Dr. Cassiel Ato Forson, a ranking member of the Parliament’s Finance Committee, predicts that Ghana cedi will weaken even more between January and June of this year, possibly leading to an IMF board approval in the second quarter of 2023.
According to him, Ghana’s economy will see one of the lowest non-oil GDP growths as a result of the government’s debt restructuring procedures and other strict fiscal and monetary policies.
Dr. Ato Forson predicted a devastating economy for 2023 in a social media post.
This year, Ghana’s economy will record one of the worst non-oil GDP growths due to the impact of the debt restructuring and a plethora of extremely tough fiscal and monetary policies. The haircut on domestic bonds and Eurobond is expected to adversely impact the health of the banking sector, local businesses, and individuals! Also, Bilateral debt restructuring will lead to government’s foreign-financed projects being abandoned. Unemployment will worsen due to the freeze on employment, debt restructuring, poor business climate, and massive austerity. Ghana will default in the payment of interest and principal on domestic bonds, Eurobonds, and most of our bilateral loans in 2023.
He added that anticipated layoffs from the financial sector as a result of the debt restructuring and anticipated layoffs from government projects with foreign financing will make the situation worse.
The total reversal of the import value discount combined with the commencement of the 2.5% VAT hike and other taxes on businesses will keep prices of products and services “high, and, in some circumstances, greater than the current prices.
On Electricity tariffs
“Also, the government’s policy of automatic adjustment of electricity tariffs will exacerbate the high cost of living in 2023. Inflation is expected to be above 30% for the most part of 2023,” he added.
He also does not see the government’s gold for oil policy-making any major impact on the price of petroleum products.
“The cedi will inevitably depreciate further, from Jan to June. Before a possible IMF board approval in Q2, 2023.”