The Ministry of Finance has unveiled a comprehensive plan to spend $522.20 million (GH¢8.36 billion) on initiatives aimed at preventing and mitigating the effects of the recent dry weather conditions impacting the five northern regions and parts of Ghana’s transitional zone.
These affected areas include the Northern, Upper East, Northeast, Savannah, and Upper West regions, as well as Bono, Bono East, and Oti.
During a press briefing on the state of the economy, Finance Minister Dr. Mohammed Amin Adam outlined the government’s strategy, which involves funding from both government resources and Development Partners (DPs). The government is committed to ensuring that these near-drought conditions do not undermine the country’s Post-COVID-19 Economic Growth (PC-PEG) program.
To tackle the crisis and mitigate its impact on the population and the economy, the government has proposed the following interventions:
Temporary Ban on Grain Exports: The government will enforce a temporary ban on exporting selected grains, including maize, rice, and soybeans.
Support for Local Farmers: The government will purchase stock from local farmers to protect them from losses due to the export ban.
Importation of Essential Supplies: The government will import grains such as maize, rice, and poultry feed to bolster local supplies.
Drought Relief Support: Vulnerable farmers affected by the dry conditions will receive cash transfers to partially compensate for their losses.
Agricultural Input Support: Farmers in both the northern and southern sectors will receive essential inputs, such as fertilizer, urea, maize seeds, and rice seeds, to help them replant when the rains return and boost production during the minor season.
These measures are designed to safeguard livelihoods, ensure food security, and maintain economic stability in the face of challenging weather conditions.
Release of Bailout Funds
Additionally, the Ministry of Finance announced the release of the first tranche of GH¢700 million from the additional GH¢1.5 billion bailout funds. These funds are designated for customers of defunct financial institutions, including Blackshield Fund Management Ltd. The Finance Minister confirmed that he instructed the Controller and Accountant-General to disburse these funds to alleviate the stress on affected individuals.
According to the 2024 Mid-Year Review of Fiscal Policy, the Cabinet has approved the disbursement of the additional GH¢1.5 billion to provide relief to those whose funds are locked in failed fund management companies. The funds will be released in three tranches, ultimately settling 94,165 investors, representing 90% of the total validated claims of 105,178.
Economic Update
Dr. Amin Adam provided an update on the economy, highlighting positive progress in macroeconomic stability and growth. The economy grew by 4.7% in the first quarter of 2024, up from 3.1% in the same period in 2023. The Composite Index of Economic Activity (CIEA) also showed a sustained pickup, with an annual growth of 3.3% in May 2024.
To protect the poor and vulnerable during these challenging times, the government has increased resources for social interventions such as the Livelihood Empowerment Against Poverty (LEAP) Programme, the National Health Insurance Scheme (NHIS), the Ghana School Feeding Programme (GSFP), and the Capitation Grant Programme. LEAP benefits have been significantly increased, reflecting the government’s commitment to social protection.
Inflation and Fiscal Consolidation
The Minister noted that inflation continues to decline, reaching 20.9% in July 2024, down from 22.8% in June 2024. The cedi has also stabilized against major trading currencies. The government’s fiscal consolidation efforts are on track, with revenue and grants exceeding targets and expenditures below budgetary provisions.
The overall budget deficit was lower than projected, and the government is progressing toward achieving debt targets under the IMF program.
By Eugene Davis
