Ghana’s budget deficit was at 11.8% of gross domestic product (GDP) on a commitment basis last year, almost double the target of 6.3%/GDP, Finance Minister Ken Ofori-Atta said on Monday during a mid-year budget review.
The West African nation has been grappling with its worst economic crisis in a generation and is restructuring its debt as a condition for receiving International Monetary Fund support.
Its central bank last week raised its main interest rate again and called for tighter fiscal policy to help bring down stubborn double-digit inflation.
Meanwhile, the Bank of Ghana has reported significant losses totaling GH¢60.81 billion for the financial year 2022, in stark contrast to the GH¢1.23 billion profit recorded in 2021.
The losses were primarily attributed to the government’s domestic debt restructuring activities and the depreciation of the local currency, among other factors.
The audited financial statement for 2022, released on July 28, revealed that as of December 31, 2022, the total liabilities of the central bank and its subsidiaries exceeded its total assets by GH¢54.52 billion. This decline in net worth was a direct consequence of the impact of the Domestic Debt Exchange Program (DDEP) and the impairment of certain assets of the Group.
