Minister of Finance, Ken Ofori-Atta has expressed gratitude to Organised Labour and Employers for what he says was their role in concluding wage negotiation with Government in May.
He says the “negotiations were marked by a shared understanding of the state of the economy, that we cannot share what we do not have; a collective will to improve productivity, raise more revenue and ensure decent wages in the years to come.”
According to the Minister of Finance, Ghana took innovative, decisive and bold actions to tackle the Covid-19 crisis, which interventions he says stabilised the situation, protected lives, supported businesses and preserved jobs which would otherwise have been lost.
Appearing before Parliament on Thursday to present the mid-year budget review, he said although the workload from the public sector had to be reduced in many cases, Government never embarked on any programme of laying off workers all through the COVID crisis but “continued to pay all workers and even proceeded to employ more in some critical areas such as Security and Health services.”
The Finance Minister said the hardships that the “COVID-19 pandemic visited on people’s lives, the stress on parents, the frustrations of young people, the negative impact on businesses, for both employers and employees, the worsening of the unemployment situation, the effect on the public debt and the stress on revenue mobilization, was unprecedented as no country in the world had prepared for the crisis that unfolded.
“That is why, a year ago, on Thursday, 23rd July, 2020, I came before this House to present what I called an extraordinary Mid-Year Fiscal Policy Review of the 2020 Budget Statement and Economic Policy, and secured more funds to provide an immediate and appropriate response to the severe economic impact of the pandemic.”
He said additionally, the 2021 Expenditure-in-Advance-of-Appropriation presented to Parliament on 28th October, 2020, saw to the uninterrupted delivery of Government business in the first quarter of this year; and, the on-going implementation of the 2021 Budget and Economic Policy of Friday, 12th March, is revitalising the economy.
“With these approvals, we intervened with timely measures to help, particularly, households, schools, hospitals and businesses withstand the impact of the pandemic. Government provided direct transfers to households through food distribution and absorption of water and electricity bills. Tax waivers to frontline health workers and stimulus packages to small and medium-scale enterprises were also provided.”
Ken Ofori-Atta said as a result of government’s competent management of the crisis situation, Ghana’s economy has outperformed its peers and is recovering faster, explaining that after recording negative growth in the second and third quarters of 2020, the economy rebounded strongly in the last quarter of the year, continuing well into the first quarter of 2021.
“The Ghana Statistical Service reports that overall GDP growth for first quarter 2021 was 3.1 percent. The growth was even better excluding oil at 4.6 percent. The Bank of Ghana Composite Index of Economic Activity (CIEA) attests to the strong growth recovery, with the index growing at 33.1 percent at the end of May 2021 compared to a contraction of 10.23 percent at the end of May 2020.
“Mr. Speaker, on inflation, we are witnessing one of the lowest numbers on record in about two years. Inflation, which, at the height of the pandemic, hovered around 11.8 percent, dropped to 7.5 percent in May 2021 before inching up slightly to 7.8 percent in June. The Bank of Ghana will continue to implement appropriate monetary policy to maintain inflation rate within the target of 8+ -2 percent.
“The cedi has been relatively stable in the past four years, and maintained its stability even in this pandemic year. For the first time in the Fourth Republic, the exchange rate did not see a spike after an election year. Cumulatively, from the beginning of the year to date, the exchange rate has depreciated by 0.6 percent against the US Dollar and appreciating by 3.6 percent against the Euro. This stability is expected to continue as we move towards the close of the year.”