The 2023 budget will focus on fiscal consolidation, value for money and IMF contribution

The 2023 budget will be heavy on fiscal adjustment programs, value for money as well as the influence of the results of ongoing negotiations with the International Monetary Fund (IMF) for an economic program.

This is what Joy Business learned from people working on the budget.

In addition, the government is expected to come up with programs that will help tackle Ghana’s budget deficit and outstanding debt, which exceeds £402 billion through July 2022.

Government on the 2023 budget

Some financial watchers close to the government have said the 2023 budget will be “tight”, as some call it an austere budget.

Speaking at an engagement in Washington DC on the sidelines of the IMF and World Bank annual meetings, Minister of State at the Ministry of Finance Charles Adu Boahen said the government will demonstrate its commitment to achieving the fiscal consolidation.

“We will also come up with initiatives that will demonstrate the government’s commitment to value for money next year,” he said.

According to Mr. Adu Boahen, the measures that will be introduced in the budget will be influenced by the current economic environment.

“There will be no need for a budget revision when the IMF program takes full shape in the future,” he added.

When will the 2023 budget be presented?

Ghana’s Public Financial Management Act requires that the budget for the following year be presented one month before the end of the year.

This is to allow more time for debate and necessary approvals before the start of the new fiscal year.

It also aims to ensure that the government is able to secure the necessary approvals to raise revenue and spend on time.

Majority Leader in Parliament Osei Kyei Mensah Bonsu said the finance minister may not be able to present the budget on November 15, 2022.

According to him, the ongoing negotiations with the IMF risk delaying the presentation of the budget.

Meanwhile, Mr. Adu Boahen noted that the government hopes to conclude a favorable agreement with the IMF by the end of this year.

“The IMF team is so far satisfied with what the government of Ghana has offered to stabilize the economy,” he said.

He added that some of the policy measures captured in the government’s post-COVID-19 economic program are similar to some of the policy measures that were proposed by the IMF when negotiating the program with government officials.

Cedi depreciation and the economy

Mr Adu Boahen said the recent pressure on the cedi is due to speculation.

He assured that the Ministry of Finance and the Bank of Ghana are working to stabilize the foreign exchange market.

“The amount of dollar inflows that we have seen over the past few months is basically the same as the government got in previous years through the Eurobond,” Adu Boahene noted.

“Over the past month we have seen the Afrexim loan coming in as well as the cocoa loan syndication facility and this is similar to the Eurobond inflows that will normally come in during these times so fears that the country will not not having enough reserves should not be a problem”.

He argued that some reports in the media space also did not help stabilize the local currency.

He hopes that the necessary measures will be taken in the coming days with the managers of the monetary space to bring the situation under control.

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