14 January 2013

Ghana: Duffuor Honored for Stabilizing the Economy

Kumasi — DR. KWABENA Duffuor, the Acting Minister of Finance and Economic Planning have been honoured by the Movement for Development Ghana (MFG), a non-Governmental Organization (NGO), for his outstanding leadership role in growing the economy of Ghana.

The Executive Secretary of MFG, Mr. Emmanuel Opoku Mensah, said the primary focus of the gesture was to acknowledge the splendid performance of the Finance Minister in the management of the economy for the past four years.

He told the press at a briefing that the gesture was appropriate, because a nation that fails to honour its heroes is not worth dying for.

He said the 8.4% real GDP growth was recorded in 2008, but the overall macroeconomic situation deteriorated sharply on account of huge fiscal and current account deficits as well as high inflation as the year recorded fiscal deficit of 8.5% of the GDP (new GDP series) on cash basis and 14.4% including arrears and commitments.

He further indicated that headline inflation reached 18.1% by the end of 2008 and external current account deficit of 19.3% GDP. The overall balance of payments recorded a deficit of US$ 941 million, financed by a huge drawdown of the country's foreign reserves, which left the gross international reserves at only US$ 2,036 million (equivalent to 2.2 months of imports cover).

This, he said, contributed to weakening the cedi against the major international currencies, with the Cedi depreciating cumulatively by 20.1%against the US dollar.

Opoku Mensah, however, stated that in 2009, the government under the distinguished leadership of Dr. Duffour adopted a comprehensive program of fiscal consolidation and macroeconomic stability to address the imbalances inherited from the previous administration.

He said the key objective of the program was to reduce the fiscal deficit to sustainable levels, keep inflation in single digit, and maintain comfortable levels of international reserves and stabilize the exchange rate of the domestic currency.

He said the program has been very successful with real GDP growth averaging 8.8% between 2009 and 2011.

According to the MFG the real GDP growth rose to 14.4% in 2011 making Ghana the fastest growing economy in the sub-Sahara, while real GDP growth prospects in 2012 remain positive with the Ghana Statistical Services provisional figure of 7.1%.

Opoku Mensah said the country's terms of trade has improved significantly, with export earnings increasing by 36.3% in 2010 largely due to an upsurge in gold and cocoa earnings.

In 2010 and 2011, the overall balance of payments registered a surplus, driven by improvements in both the capital and current accounts.

As a result of the improved balance of payments position, there has been significant accumulation of gross international reserves from US$ 2.0 billion at the end of 2008 to US$ 5.4 billion in December 2012 hence the need to commend the minister, MFG's Executive Secretary explained.

Professor Kusi Newman, the Special Advisor to the Minister, received the Citation on behalf of Dr. Duffour.

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