The State of the Economy at the end of 2016

• Declining economic growth. Real GDP growth was down to 3.7% in 2016 from 9.1% in 2008
• Declining growth in agriculture and industry
• Rising Unemployment
• High Fiscal Deficits
• Rising Public Debts
• High interest rates
• Accumulating Arrears on government obligations – The arrears validated as outstanding at the end of 2016 was GH¢3.1 billion
• Weakening of the Banking system
• Cancellation of teacher and nursing training allowances
• Return to cash and Carry under NHIS
• freeze on the hiring of Extension Officers in agriculture
• High and pervasive taxes
• Corruption


15 taxes reduced or abolished
This scale of tax reductions has never been implemented in the 60 years of Ghana’s economic history since independence.
• Abolished excise duty on petroleum
• Abolished levies imposed on ‘kayayei’ by local authorities
• Abolished levies imposed on religious institutions by local authorities
• Abolished the 1% Special Import Levy
• Abolished the 17.5% VAT/NHIL on domestic airline tickets
• Abolished the 17.5% VAT/NHIL on financial services
• Abolished the 17.5% VAT/NHIL on selected imported medicines, that are not produced locally
• Abolished the 5% VAT/NHIL on Real Estate sales
• Abolished import duty on the importation of spare parts
• Reduced National Electrification Scheme Levy from 5% to 3%
• Reduced Public Lighting Levy from 5% to 2%
• Reduced special petroleum tax rate from 17.5% to 15%


• The Planting for Food and Jobs Campaign, which is anchored on the strategic pillars – provision of improved seeds, fertilizers, dedicated extension services, also witnessed its first year of implementation with very positive results. Over 200,000 farmers benefited from the program. 1,200 agric extension officers recruited.

*Formalization of the economy through digitalization:*

 National ID Cards– A unique identification number for all all residents of a country is critical for the governance and progress of a country. No modern economy exists without such unique identification. Thus far, the cards are technically ready to be issued and the first card was in fact issued in September. It however became necessary to change the NIA law and the legislative instrument for the NIA law is expected to be passed by Parliament soon for mass nationwide registration to begin. National ID Card will be a first since independence.

 Digital Property Addressing – A first since independence
• Major benefits for job creation – post office
• Police – armed robberies, hospitals
• E-commerce
• Delivery businesses
• Will be a requirement for the National ID and all government services

 Paperless Ports – first time in 60 years

 Digital Drivers licences and vehicle registration First time


• Free SHS – First time in Ghana’s history
o Free Meals (Both boarding and day)
o Free boarding accommodation
o Free textbooks
• Doubling of Capitation Grant (From GH¢4.5 to GH¢9.0)
• Teacher Training Allowances
• Nursing Training Allowances
• Payment of validated teachers allowances in arrears from 2013-2016 (Ghs14, 172, 313.23)


• Corruption is an equal opportunity destroyer of lives and the economy. It is not a partisan matter. It affects education, health, infrastructure, salaries, etc.

• E-procurement – launched by the PPA in July 2017

• Office of the Special Prosecutor – Appointment of Martin Amidu
• First time in Ghana’s history. The message is that not even the president can protect you if you are corrupt. This again is the first time since independence that this approach has been adopted.


• Development Authorities – Northern, Middle Belt, Coastal- IPEP

• Zongo and Inner City Development Fund – First time in history

• Increased the share of the DACF to persons with disabilities from 2% to 3%

• All allowances due soldiers at the various missions have been fully paid. $39 million in arrears have also been paid
• Peacekeeping allowance increased and paid from $31 to $35


1. Economic growth has increased from 3.7% in 2016 to an estimated 7.9% in 2017. This is the best annual real GDP growth for the first year of any new government since 1992.
2. Agriculture growth increased from 3.0% in 2016 to a projected 4.3% in 2017.
3. Industry growth increased from -0.5% in 2016 to 17.7% at the end of 2017 underpinned by increased petroleum production
4. The services sector growth is projected to decline from 5.7% in 2016 to 4.7% in 2017
5. Non-Oil GDP growth is projected to marginally decline from 4.9% in 2016 to 4.8% in 2017.
6. Inflation declined from 15.4% in 2016 to 11.8% in 2017
7. Interest rates on the 91-day treasury bills declined from 16.8% in 2016 to 13.3% in December 2017.
8. The Bank of Ghana Monetary Policy Rate saw a year-on-year reduction from 25.5 percent by end-2016 to 20 percent by end-2017. This is the largest single year reduction in the monetary policy rate since 2001and since the onset of the Bank of Ghana’s inflation targeting regime.
• Ghana’s external payments position has strengthened. The trade account recorded a surplus of $646 million (1.4% of GDP) ast at September 2017 compared to a deficit of $2.0 billion (4.7% of GDP) for the same period in 2016.
• Our gross international reserves increased from $6.2 billion in December 2016 (3.5 months of imports) to $7.4 billion as at 24th November 2017 (4.1 months of imports)
• The exchange rate of the cedi to the US dollar depreciated by 4.6% in 2017, the same rate as in 2016.
• Ghana’s sovereign credit rating has improved with Fitch ratings changing Ghana’s B rating outlook from “Negative” to “Stable” while S&P changed Ghana’s outlook from Stable to Positive.
• The primary balance also posted a surplus for 2017 compared to the deficit recorded in 2017.
• Ghana’s debt to GDP ratio declined for the first time since 2007 from 73% of GDP in 2016 to some 70% in 2017.
• The rate of accumulation of Ghana’s debt stock has also declined significantly. The annual average rate of debt accumulation of 36% over the last four years declined to 13.58% in the first four months of 2017.
• Fiscal discipline has been restored and fiscal consolidation has taken hold. For the first time since 2006, the government of Ghana has been able to meet its fiscal deficit target notwithstanding some revenue shortfalls. The fiscal deficit target was to reduce the deficit from 9.3% of GDP in 2016 to 6.3% of GDP for 2017. The preliminary data for end December 2017 indicates that the fiscal deficit was some 5.6% of GDP in 2017.

Leave a comment »
Disclaimer: Comments by third parties do not in any way reflect the views of Breaking News Gh. We, however, reserve the right to edit and/or delete any comment. [ Terms & Conditions ]

Leave a Reply

(Your email address will not be published)