Ghana: Poverty Reduction and Growth Strategy

GHANA IMFCountryReportNo.24/214 July2024 POVERTYREDUCTIONANDGROWTHSTRATEGY ThispaperonGhanawaspreparedbyastaffteamoftheInternationalMonetaryFundasbackgrounddocumentationfortheperiodicconsultationwiththemembercountry.ItisbasedontheinformationavailableatthetimeitwascompletedonJune21,2024. Copiesofthisreportareavailabletothepublicfrom InternationalMonetaryFundPublicationServicesPOBox92780Washington,D.C.20090Telephone:(202)623-7430Fax:(202)623-7201 E-mail:publications@imf.orgWeb:http://www.imf.orgPrice:$18.00perprintedcopy InternationalMonetaryFundWashington,D.C. ©2024InternationalMonetaryFund MadameKristalinaGeorgievaManagingDirectorInternationalMonetaryFundWashington,D.C.20431USA Accra,GhanaJune13,2024 DearMadameGeorgieva, IampleasedtosharewithyouourMedium-TermNationalDevelopmentPolicyFramework(MTNDPF)2022-25.TheMTNDPFisinformedbythelong-termnationaldevelopmentpolicyframework,alsoknownasAgenda2057orGhana@100,whichenvisionsademocratic,inclusive,self-reliantdevelopedcountryby2057.TheMTNDPFwaspreparedwithbroadstakeholderparticipationandsubjecttoextensivepublicconsultationacrossthecountry—includingengagementwithparliamentandthepresidency.Followingapprovalbythepresidency,itwaspresentedtoParliamentandpublishedinDecember2021. WeexpectthisdocumenttofulfilltherequirementsassociatedwiththecompletionoftheSecondReviewofourECF-supportedprogram,namelyhavinginplaceasolidPovertyReductionandGrowthStrategy.TheMTNDPFseekstooperationalizeArticle36,Clause1ofGhana’s1992constitution,whichenjoinsthegovernmenttoensurethatthenationaleconomyismanagedefficientlytomaximizethewelfareofthecitizenry. TheMTNDPFincorporateslong-termobjectivestodevelopourhumanandnaturalresourceswhilefosteringafairsocietyamidGhana’srecoveryfromtheadverseimpactsofthe2022debtcrisis.Tothisend,whileadoptingpoliciestomaintainmacroeconomicstabilityanddebtsustainability,ourdevelopmentinitiativeswillfocusonaddressingGhana’sinfrastructuregap;alleviatingpoverty;andimprovingeducationandhealthsystems. TheMTNDPFisstructuredaround6nationalgoalswithimpact,effect,andoutcomelevelindicatorsandannualquantitativetargets.Specialpriorityisgiventofostersustainedandinclusiveeconomicgrowth;deependigitization;promotescience,technology,andinnovation;improveurbanizationandinfrastructure;reduceyouthunemployment;modernizepublichealthsystems;enhanceemergencypreparedness—includingtopandemics;andaddressclimatechangechallenges. SincewepublishedourMTNDPFin2021,GhanawashitbytheglobalspilloversofthewarinUkraineandadeepdebtcrisis.TheseshockshadasignificantimpactonGhanaresultinginamarkedslowdownineconomicactivityandasharpincreaseininflation,withensuingnegativeeffectsonpovertyandstandardoflivings.TheWorldBankestimatesthatpoverty—measuredwiththeinternationalpovertyrateofUS$2.15aday—increasedfrom24.8in2021to30.3in2023.TheseshockshavealsosignificantlyconstrainedourpolicyspacetoachievetheMTNDPFobjectivesasfiscalconsolidationandmonetary tighteningbecameanimperativetorestoremacroeconomicstabilityanddebtsustainability.Consequently,theMTNDPFobjectivesarenolongerwithinreachinthetimeframeoriginallyenvisagedgiventhemacroeconomicstartingpointandtheavailableresources. Werespondedpromptlytotheneweconomicchallengesemanatingfromtheseadverseshocks,adjustingourmacroeconomicpolicies,makingsignificantprogressonacomprehensivedebtrestructuring,andlaunchingwide-rangingreforms—includingtobolstersocialsafetynets.TheseeffortshavebeensupportedbyanIMFprogramsinceJanuary2023.Intheshort-term,ourresponsehasbeennecessarilyfocusedonstabilizingmacroeconomicconditionanddebtsituation,whilelimitingtheimpactoftheshocksonthevulnerablebychannelingmoreresourcesthroughourexistingsocialprotectionprograms(e.g.,LivelihoodsEmpowermentAgainstPoverty;GhanaSchoolFeedingProgram;NationalHealthInsuranceScheme;andCapitationGrant).Overthemediumterm,ourresponsewillincreasinglyfocusonpoliciestoboostinclusivegrowthandreducepoverty.Tothisend,weareengagingwithourdevelopmentpartnersandotherkeystakeholderstorecalibrateourMTNDPFobjectives,especiallyintermsofpovertyreductiongoalsby2025,byfocusingonpoliciesthathavethegreatestpotentialtoreducepovertyandimprovelivingconditionswhileprioritizingourinterventionsbasedoncost-benefitanalysis. ThegovernmentlooksforwardtofurthercollaboratingwiththeIMFanditsotherdevelopmentpartnerstolaythefoundationsforstrongerandmoreinclusivegrowthinGhana.ItauthorizestheIMFtopublishtheattacheddocumentonitswebsite.Pleaseletmeknowincaseyourequirefurtherassistancefrommyside. Withbestregards, /s/ Dr.MohammedAminAdam(MP)MinisterforFinance Cc:Governor,BankofGhana,Accra 2 GOVERNMENT OFGHANA NATIONAL DEVELOPMENT PLANNING COMMISSION REPUBLICOFGHANA MEDIUM-TERMNATIONALDEVELOPMENTPOLICYFRAMEWORK AGENDAFORJOBSIICREATINGPROSPERITYANDEQUALOPPORTUNITYFORALL 2022-2025 GOVERNMENTOFGHANA NATIONALDEVELOPMENTPLANNINGCOMMISSION OCTOBER2021 MEDIUM-TERMNATIONALDEVELOPMENTPOLICYFRAMEWORK|AGENDAFORJOBSII:CREATINGPROSPERITYANDEQUALOPPORTUNITYFORALL|2022-2025i TABLEOFCONTENTS TABLEOFCONTENTS LISTOFTABLESv LISTOFFIGURESvi LISTOFACRONYMSviii EXECUTIVESUMMARYxii CH