that “an economy growing above 5 percent in Covid and meeting its revenue target cannot be said to be having a negative outlook.”
“I believe that if this is the basis of concern for them to be rating us at the levels that they are doing, we are very surprised,” he added.
Meanwhile, John Kumah, who is also the MP for Ejisu, has assured the public that government will continue to manage the economy in the best interest of its citizens.
“We are all entitled to disagree but I want to assure the country that irrespective of other people’s lack of confidence in us, we have strong confidence in our ability to deliver the best and manage the economic affairs of Ghana in the best of means possible. All the targets we have set for 2022 shall be met by the grace of God,” he stated.