News Guide Africa

Category: Technology

  • BoG awaits US$2.05b to shore up reserves

    BoG awaits US$2.05b to shore up reserves

    By Elorm Desewu

    The Bank of Ghana is expecting a total of US$2.05 billion in the next couple of months to shore up the country’s Gross International Reserves.

    Already, the US$750 million loan from the African Export Import Bank (AFREXIMBANK) has hit the accounts of BoG and now waiting for the US$1.3 billion cocoa syndication loan.

    The BoG is hopeful that this money would help the central bank to build a strong reserves, imrpove on the country’s balance of payment and also stabilize the local currency, the cedi which has continue to depreciate since the beginning of this year.

    it is likely that the country reserves would hit a record high of US$9.75billion if all the monies hit the central bank’s account.

    The Gross International Reserves declined significantly to US$7.7 billion at the end of June 2022, equivalent to 3.4 months of import cover, compared with US$9.7 billion which was 4.3 months of imports at the end of December 2021.

    The decline in the reserve buffer, alongside unfavourable global financing conditions, exerted significant pressures on the foreign exchange market. On the interbank forex market, the

    Ghana Cedi cumulatively depreciated against all the three major currencies; 19.2 percent against the US dollar, 8.8 percent against the Pound Sterling, and 10.0 percent against the Euro as at July 20, 2022.

    Parliament approved a plan by the government to borrow up to $750 million from the African Export-Import Bank for the 2022 budget.

    The loan proceeds are expected to make room for the country to reduce domestic borrowing and put it in a stronger position to support the local currency.

    The government is on course to seek a funded program with the International Monetary Fund after a decision early in the year to cut budget expenditures by as much as 30% failed to stem a sell-off in its international bonds.

    Ghana’s recent debt woes were caused by a sweeping clean-up of the banking sector, energy-sector loans, the impact of the coronavirus pandemic and the fallout from Russia’s invasion of Ukraine, driving its debt ratio to 78.3% of gross domestic product at the end of June from 76.6% at the of December, 2021. The country hopes to receive about $3 billion from the IMF program to enhance the home-grown policies it is already implementing.

  • BoG launches Regulatory and Innovation Sandbox

    BoG launches Regulatory and Innovation Sandbox

    The Bank of Ghana has launched its Regulatory and Innovation Sandbox developed in collaboration with EMTECH Solutions Inc. following a successful pilot implementation.

    This is in line with the Bank’s commitment to continuously evolve a conducive regulatory environment that fosters innovation, financial inclusion and financial stability.

    The Regulatory Sandbox is an opportune tool for harnessing the potential of technology to develop an efficient and inclusive financial service industry without risking financial stability.

    According to statement issued by the Bank and signed by the Secretary of the Bank, Sandra Thompson, it will serve as an enabling framework for small scale, live testing of innovations by innovators (operating under a special exemption, allowance, or other limited, time-bound exception) in a controlled environment under the regulator’s supervision.

     It aims at, among others, fostering a deeper understanding of innovative products, services and business models by the regulator, allowing for potential improvements to legal and regulatory requirements to encapsulate emerging technologies, and ensuring careful monitoring and containment of any risks that may emerge.

    The Regulatory Sandbox is open to all licensed financial institutions (Banks, Specialized Deposit-taking Institutions, Payment Service Providers, Dedicated Electronic Money Issuers, Financial Holding companies and other Non-Bank Financial Institutions) and unlicensed FinTech start-ups that have innovative products, services or business models that meet the Regulatory Sandbox requirements.

    Innovations eligible for the sandbox environment will have to satisfy any of the following broad categories: 1. New digital business models not covered explicitly or implicitly under any current regulation; 2. New and immature digital financial service technology; and 3. Innovative and disruptive digital financial service products that have the potential of addressing a persistent financial inclusion challenge.

    Over the past two (2) years and during the pilot, the use of digital financial services among Ghanaians has recorded remarkable increase on account of a raft of enabling policies introduced by the Bank and the Government of Ghana under the national digitalization agenda.

    At the same time, the restrictions imposed on movement of persons as part of the COVID-19 containment measures have spurred the adoption of digital financial services among individuals, businesses, government ministries, departments and agencies.

     Similarly, the adoption of emerging technologies such as artificial intelligence, machine learning, and data analytic tools is accelerating among Ghanaian financial service providers with enormous opportunities for innovative products and services including chatbot, Know Your Customer (KYC) and Customer Due Diligence (CDD) solutions, anti-money laundering and fraud monitoring platforms, credit scoring for digital credit products and customer-centric product designs.

    Within the domain of Bank of Ghana, the digital version of the Ghanaian currency, the eCedi, has the potential of boosting innovation in digital financial service and further enhancing digitalization of the financial service industry when mainstreamed. On the other end of the digitization spectrum, blockchain appears to hold significant promise for use in mainstreaming financial service delivery though the technology is yet to mature.

    Nevertheless, the Bank of Ghana took a bold decision and admitted a blockchain solution into its Regulatory and Innovation Sandbox during the pilot stage; a further evidence of its commitment to innovation.

    The Regulatory Sandbox Framework, user guide and access link to the platform can be found on Bank of Ghana website to provide guidance and accessibility to interested licensed and unlicensed financial or non-financial institutions.

    Bank of Ghana through this initiative, affirms its commitment to provide the enabling environment for innovation to promote financial inclusion, and facilitate Ghana’s digitization and cash-lite agenda.

  • Cedi Depreciation: gov’t confused, experts rehash old proposals

    Cedi Depreciation: gov’t confused, experts rehash old proposals

    Adnan Adams Mohammed

    As Ghana’s local currency is rated the worst performing currency in the world which has left the government in a confused state with its monetary policy controls.

    The Cedi has depreciated more than 35 percent on the interbank rate and more than 42 percent on the forex bureau market. The Cedi currently sells at about GHC9.20 to U.S $1.0 at forex bureas.

    The president of the Ghana Union of Traders Association (GUTA) has called on the Bank of Ghana (BoG) to relax the laws on transacting business in dollars at the banks.

    “Doing business in forex is like calling for an audit so many people shy away from doing legitimate business with the banks in dollars”, Dr. Joseph Obeng

    “The laws in dealing with forex at the banks are time-consuming and too cumbersome which has resulted in the booming black market for the exchange of dollars in the country. A lot of people including foreigners now go to the black market to deal in forex in blatant disregard of the laws on forex in the country.

    “In other jurisdictions, if you have to change forex, an identity like a passport is needed but here the market is free for all,” he lamented.    

    This, he explained has contributed to the fast depreciation of the cedis.

    Which has badly affected businesses, contributing to the swindling of the working capital of business people in the country.

    “Now you need about one million Ghana Cedis to be able to do business worth one hundred thousand dollars because the dollar is being bought at GHS10”, he bemoaned.

    He suggested a review of the country’s investment laws adding that this has also contributed to capital flight which in the end has pushed the depreciation of the cedi

    Consequently, the Vice President of GUTA, Clement Boateng argued that some of the foreign firms and traders are importing huge products into the country, which they do not even keep half of the proceeds.

    “Foreigners are doing about 85% of the imports into this country. At the end of the day, this poses a threat to our foreign reserve as they equally take all the profits out of the country”.

    “This also has to do with our investment laws, which need to be revised”, he added

    Meanwhile, members of the association in the coming days will protest against some issues impacting ion their businesses, including the falling value of the cedi and the high lending rate.

    Also, the Executive Director of Danquah Institute, Dr. Antoinette Tsiboe Darko has rehasd calls on the appropriate authorities to speedily put in place measures to reduce the dollarisation in the economy.

    According to her, the pricing of goods and services in dollars is a structural defect which has worsen the economic challenges confronting the country.

    She compares the situation to our neighboring francophone countries and maintains that the CFA appreciates better than the Cedi.

    “We have structural issues which speak to the issues we are currently facing. We have a dollarized economy. It is something that has historically gone with us and we keep going along with it. When you go into a Francophone country, it is the CFA that comes to fore when you want to buy something but how come that in Ghana it is the dollar that is mentioned first?. This is something that we have to fight to make sure that the dollar economy is minimized so that we can have confidence in our own cedi”, she said in an interview, last week.

  • Bank of Ghana to widen its scope on cryptocurrency

    Bank of Ghana to widen its scope on cryptocurrency

    The Bank of Ghana has assured stakeholders of its preparedness to sanitize the digital space with respect to cryptocurrency.

    The Central Bank admits that in the initial stages of the new digital currency, there was a gap, however, the regulator has braced itself to make it cleaner while building public interest.

    Speaking at the MTN MoMo Stakeholder forum under theme, ‘The impact of the Central Bank’s digital currency on future monetary policy and digital payments’, the Assistant Director in charge of Fintech and Innovation at the BoG, Clarence Blay, maintained that the digital position of his outfit is in consonance with global standards.

    Clarence Blay highlighted issues of the financial challenge confronting the banking sector in the past in relation to the digital space.

    He said, “We understand the philosophy that brought this thing into being, more of a libertarian philosophy following the 2008 and 2009 financial crisis. We have to work together to have a clean the system.”

    He further stated that “Based on our regular surveillance and global monitoring, we decided to explore central banks digital currency in deep.”

    The Bank of Ghana currently believes that the industry is moving towards the deeper financial space.

    However, in April, 2022, the Central bank issued cautionary directives to banks and other financial entities in its dealings in crypto currency trade and other unregulated investment schemes.

  • Policy Rate Hike: experts differ on effectiveness to control inflation

    Policy Rate Hike: experts differ on effectiveness to control inflation

    Adnan Adams Mohammed

    The Bank of Ghana last week increased the monetary policy rate by a further 3 percentage to 22 percent from 19 percent purposefully to control the frog-leaping consumer inflation.

    Financial experts have expressed verified opinion in their response to a question on whether the policy rate could be an effective measure to tame the galloping inflation which currently is around 31.7%.

    A Finance Lecturer and Associate Professor with Andrews University in Michigan, USA, in reacting to the increase in the Central Bank’s policy rate rate said, the monetary authority should have put a cap on the amount government borrows, so far as it has put a limit on the primary reserves of banks, although he welcomed the policy rate hike.

    “So far as the Central Bank has put a limit or has increased the primary reserves for banks, it must also put a cap on the amount [borrowings] government withdraws from its account which is called debt monetization or printing of money”, Dr Williams Peprah suggested.

    According to him, the printing of money is one of the major impacts on increasing inflation, “so, I was hoping that the Central Bank will address the issue”.

    He however said “the Bank of Ghana’s monetary policy decision of increasing the rate to 22% is a good thing that we need now in the country. Because, we’ve noticed the disparities between the monetary policy rate, inflation rate, and treasury bill rate.”

    “At the moment, the Treasury bill rate is hovering around 27% and the difference between that one and the monetary policy rate is worrisome. So moving it up to 22% is something that will be able to address the issue”.

    On the Central Bank’s decision to boost the supply of foreign exchange into the economy and help stabilise the cedi, Dr. Peprah said the Central Bank should not limit it to only three industries (mining, oil and banking), but also to the other sectors of the economy.

    “The Central Bank should not limit its discussions to only these three industries, but also to the service sector by focusing on telecommunications, because the firms hold some foreign exchange exposure.

    Indeed, the cost of borrowing already will go up as I have mentioned because banks are now pegging their cost of funds to the Treasury bill rate and not the monetary policy rate”.

    Contrary, a Partner at Deloitte Ghana, Yaw Lartey has expressed his worries about the increased policy rate, saying it will not address the rising inflation rate, but rather shoot up cost of borrowing.

    According to him, though the monetary policy rate historically has helped to manage inflation, the current economic situation proves otherwise.

    “So, we know that historically, the monetary policy rate has been used to manage inflation, particularly in an attempt to mop up excess liquidity from the market where necessary. However, in this particular situation, we do not believe that the increase in monetary policy rate will help manage inflation. And this is so because in the last four months, the Ghana Statistical Service has released inflation rate which points out to the fact that imported inflation is the key driver”.

    “So imported inflation has outpaced domestic inflation. When you have imported inflation, it is very difficult to use monetary policy to manage it because a lot of it is driven by factors that are beyond the control of the market forces, particularly within the country”, he added.

    Mr. Lartey advised the government to address the rate of depreciation of the cedi if the country wants to fight inflation.

    “So, what government should focus on is to manage the rate of depreciation if it really want to deal with imported inflation. We should ensure that the cedi is stabilised or strengthened against major trading currencies because a lot of the imported inflation is driven by the fact that they’re importing some commodities; and when the local currency depreciates, we don’t have to spend more to import those commodities”.

    He argued that addressing the cedi’s depreciation will help protect people’s investments, adding that the current rate of return on the money market is less than 28%, lower than the inflation rate of over 31%.

    “And the benefits, we are likely to get is that people’s investments have been protected. So, as we speak we initially projected an inflation rate of 8% inflation. Now we have revised it to 28%. What that means is that any return on investment is less than 28% will be a negative return.”

    “Currently, Treasury bills are trading at about 27%. This year’s inflation is about 31%. And anybody who’s investing at 26% whether any of Ghana’s security is getting a negative return on investment,” he added.

    Mr. Lartey however urged the Bank of Ghana to make more funds available for financial institutions to help mitigate the cost of borrowing, and consequently reduce the cost of doing business.

    Apparently, the Head of Economics Department at the University of Ghana, William Baah-Boateng has commended the Bank of Ghana (BoG) for its swift approach to increase the policy rate by 300 basis points to 22%, after an Emergency Monetary Policy Committee meeting.

    Dr. Baah-Boateng in an interview indicated that had the BoG not intervened, the country’s inflation rate would have been 100%.

    “In economics, there is something we call counterfactual so if the problem is coming and they don’t even step in at all, perhaps we would have been in the 100’s,” he said.

    Currently, year-on-year inflation shot up to 31% in July 2022, latest data from the Ghana Statistical Service (GSS) has revealed.

    However, the cost of borrowing is expected to go up significantly, and consequently, increase cost of living and doing business.

  • Cedi’s free fall; sharp inflation rise push policy rate to 22%

    Cedi’s free fall; sharp inflation rise push policy rate to 22%

    By Elorm Desewu

    The speed depreciation of the fiat currency, the cedi and sharp rise in year on year inflation have compelled the Monetary Policy Committee, (MPC) of the Bank of Ghana to hike the policy rate by 300 basis points to settle at 22 percent from 19 percent.

    This means that cost of credit to households and the private sector would rise steadily in the next couple of months.

    But in a swift attempt to stem the rising inflation as well as the speed depreciation of the cedi, the BoG has raised the primary reserve requirement of banks from 12 percent to 15 percent which is to be implemented in a phased manner: i. 13 percent from 1 st September, 2022 ii. 14 percent by 1st October, 2022 iii. 15 percent by 1st November, 2022

    Additionally, to boost the supply of foreign exchange to the economy, the Bank of Ghana is working collaboratively with the mining firms, international oil companies, and their bankers to purchase all foreign exchange arising from the voluntary repatriation of export proceeds from mining, and oil and gas companies. This will strengthen the central bank’s foreign exchange auctions.

    According to the BoG, the Ghana Cedi has depreciated by 25.5 percent year-to-date, reflecting the Ghana specific situation, including the challenging financing of the budget from both domestic and external sources, downgrading of sovereign credit rating, non-residents disinvestment in local currency bonds, and loss of reserve buffers.

    The US Dollar has strengthened against all major currencies. From the beginning of the year to date, the pound sterling has weakened against the US dollar by 12.4 percent while the Euro has also weakened by 11.8 percent. Countries similar to Ghana (Ghana’s peers) are all experiencing sharp depreciation to date.

    Recent developments in the foreign exchange market showed elevated demand pressures, reflecting among others, continued heightening of uncertainties in the global economy, rising inflation in many advanced economies and the resultant coordinated tightening of monetary policy stance by major central banks. This has further tightened global financing conditions with significant implications for Emerging Markets and Developing Economies (EMDEs), especially for those with weak fundamentals.

    The latest consumer price index release showed that the headline inflation accelerated further for the eleventh consecutive month to 31.7 percent in July 2022, from 29.8 percent in June 2022. This was driven by both food and nonfood price pressures.

    Food inflation rose to 32.3 percent in July 2022 from 30.7 percent in June 2022. Similarly, non-food inflation increased to 31.3 percent from 29.1 percent in June 2022, contributing 55 percent to the rise in headline inflation in July 2022.

    The above developments have translated into relatively strong underlying inflationary pressures. The Bank’s core measure of inflation, defined to exclude energy and utility indices, increased to 30.2 percent in July 2022 from 28.4 percent in June.

    On month-on-month basis, headline inflation rose by 3.1 percent in July 2022 compared with 3.0 percent in June 2022. The increase in monthly inflation was underpinned by increases of 3.3 percent and 3.0 percent in food and non-food inflation respectively.

  • Banks’ profitability growth shrinks

    Banks’ profitability growth shrinks

    By Elorm Desewu

    Universal banks’ profitability growth has shrunk for the first six months of this year. The banking sector’s profit before tax was GH¢4.4 billion, representing 21.6 percent annual growth in June 2022, compared to 32.1 percent in the previous year.

    The net interest income grew at 12.4 percent, compared with 19.4 percent a year ago. Net fees and commissions, however, grew by 29.2 percent, compared to 19.6 percent in the previous year, reflecting a rebound in trade financerelated business. These developments culminated in a 23.0 percent growth in operating income, compared with a growth of 15.7 percent in the corresponding year.

    Operating expenses also recorded a higher growth of 22.9 percent, compared to 7.3 percent in the previous year, moderating the growth in profit before tax during the first half of 2022.  

    Total assets grew by 22.8 percent on a year-on-year basis to GH¢200.0 billion at endJune 2022, compared to the growth of 17.2 percent in the previous year. Total deposits grew at a slower pace by 19.1 percent to GH¢131.3 billion, relative to 22.5 percent growth a year earlier.

    Key Financial Soundness Indicators of the banking industry remained positive. The Capital Adequacy Ratio was 19.4 percent in June 2022, well above the regulatory minimum of 13.0 percent.

    Core liquid assets to short-term liabilities improved to 30.2 percent, compared with 27.5 percent in the previous year. The non-performing loans ratio also improved to 14.1 percent at end-June 2022 compared with 17.0 percent in June 2021, reflecting some moderation in the growth of the stock of non-performing loans, as well as the rebound in credit growth.

  • Mould hints of fuel shortage as forex crunch hit banks

    Mould hints of fuel shortage as forex crunch hit banks

    Adnan Adams Mohammed

    A former Chief Executive Officer of National Petroleum Authority (NPA) has hinted of fuel shortage in the country if government do not intervene in providing foreign excharge to the banking sector immediately.

    The energy and finance consultant indicates that, banks are not providing sufficient foreign currency needed to meet the payment of their maturing Letter of Credits (LCs) issued to international fuel traders.

    The banks are crying out that the Bank of Ghana is not able to provide enough foreign currencies (especially the U.S dollar), through its forex auctions, to meet their trading partners needs.

    “This is causing BDC‘s to max out on their credit-line limits with their banks, and the implication is that the banks will no longer be able to finance fuel imports by October”, Alex Mould said in an interview.

    The, current situation, if not addressed, could prove disastrous for the country as this could trigger a domino effect and  even imports of essential commodities could come to a grinding halt.

    As it stands, not only fuel shortage is imminent, but food items such as rice, sugar, protein food (fish, meats) and bakery products; “it could be a bleak Christmas this year”, he added;

    To salvage the situation, Mr Mould proffered that, “Government needs to act decisively and quickly before International Banks’ Credit and Country Risk teams start reviewing downwards their Country-limits to Ghana, if they have not already done so since S&Ps recent downgrade – the last of the three major rating agencies that have down graded Ghana this year.

    Such actions by the local bank’s International partners will cause a FX credit crunch resulting in defaults by Ghanaian importers to their suppliers. This would only trigger a scramble for the scare foreign exchange which could send the cedi spiraling in a free falli!

    “GoG only choice is to accelerate their discussions with IMF to enter into an immediate Bridge-program whilst working on the main Take-Out Program ,which sources suggest will kick in sometime in first quarter of 2023.”

  • Banks unlock credit to private sector

    Banks unlock credit to private sector

    By Elorm Desewu

    Credit to the private sector is recovering to the pre-pandemic levels, reflecting commercial banks’ portfolio rebalancing.

    According to the Bank of Ghana, (BoG), private sector credit increased significantly by 33.7 percent in June 2022, compared with 6.8 percent in the same period of 2021. However, in real terms, the private sector credit recorded a 3.0 percent growth.

    A year ago in June 2021, real private sector credit had contracted by 0.97 percent. The latest credit conditions survey of banks revealed tightened credit stance on loans to enterprises and households. Notwithstanding these tight credit conditions across the industry, banks’ credit extension improved during the review period.

     New advances to the economy broadened across the industry, with 20 out of 23 banks extending new credit. Total new advances as of June 2022 was GH¢24.6 billion representing 54.0 percent year-on-year growth, compared to GH¢15.9 billion which was1.0 percent growth recorded for the same period of 2021.

    Results from the Bank’s latest confidence surveys conducted in June 2022 showed significant softening of business and consumer sentiments. While consumers felt less optimistic about future economic conditions, businesses were concerned about the impact of high cost of raw materials, rising labour costs, exchange rate volatility, and weak consumer demand.

    These conditions adversely impacted business optimism and prospects. At the same time, the Purchasing Managers’ Index (PMI), which provides information on inventory accumulation and new orders at the firm level, also declined.

  • Gov’t revises macroeconomic indicators.. inflation pegged at 28.5%

    Gov’t revises macroeconomic indicators.. inflation pegged at 28.5%

    Adnan Adams Mohammed

    The government of Ghana has revised the end-period inflation from 8 per cent to 28.5 per cent, Finance Minister Ken Ofori-Atta has announced in his mid-year review budget presented to parliament, last week.

    He said the revision of the end-period inflation for 2022, as part of the re-jigging of the entire macroeconomic framework, has been necessitated by a significantly-changed macroeconomic environment.

    He said based on the developments for the first six months of 2022 and outlook for the rest of the year, the government has, accordingly, revised the macro-fiscal targets for 2022 as follows:

    · Overall GDP Growth rate of 3.7 percent down from 5.8 percent

    · Non-Oil GDP Growth rate of to 4.3 per cent down from 5.9 per cent

    · End period inflation of 28.5 per cent up from 8 per cent;

    · The overall fiscal deficit of 6.6% of GDP down from 7.4%

    · Primary surplus of 0.4% of GDP up from a surplus of 0.1% of GDP; and

    · The Gross International Reserves of not less than 3 months import cover.

    Mr Ofori-Atta told the legislature that “price pressures have continued to build in several advanced and emerging market economies, primarily due to escalating energy and other commodity prices, and widespread supply chain disruptions”.

    “In response, inflation in advanced economies is expected to increase from 3.1 per cent in 2021 to 5.7 per cent in 2022, but moderate to 2.5 per cent in 2023. Similarly, inflation in emerging markets and developing economies is expected to increase from 5.9 per cent in 2021 to 8.7 per cent in 2022 before moderating to 2.5 per cent in 2023”.

    He also noted that the 2022 fiscal framework has been revised due to the fiscal performance for the first half of the year.

    He put the revision down to shortfalls in the expected yields from the new 2022 revenue measures and the implementation of the 30% discretionary expenditure cuts and other expenditure measures announced by the government earlier in the year.

    The other expenditure measures are:

    o the moratorium on foreign travels except pre-approved critical and/or statutory travels;

    o 50% cut in fuel coupon allocations for all political appointees and Heads of government institutions, including SOEs, effective 1st April 2022;

    o the moratorium on foreign travels except pre-approved critical and/or statutory travels; and

    o 50% cut in fuel coupon allocations for all political appointees and Heads of government institutions, including SOEs, effective 1st April 2022.

    The other factors include:

    · Government’s support for 15% Cost of Living Allowance (COLA) to public servants; · upward revision to the average weighted domestic interest rates;

    · upward revision in exchange rate on account of higher depreciation; and

    o revision of the Benchmark Crude oil price from US$61.2/bbl to US$94.8 and the Benchmark Crude oil volume from 59.5mn barrels to 58.0mn.

    Accordingly, Mr Ofori-Atta said: o Total Revenue and Grants have now been revised to GH¢96,842 million (16.4% of GDP) in 2022, down from the 2022 Budget target of GH¢100,517 million (20.0% of GDP) representing 3.7 per cent reduction.

    o Total Expenditure (including payments for the clearance of arrears) has been revised downward to GH¢135,742 million (22.9% of GDP) from the original budget projection of GH¢137,529 million (27.4% of GDP).

    o Interest Payments have been revised upwards from GH¢37,447 million (7.5% of GDP) to GH¢41,362 million (7.0% of revised GDP), mainly on account of inflationary pressures and exchange rate depreciation resulting in higher cost of financing.

    He said the revisions in government’s fiscal operations result in a fiscal deficit (on cash basis) of GH¢38,900 million (6.6% of revised GDP) up from the 2022 Budget deficit target of GH¢37,012 million (7.4% of GDP). The corresponding primary balance is a surplus of GH¢2,461 million (0.4% of revised GDP), up from the 2022 Budget estimate of a surplus of GH¢435 million (0.1% of GDP).

    He noted that although the deficit is expected to be financed from both foreign and domestic sources, domestic financing will be the key driver while the government works to regain external market access.

    Mr Ofori-Atta announced that the following revenue measures will be pursued in the remaining half of the year:

    · eVAT – The digitalisation of our revenue mobilisation processes remains a key focus; therefore, the GRA is finalising all relevant processes to facilitate the effective collection of VAT revenue. This includes a proposed amendment of the Value Added Tax Act 870 to enable its electronic collection, effective 1st October 2022. · Property Rate – It is fundamentally important that, together with the Ministry of Local Government, we continue to assist and support the Assemblies, not only to expand their revenue base, but to do so with optimal efficiency and effectiveness. Therefore, the collective efforts of the local government, the Assemblies, and the GRA in launching and end-to-end digitalised process will be realised by August.

    · Extension of Waiver of Interest & Penalty to Dec 2022; and

    · Introduction of upfront payment of VAT on importers not registered for VAT with implementation start date of 1st October 2022.