#1FREEDOM AND JUSTICE FATMACUL SULTAN Republic of Ghana Ministry of Finance Ghana's Turnaround Story May 2016#2Contents I. Transition Setbacks and the Turnaround Journey = II. Firm and Conservative Approach to Macroeconomic Policies III. Commitment to Reform Agenda IV. Robust Approach to Addressing Risks V. Ghana's Bright Prospects 4 16 22 31 2#3Ghana's Credit Highlights Firm Commitment to Fiscal Consolidation Resilient and Inclusive Economic Growth Sound Debt Management Strategy Yielding Results Broadbased Multilateral & Development Partner Support Encouraging Investments FREEDOM AND JUSTICE An Emerging Energy Powerhouse with Bright Economic Prospects High Institutional Strengths and Well-Established Democratic Culture 3#4FREEDOM AND JUSTICE Transition Setbacks and the Turnaround Journey#5Turnaround Key Indicators and Timeline Ghana's reform agenda and disciplined policy stance bears fruit, repositioning the economy on stronger trajectory 2012 Actual 2013 Actual 2014 Actual 2015 Actual* 2016 Target Real GDP Growth (%) 9.3 7.3 4.0 3.9 5.4 Headline Inflation (period end %) 8.1 13.5 17.0 17.7 10.1 Fiscal Deficit (% GDP) (11.5) (10.1) (10.3) (6.7) (5.3) Primary Balance (% GDP) (8.2) (5.4) (3.9) (0.2) 1.3 Wage (% of Tax Revenue) 53.3 57.6 49.1 43.8 40.6 Wage Arrears Clearance (% of GDP) 2.5 1.1 0.5 0.6 0 Gross Public Debt (% GDP) 47.8 55.9 70.2 71.6 Interest Rate (91 Day T-Bill period end, %) 23.1 19.2 25.8 23.1 Current Account Balance (% GDP) (11.8) (11.7) (9.5) (7.8) (7.4) Gross Foreign Assets (US$ billion) 5.4 5.6 5.5 5.9 Gross Foreign Assets (Months of Import Cover) 2.9 3.1 3.5 3.0 Source: Ghana 2008 2009 2010 ■ Ghana embarks on an ambitious program to adjust its public sector wage structure labelled Single Spine Salary Structure (SSSS) review ■SSSS implementation undertaken from a position of strength with record high commodity prices, very high GDP growth rates and subsidies under control ■ GDP rebasing and transition to Lower- Middle Income Country (LMIC) status ■ IMF Programme ends 2011 2012 Wage and SSSS related arrears combined with rising subsidy expenditure, higher interest payments, a shortfall in taxes. and grants puts pressure on the budget; resulting in large deficit overshoots ■ Economic management was further compounded by the onset of external pressures ■ Crude oil export commences with exports falling short of expectations in 2012 2013 O Disruption in gas supply affects power generation and fall in gold and cocoa prices further accentuates the twin deficits ■FX depreciation fuels inflation ■ Ghana implements and consults AfDB on its "home-grown" fiscal consolidation programme ■ US$ 1bn bullet Eurobond with partial liability management of Ghana 2017 Eurobond maturity to reduce size to US$531mn 2014 Migrated over 99% of public sector workers onto the new SSSS pay structure, and paid all of the arrears owed to workers ■Commences IMF negotiations $1bn back-end amortized bond to mitigate roll-over risk 2015 ■ Ghana signs 3-Year US$ 918mn ECF Programme with IMF with two (2) positive reviews so far ■ Twin deficits brought under control ■ Oil price crash $1bn back-end amortized bond with $400mn World Bank guarantee 5#6Ghana Faced Hurdles Following Transition to Lower- Middle-Income-Country (LMIC) Status World Bank Country Classification by Income below $1,005 Low income countries (LICS) Lower middle income (LMICs) Upper Middle Income (UMICS) High Income (HICS) between $1,006 - $3,975 $3,976 $12,275 $12,276 or higher In 2010, Ghana transitioned to LMIC status following rebasing of GDP "The combination of Ghana's rapid economic growth and the recent GDP rebasing exercise means that Ghana suddenly finds itself above the income limit for IDA eligibility... Perhaps the most obvious and predictable impact of Ghana's new middle-income status will be a gradual loss of access to concessional financing, particularly from the World Bank's IDA. IDA is currently Ghana's single largest donor..." Todd Moss and Stephanie Majerowicz Center for Global Development No Longer Poor: Ghana's New Income Status and Implications of Graduation from IDA GDP per Capita (Current USD) 2,000 GDP (Current USD bn) 60 1,800 1,600 1,400 50 40 660 40 2010 1,200 1,000 50 30 800 2011 Summary of Key Events GDP rebasing-> Transition to LMIC · SSSS Implementation commences Oil Production Commences 20 600 20 400 10 200 2012 IMF ECF Programme ends 0 Twin Deficits Experienced 2006 2007 2008 2009 2010 2011 2012 2013 CO 6#7Impressive 2015 Fiscal Operations Outturns Hard Won Source: Ministry of Finance, Government of Ghana, Ghana Statistical Services 2012 Deviations GHS mn % of GDP1 GHS mn Programme based budgeting and monthly budget performance monitoring reforms leads to lower deviations 2015 Deviations % of GDP1 2013 Deviations 2014 Deviations % of GDP1 GHS mn % of GDP1 GHS mn Revenues Tax Revenues 78.9 0.10 (2,783.1) (2.98) (558.8) (0.49) 971 0.69 Taxes on Income and Property (338.2) (0.45) (1,523.3) (1.63) (673.1) (0.59) (704) (0.50) Taxes on Domestic Goods & Services 8.9 0.01 (743.2) (0.80) (44.0) (0.04) 536 0.38 International Trade Taxes 645.1 0.86 (516.7) (0.55) 158.4 0.14 1,139 0.81 Non Tax revenue 180.4 0.24 245.5 (0.26) (401.5) (0.35) (293) (0.21) (389.4) (0.52) (519.1) (0.56) (576.7) (0.51) 687 0.49 Grants Expenditures Wages and Salaries Wage Arrears Interest Payments Utility and Fuel Subsidies Goods & Services Capital Expenditures 1,028.0 1.36 777.6 0.83 229.7 0.20 269 0.19 881.0 1.2 922.6 1.0 5.5 0.0 435 0.31 245.0 0.33 1,202.6 1.29 (803.8) (0.71) (274) (0.20) 339.0 0.45 135.9 0.15 (145.1) (0.13) (25) (0.02) 354.6 0.47 (293.3) (0.31) 691.6 0.61 (468) 0.33 (1,001.0) (1.33) 914.9 0.98 1,511.8 1.33 732 0.52 For the first time since 2006, Ghana will achieve a primary fiscal balance surplus in FY2016 Overall Fiscal Balance (% of GDP) Strong political will backs fiscal consolidation with wage bill control institutionalized and arrears being aggressively cleared SSSS Arrears deferred ■Wage Bill (% of GDP) (GHS billions) ■Road Arrears Non Road Arrears 9.1 1.3 -0.2 -1.3 -3.4 8.9% 8.8% 8.3% -3.9 7.5% 7.4% -5.4 -8.2 2.1 -4.0 1.5 -5.3 -6.5 -6.7 0.4 0.3 0.0 -11.5 -10.1 -10.2 2010 2011 2012 2013 2014 2015 2016 budget 2012 2013 2014 2015 2016 budget 2012-2014 2015 2016 budget 7#8FREEDO LAND JUSTICE Firm and Conservative Approach to Macroeconomic Policies#9Resilient Growth Despite Macro Pressures In size and per capita terms, Ghana's GDP ranks favourably GDP (US$ billions) Côte d'Ivoire (Ba3/-/B+) Ghana (B3/B-/B) Kenya (B1/B+/B+) Cameroon (-/B/B) Gabon (B3/B-B+) 13.8 Zambia (B2/B/B) Sources: WEO 2015, Ministry of Finance amongst peers 28.5 24.5 33.7 37.1 Ghana is focused on inclusive growth and its real GDP growth has historically outperformed peers GDP per Capita (US$) Real GDP Growth (Annual %) 1 ■Ghana Sub-Saharan Africa World 1,460 8.0% 7.3% 1,339 42.4 5.2% 1,432 5.0% 4.3% 3.8% 4.0% 3.9% 3.5% 1,234 3.4% 3.3% 3.3% 8,580 2012 1,576 2013 2014 2015 5.4% 3.8% 3.6% 2016f Note: (1) Estimates. The real GDP growth data compares data from Ghana and IMF World Economic Outlook (WEO) October 2015 data for Sub-Saharan Africa (SSA) and World. Ghana is determined to foster inclusive and sustainable growth under its transformational transition agenda ■ Front-loaded adjustments within IMF supported macroeconomic programme being balanced with improvements in real-sector performance and protection of vulnerable section of society ■ Social intervention was traditionally focused on housing, power and utility subsidies. New approach now sees far reaching initiatives such as alignment of household tax to income threshold levels and statutory funds to protect vulnerable section of society, boost healthcare delivery, education and job creation ■ Growth, revenue boost, job creation as well as reduction in import bill and productivity disruptions follows investments in domestic Gas-to-Power infrastructure; boosting Ghana's macro prospects ■ Broad based multilateral and bilateral funding and policy support continues to encourage private investments in Hydrocardon (TEN, Sankofa and Jubilee Fields), Services and Agriculture sectors ■ Despite short term challenges, such as inflation and commodity prices pressures, Ghana's fundamentals and prospects remain robust ■ Ghana's diverse economy, rich commodity endowment, young vibrant and skilled population, and strong institutional framework support its long-term growth potential 9#10Growth Underpinned by Well Diversified Economy Real GDP contribution by sector (2015) Agriculture; 20.3% 7.9 Education; 3.8% 4.8 Public Administration & Defence; Social Security; 5.7% Primary Sector 2.4 Mining and Quarrying; 0.5% (2.9) Manufacturing; 4.8% 2.2 Construction; 13.2% 3.3 5.1 Business, real estate and other service activities; 21.4% Tertiary Sector Secondary Sector Electricity, Water & Sewage; 1% 11.3 (1.4) Financial and Insurance; 7.7% 13.4 Information and communication; 13.3% Oil; 5.8% 0.9 Transport and Storage; 2.4% 3.0 Sector Growth Rate - 2015 Hydrocarbons not a mainstay of Ghana's economy but Gas-to-Power infrastructure are growth multipliers Oil Exports & Imports Values Mat ed Oil Revenue just 3 % Oil Revenue just 1% of Total Revenues 3% of GDP 1% ilk00 2011 2012 2013 2014 2015 ■Crude Oil Exports Oil & Gas Imports 2015 97% ■Oil Revenue Source: Ministry of Finance, Ministry of Power, Ghana Statistical Service 2015 99% Other Revenue 2.1 Trillion Cubic Feet of Gas Reserves estimated 459 mmscf of Domestic Gas Produced Daily with 100mmscf Daily Delivery to Power Plants estimated 3500 MW of Power Generation with 40% Excess Capacity projected for 2016 10#11Improving External Sector Performance and Outlook 2015 Trade Deficit due to Fall in Commodity Prices Imports f.o.b --Trade Balance/GDP (%) Exports f.o.b 12.8 13.6 13.8 13.2 10.4 8.0 5.8 Current Account Deficit (% GDP) Stabilizes 2010 ■Current Account Deficit (% GDP) 2011 2012 2013 2014 2015 -5.6 -7.7 -7.9 -9.2 -10.2 -3.6 -10.9 (8.0) (7.8) (10.9) (8.6) (14.6) (14.3) (9.0) (9.5) (15.8) (17.8) (17.6) 2009 2010 2011 2012 2013 2014 2015 (11.8) (11.7) Improving Gross Foreign Assets Position Gross Foreign Assets (US$ millions) 5,452 5,632 5,442 5,885 5,461 4,645 2010 2011 2012 2013 2014 2015 FDI Resilient to Macroeconomic Challenges Indicating Investors Long-Term View on Ghana FDI --FDI (% of GDP) Economy Economic Freedom Rank Sub Saharan Africa Rank 3,508 3,222 3,293 3,357 Mauritius 10 1 3,226 3,102 Botswana 36 2 2,856 8.7% Cape Verde 60 3 8.4% 8.5% 8.6% 8.2% 7.9% Rwanda 65 4 Ghana 71 South Africa 72 56 6.6% Madagascar 79 7 Swaziland 91 8 Uganda 92 9 Namibia 93 10 2011 2012 2013 2014 2015p 2016p 2017p Sources: Bank of Ghana, Heritage Foundation Index of Economic Freedom 2015 Ghana's scores on third party rankings for economic freedom have been improving over the past 5 years. Notably, Ghana's scores have improved for control of government spending, freedom from corruption and monetary freedom 11#12Ghana Maintains Tight Monetary Policy Stance From H2-2015, Cedi began stabilizing and falling back into sustainable band as seasonal pressures subside, inflows increase and policy actions take effect --GHS: USD (period end) GHS-USD 3.79 5.0 3.00 4.5 2.20 4.0 1.88 1.43 1.47 1.55 3.5 1.22 0.97 3.0 2.5 2.0 2007 2008 2009 2010 2011 2012 2013 2014 2015 Jan-15 May-15 Sep-15 Jan-16 May-16 Cedi depreciation combined with fuel and utility price adjustments pushed inflation out of target band. However, tight policy stance, reduced FX volatility and lower fuel prices stabilized inflation outlook Combined -Food MPR Non Food Feb 2014: MPR raised to 18.0% Sept 2014: MPR raised to 19.0% Nov 2014: MPR raised to 21.0% May 2015: MPR raised to 22.0% July 2015: MPR raised to 24.0% Sept 2015: MPR raised to 25.0% Nov 2015: MPR raised to 26.0% 30 25 25 20 15 10 13.5 13.8 14.0 14.5 14.7 14.8 15.0 15.3 15.9 16.5 16.9 17.0 17.0 16.4 16.5 16.6 16.8 16.9 17.1 17.9 17.3 17.4 17.4 17.6 17.7 5 7.1 7.5 8.2 7.0 0 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 19.0 18.5 19.2 18.7 5.0 5.1 5.8 6.5 6.6 6.8 6.9 7.0 7.2 7.2 7.3 7.4 7.6 7.7 7.8 7.8 7.9 8.0 8.2 8.3 8.3 8.4 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 From H2-2015 Cedi stabilized as FX inflows boosted reserves and investor confidence improved due to: Success of US$1bn IDA guaranteed bond Inflows from donor partners Cocoa sales inflows IMF Balance of Payments support inflows Monetary policy tools have also been employed to quell Cedi depreciation and the concomitant impact on inflation: MPR raised to 26.00% in November 2015 Cash Reserve at 10.00% from 11.00% Net open position of banks lowered on both single currency and aggregate currency basis Bank of Ghana to stop financing government in 2016 2-yr note opened to foreign investors Tighter customs operations and tariff valuation IMF policy support Source: Bank of Ghana 12#13Oil Funds Savings Buffer in Low Price Regime Ghana's prudent oil revenue management framework ensures savings provide a buffer in challenging times. For the first time since the oil funds were set-up, US$53.7mn was withdrawn from the GSF in Q2-2015 to meet the budget shortfall Analysis of Petroleum Receipts (2012 - 2015) Distribution of Petroleum Receipts (2015) Item (US$ Mn) 2012 2013 2014 2015 Item Jubilee Royalties 150.6 175.0 192.7 104.2 Carried and Participating Net Receipts for GOG 390.4 453.6 499.3 270.1 Interest o/w ABFA Surface Rentals 0.6 0.7 1.8 0.5 Royalties from SOPCL 0.3 0.2 0.2 0.0 Corporate Income Tax 217.0 284.5 20.4 PHF income 0.1 0.0 Price Differentials 0.3 0.4 Gas 0.6 o/w GIIF o/w Ghana Petroleum Funds o/w Heritage Fund o/w Stabilization Fund Total 542.0 846.4 978.9 396.1 US$ mn 261.0 239.3 41.9 21.7 6.5 15.2 Petroleum funds managed to ensure a buffer to low prices and create savings for future generations Utilization of Stabilization Funds to Support Budget and Ensure Timely Debt Service in Low Oil Price Environment Ghana Heritage Fund - Savings for Future Generations Item (US$mn) 2012 2013 2014 Opening Balance 54.8 71.9 319.0 2015 286.6 Item (US$mn) 2012 2013 2014 2015 Receipts during the year 16.9 245.7 271.8 15.2 Opening Balance 14.4 21.7 128.1 248,9 Income from Investments 0.2 1.4 1.5 0.5 Contingency Fund (17.4) (23.8) Receipts 7.2 105.3 116.5 6.5 Debt Service Account for (288.3) Debt Repayment Income from Investments 1.1 4.3 3.9 Annual Budget Funding Amount (ABFA) (53.7) Sinking Fund (47.5) Closing Book Value 21.7 128.2 248.9 259.3 Closing Book Value 71.9 319.0 286.6 177.4 Source: Annual Report on the Petroleum Funds 2015 13#14Macro Results Achieved Despite External Shocks Tighter expenditure control in-place and revenues resilient despite oil price crash-reflecting increased development partner confidence and success of tax reforms -Revenues (%GDP) --Expenditure (%GDP) Brent ($/bbl) 110 2015 Oil Budget Price $99 100 30.9% 31.1% 90 2015 Revised Oil Budget Price $57 28.3% 80 26.4% 2016 Oil Budget Price $53 24.3% 70 60 Q1 2016 Average WTI Oil Price $32 23.9% 50 22.8% 21.6% 40 Current WTI Oil Price $48 20.5% 20.6% 30 20 2016 Proposed Revision to Oil Budget Price* 35-40 2013 2014E 2015e 2016f* 2017f* Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Cocoa prices saw some recovery in 2015 Gold prices remained under pressure Cocoa (US$ per tonne) Gold (US$ per ounce) Grant inflows just returning ■Total Grants (GHS' mn) 2,689 Power Cuts 3500 1800 3000 1600 1400 2500 1,160 739 814 1200 2000 1000 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 2012 2013 2014 2015 Ghana is better prepared to face risks ahead and protect the bright prospects of its economy Sources: Ministry of Finance, Bloomberg Addressed Productivity disruptions which led to fall in tax revenues now effectively addressed with domestic gas-to- power production to mitigate gas supply disruptions from WAGPP 14#15Viable Infrastructure Investments for Sustainable Growth Ghana's is laying the foundations for future sustainable growth with investments in viable world-class infrastructure projects OF. JOHN EVANS AFA Energy Sector Projects No. 10 State Am TEN FPSO Arrives Ghana In march 2016 the John Evans Atta Mills, Ghana's second floating production, storage and off-loading (FPSO) vessel, built for oil production arrived in Ghana TEN development field from its construction base in Singapore Sea & Air Ports •Expansion & refurbishment of Accra, Kumasi and Tamale Airports •Expansion of Tema & Takoradi harbours Transport Sector Projects Rail Infrastructure Western Line re-construction (Sekondi-Takoradi via Kojokrom) to provide sub- urban passenger rail transport GHANA GAS GHANA NATIONAL GAS COMPANY Project Name Capacity Status Atuabo Gas Plant 459mmscf per day Running Karpowership 225MW Running Ameri 250MW Running Asogli Phase II 360MW Running Tico Expansion 110MW Running VRA T2PP 38MW Mechanical Completion ⚫Oil services Port Fibre Optic Network 800km optic fibre line which runs through 126 communities along the eastern corridor from Ho to Bawku to Tamale Roads Construction of urban and rural roads, highways and bridge networks 15#16Commitment to Reform Agenda FREEDOM AND JUSTICE#172016 Budget in Summary With the 2016 budget, fiscal deficit is expected to fall to 5.3% of GDP on the back of continued implementation of Ghana's “home grown” policies and disciplined pursuit of IMF Programme measures Tax Measures to Further Boost Revenue - Phase II of revenue modernization initiatives rolled-out in 2015 Increase in excise tax rate and full rollout of the excises stamp project ☐ ☐ Revenue Administrative Bill to be laid in Parliament in 2016 Joint audit teams to conduct investigations Tax and customs systems being integrated Full implementation of the Income Tax, 2015 yielding additional revenue equivalent to 0.3% of GDP Moving all processes to an electronic platform and accelerating the shift to a functional form of administration in all tax offices Implementation of the Electronic Point of Sale project Tight Expenditure Control and Continuous Monitoring Public sector wage negotiations within budgetary constraints Continuation of the policy of net freeze on employment in all sectors of the public service (except education and health) Progressive implementation of the electronic payroll and accounting systems initiatives (GIFMIS) Continue to implement the existing price adjustment mechanism for utility and fuel prices Source: 2016 Budget Statement, Ministry of Finance and Economic Planning 2016 Budget Key Assumptions: Real GDP Growth: 5.3% Inflation (end of period): 10.1% Oil Benchmark Price: $53.05 Revenues Expenditures 2015 Revised Budget 2016 Budget Ghc million % GDP Ghc million % GDP 30,526 22.8 38,038 24.0 37,930 28.3 43,505 27.5 Fiscal Balance (9,727) (7.3) (8,407) (5.3) Total Financing 9,727 7.3 8,407 5.3 4,978 3.7 5,441 3.4 Domestic Foreign 4,749 2.5 3,399 2.1 (432) (0.3) Other 17#182016 Budget in Numbers Deficit will fall to 5.3% of GDP on the back of continued implementation of Ghana's home grown policies, new revenue measures and firm expenditure control Deficit falls to 5.3% of Full implementation GDP of the Income Tax Act 2015 25.6% increase in non petroleum tax income Wages 40.6% of Tax Revenues vs 44.2% in 2015 No increase in subsides in 2016 2015 2015 Revised Ghc mn Budget Budget 2016 Budget Ghc mn 2015 Budget 2015 Revised 2016 Budget Budget Total Revenue & Grants 32,406 30,526 38,038 Total Expenditure 39,152 37,930 43,505 Taxes on Income and Property 11,229 9,411 12,072 Compensation of Employees 12,313 12,313 14,024 Wages & Salaries 10,286 10,286 11,7723 Company Taxes 3,750 3,753 5,501 Social Contributions 2,026 2,026 2,301 Company Taxes on Oil 1,652 52 111 Use of Goods and Services 1,970 1,856 2,537 Other Direct Taxes 5,826 5,604 6,459 Interest Payments 9,577 9,350 10,491 Taxes on Domestic Goods and Services 9,472 9,348 11,324 Domestic 8,034 7,734 8,317 External 1,543 1,616 2,173 Excises 2,427 2,303 2,894 Subsidies 50 50 50 VAT 5,749 5,760 6,972 Grants to Other Government Units 7,408 7,190 9,651 National Health Insurance Levy (NHIL) 1,003 1,003 1,145 Social Benefits 61 61 75 Communication Service Tax 293 281 314 Other Expenditure 816 753 International Trade Taxes 4,706 3,275 5,473 Capital Expenditure 6,957 6,357 6,677 Overall Balance (Commitment) (6,746) (7,404) (8,407) Social Contributions 183 183 352 (percent of GDP) (5.0) (5.5) (5.3) Non-Tax Revenue 5,267 5,214 7,210 Overall Balance (Cash) (8,816) (9,727) (8,408) Grants 1,551 2,002 1,608 (percent of GDP) (6.5) (7.3) (5.3) Source: 2016 Budget Statement, Ministry of Finance 18#19Policy Initiatives Driving Fiscal Reform Results Policies are focused on delivering the transformation agenda by addressing economic imbalances, financing development through sustainable debt management and consolidating the transition to middle income status Tax measures will further boost revenue 2016 Tax Policy to focus on measures that will ensure tax compliance rather than introduce new tax handles Rationalization of tax system VAT threshold / base-rate Excise objective ■ Temporary Measures Financial Services Levy and Import Duty Electronic Platforms Tax and Customs modernization, integration and segmentation Policy ☐ ☐ Expenditures Ongoing Implementation of Treasury Single Account (TSA) Ghana Integrated Financial Management Information System (GIFMIS) Wage negotiations conducted ahead of budget and net freeze on employment Payroll/HRMS ■ ☐ System upgrades / E-Systems Introduction of Electronic Payroll Input Forms Interface/Integration (IPPS) Pensions reforms Social intervention Revenue Legislation Review of all tax laws and drafting of new regulations and practice notes: Bills Income Tax Act ☐ PFM Bill (2016) VAT ☐ Excise Mum-B Bill (2017) ☐ Customs ☐ Sources: Ministry of Finance Regulation (2016/17) Bank of Ghana Deposit Insurance Legislation Expenditures ☐ Debt Management Medium Term Debt Management Strategy approved ☐ Strict handle on contingent Liabilities Refinancing Buyback ☐ ☐ Escrow On-Lending Moratorium on borrowing and contracts Lower deficit to finance Interest rate hedge Sinking fund to buffer roll-over /maturity risks Ghana Infrastructure Investment Fund 19#20Ghana On-Track with Key IMF Programme Targets April 2015 Target April 2015 Actual Criteria Met 1st Review Aug 2015 Revised Aug 2015 Actual Criteria Met 2nd Review Dec 2015 Revised Quantitative Criteria Primary Fiscal Balance (544) 46 Criteria met (380) 237 Criteria met (422) (floor, Cedi mn) Wage Bill 3,413 3,341 Criteria met 6,857 6,815 Criteria met 10,286 (ceiling, mn cedi) Net International Reserves of BoG 1,042 1,186 Criteria met 147 566 Criteria met 2,278 (floor, USD, mn)1 Net Domestic Assets of BoG 5,755 5,561 Criteria met 8,772 7,846 Criteria met 3,410 (ceiling, Cedi mn)² Net Change in Stock of Arrears (424) (565) Criteria ceiling raised (ceiling, Cedi mn) (1,001) (1,525) Criteria met (1,561) Continuous Performance Criteria Gross Govt. Financing by BoG Missed 14,614 14,873 15,814 15,017 Criteria met 15,814 (ceiling, Cedi mn) New external non-concessional debt 0 0 (ceiling, USD mn) by small margin Criteria met & ceiling raised 1,000 150 Criteria met 2,500 Indicative Target Program central inflation target (12mth % change) Social Protection (floor, Cedi mn) 15.4 16.8 Efforts in progress 15.0 17.3 Efforts in Progress 19.6 388 252 Efforts in progress 954 Criteria Met 1,294 Following approval of the IMF Programme in Q2 2015, Ghana received USD114.17mn Following 3 consecutive successful reviews and the achievement of virtually all targets set, Ghana has now received a total of US$343.7 million in disbursements The remaining 6 disbursements for 2016/17 are expected to be made according to schedule; following Ghana's observance of Programme performance criteria and completion of reviews Notes: (1) Programme definition excludes foreign currency deposits in Bank of Ghana (BOG) (2) The programme computes net domestic assets using the exchange rate of GHS3.40: US$1.00 Source: IMF, Shortened list of performance criteria, January 2016 ☐ IMF commended Ghana for the broadly satisfactory program implementation so far IMF pointed out that the fiscal performance in particular has been encouraging IMF welcomed Ghana's medium term debt management strategy Ghanaian Authorities not complacent and now more resolute to see through structural reforms 20#21Bi-Partisan Support for 3-Year IMF Programme The 3-Year ECF IMF Programme enjoys broad support across Ghana's political and academic class Restore debt sustainability and macroeconomic Stability 2 Return to high growth and job creation 3 IMF Programme Pillars Protect social spending Frontloaded Fiscal Adjustment Restore debt sustainability • Curtail expenditures Pillar I . Mobilize revenues Entrench Structural Reforms • Only US$114.8 million disbursed upfront Budget transparency Payroll control and clean-up Pillar IV Pillar II • Right-sizing the civil service Improve revenue collection "Home-Grown Programme" Tax Policy and Revenue Administration Public Expenditure Management and Commitment Control ■ VAT rate increased tax base broadened ■Road fund and special import levy ■ National fiscal stabilization levy ■Change in petroleum tax to ad valorem ■ Environmental tax ■ Increased withholding tax ■ Free zone income tax review etc ■ Ghana Integrated Financial Management Information System (GIFMIS) fully in place ■New HR management system in progress Weaning off subvented agencies Payroll system upgrade and audits ■Net freeze on employment in some sectors ■ Moratorium new projects ■ Automatic fuel and utility price adjustment ■ Comprehensive debt management strategy Preserve Stability . Protect vulnerable and poor Pillar III Targeted social safety nets Strengthen Monetary Policy Effective inflation targeting framework Debt Management ■ Plan to move to recovery schemes for commercially viable projects ■ Emphasis on paying for counterpart funds to fast-track disbursement of existing loans Ghana is highly committed to the IMF Programme. Most of the measures agreed with IMF have been incorporated into the 2015 and 2016 budget and are already on track to being implemented Source: Ministry of Finance, IMF 21#22KAFADENIZ POWERSHIP FATMAGUL SULTAN Robust Approach to Addressing Risks FREEDOM LAND JUSTICE#23Containing Election Year Pressures "The bane of our economic management has been the cyclical huge election year budget deficits. It is an unfavourable narrative to which Ghana has become famous. I have assured the nation and our partners that my administration will exercise strict fiscal discipline even in this election year In order that we can also transform this negative narrative of our country.." President J D Mahama State of the Nation Address, February 25, 2016 . Election years were characterized by large expenditures resulting in high fiscal deficit, inflation and unstable exchange rate, among others The effects of election year cycles (1992, 1996, 2000, 2004, 2008, 2012) have been observed as follows: × Fiscal deficit averaging 9.2 % of GDP × End of year inflation averaging 20.2% for the period × Average inflation averaging 23.4% for the period; and × interest rates developments averaging 30.3% for the period. × General macroeconomic imbalances flows into the post-election years arising from payments of outstanding claims Historical Fiscal Deficit Trend Around Elections Hard Measures Undertaken to Mitigate Effect of Election Cycle Government has analysed the situation and prudent measures are being taking to reverse this trend Commitment to automatic utility tariff and petroleum price adjustments; eliminating subsidies For the first time, wage negotiation were concluded before the 2016 budget was finalised Implementation of IMF three-year Extended Credit Facility and related structural reforms, thereby, improving credibility in the budget and providing confidence on prudent execution of the budget 0 -2 -4 -6 -8 Taking hard and unpopular decisions such as energy sector levies, utility tariff adjustment in an election year -10 -12 High level political commitments on containment of election year expenditures -14 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Jan-Nov '15 Fiscal Consolidation bearing fruits and mimickg 2004 cycle 23#24Navigating External Risks Front-loading of fiscal reforms since 2013 was good preparation and consolidation-to-growth strategy now materializing Subdued Demand Diminishes Global Growth Outlook Global economic developments shows downside risk due to slow down and rebalancing of Economic activity in China and Brazil; lower prices for energy and other commodities, gradual tightening in monetary policy in the United States ▪ Global growth to inch up to 3.4% in 2016 from 3.1% in 2015 ■ Growth in Advanced Economies to rise from 1.9% to 2.1% in 2016 ■ Growth in Emerging Markets and Developing Economies to increase to 4.0% ■ Growth in Sub-Saharan Economies to increase to 4.1% ■ In contrast, Ghana expected to grow from 4.1% to 5.2% Containing the Risks to Ghana's Economy Government has shown the highest commitment to maintain fiscal discipline Forecast in the 2016 budget was conservative so as to limit expectations International commodity price has both a plus and a minus. Positive developments for balance of payments position and allows for entrenching elimination of subsidies on the expenditure side. Impact on revenue side is limited as Annual Budget Funding Amount (ABFA) is effectively ring-fenced to assist in funding targeted adjustments Government is monitoring this over the next few months and take appropriate measures to contain it. The sectoral policies and oil and gas developments to insulate Ghana against lower global growth Possible revision of the 2016 Budget (as with 2015) to accommodate any further shocks to the budget. Scenario-Based Approach to be Adopted in 2016 Budget Revision to Following Areas Budget Oil Price Recurrent Expenditures Oil GDP Growth Target Oil Revenues Non-Oil Revenues Capital Expenditures Savings Buffer Amount Available for 2016 Use Fiscal Deficit Target Budget Financing Requirement 24#25Refinancing Ghana's 2017 Eurobond Maturity Ghana is confident that its 2017 Maturity with US$531mn outstanding will be easily refinanced under plausible scenarios Market Condition Improve Market Condition Remains The Same World Bank Guarantee Not Available ■ Clean Eurobond at an affordable price ■ Clean Eurobond at expensive price World Bank Guarantee ■ World Bank backed Eurobond at Available an affordable price Increase in Oil Fund Savings (Sinking Fund) ■ Combination of clean Eurobond, oil savings (Sinking Fund) and balance of World Bank backed Eurobond issued in 2015 Assumption: oil price increase, lower deficits holds Update on Balance of 2015 US$1bn Eurobond Deployed for Refinancing Available Balance c.257mn ■ World Bank backed Eurobond could improve pricing ■ Combination of clean Eurobond and alternative funding (DFIs, syndicated loan, bilateral facilities etc) and oil savings (Sinking Fund) / balance of World Bank backed Eurobond issued in 2015 ■ Assumption: oil price stay stagnant, lower deficits holds Market Condition Deteriorate ■ Ghana will not issue a clean Eurobond at any price ■ Ghana will not issue World Bank backed Eurobond at any price ■Combination of alternative funding (DFIs, syndicated loan, bilateral facilities etc) and oil savings (Sinking Fund) balance of World Bank backed Eurobond issued in 2015 ■ Assumption: oil price decline, deficits deteriorates Successful local currency issuances indicate increasing domestic capacity Amount Amount Foreign Auction Auctioned Oversubscribed Participation Close Rate Bond (GHS) Sinking Fund Balance Update Domestic bonds issued after local bond bookrunners were appointed • Q4 2015 Balance c. US$100mn 5 Year (30-Nov-2015) 400mn 244m 85% 24.00% Interest Saving c. US$5.1mn 5 Year (7-March-2016) 500m 267m 67% 24.75% from Refinancing Available Balance ⚫ c.US105mn 3 Year (21-April-2016) 300m 800m 71% 24.50% Source: Ghana MOF 25#26Sustainable Debt Management Policy Initiatives 200% From a historic perspective, Ghana's public debt to GDP Ratio tapering in 2015 after 2014 highs yet still below HIPC levels. Public debt growth levels also tapering 29% 160% 120% Gross External Debt/GDP Gross Domestic Debt/GDP Growth In Debt 27% 29% 21% 80% 21% 153% 19% 115% 108% 102% 31% 29% 73% 29% 60% 6% 15% 11% 15% 17% 10% 20% 16% 20% 16% 20% 25% 39% 43% 20% 23% 28% 40% 0% -40% 2000 2001 2002 2003 2004 2005 2006 2013 2014 2015 Focus of Ghana's International Debt Capital Markets Activities Refinancing: ■ Smoothen maturity profile ■ Minimise interest burden Minimise roll-over risk Finance Capital Budget: Match long term investments in capital projects with long term financing Less reliance of short term domestic debt with introduction of bookbuilding Unlock Counterpart Funds Raise funds to meet Ghana's commitment under counterpart funded unlock development projects and partner support Breakdown of External Debt Other Concessional , 5.2% Commercial, 10.9% 2015 2007 2008 2009 2010 2011 2012 Breakdown of Domestic Debt Multilateral, 14.3% Foreign Investors 5.0% Export Credits, 3.2% Bilateral, 2.9% Non-Bank Sector 9.4% Standard Loans 0.4% 2015 Banking Sector 14.1% Bank of Ghana 6.64% Deposit Money Banks 7.43% In 2016 the Medium Term Debt Management Strategy (MTDS) 2016-2018 was approved. This strategy seeks to make debt management and financing/refinancing an integral part of the overall macroeconomic policy framework The MDTS sets benchmarks for key risk areas: ■ Foreign Currency Risk: 65% +/- 5% of external debt to be US$ denominated Interest Rate Risk: Floating rate debt not to exceed 20- 25% and hedging to lock-in lower rates ■ Re-Financing Risk: Short-term and maturing debt to remain below 25% and Average Time to Maturity to be not less than 6.5 years 26#27Deceleration in Pace of Growth of Ghana's Debt Significant slowdown in growth pace of external debt from high of 30% in 2013 to under 10% in 2015 ■External Debt (US$ mn) 15,782 13,872 11,902 9,154 7,653 2011 2012 2013 2014 2015 External Debt (% GDP) - External Debt Growth Sizeable arrears clearance 39.2% 27.7% 22.9% 19.8% 30.0% 22.4% 19.6% 2011 2012 2013 42.8% 16.6% 13.8% 2014 2015 Deceleration of growth pace of domestic debt set to be more impressive as US$1 billion of domestic debt buy-backs are fully implemented with Ghana 2030s Eurobond maturity proceeds ■Domestic Debt (US$ Mn) 12,559 10,916 10,621 9,997 7,697 Domestic Debt (% GDP) Domestic Debt Growth 100% 67% 61% 46% 30.9% 29.2% 28.8% 18% 19.6% 25.0% 2011 2012 2011 2012 2013 2014 2015 2013 Sizeable arrears clearance 2014 2015 27#28Clear Strategy to Assure Debt Repayment Ghana has demonstrated clear commitment to honoring its obligations to investors ■ Ghana considers debt repayment as a statutory obligation, as such, repayments of debt ranks ahead of most other expenditure items ■ Debt Sinking Fund established and backed by legislation ■ Medium term debt management strategy approved ▪ Efforts underway to extend and smoothen Ghana's debt maturity profile, to avoid refinancing risks, and diversify sources of funding Debt Sinking Fund Established Changing from "bullet" to amortizing repayments Hedge against forex movements with annual US$ based oil repayment revenue flows In 2014, US$100mn transferred from excess over cap on Ghana Stabilization Fund Efforts to Extend Maturity Profile Yielding Result (book building domestic term bonds and Eurobonds) Long Term, 14% Long Term, 21% Short Medium Term, 27% Term, 59% 2003 Source: Ministry of Finance Medium Term, 32% 2015 The External Debt from 2012 has been reclassified to reflect the facility type per creditor FX rate used for debt calculation: US$:GHC 3.89 Sound Assumptions Backed Viability of the Debt Sinking Fund at Set-Up Amount in Sinking Fund US$ 100mn Oil price assumption Oil production US$57 per barrel 103,000 bbls a day The Sinking Fund will be continuously furnished from future oil revenue savings Gas production 459 mmscf gas/day Efforts underway to extend and smoothen Ghana's debt maturity profile Proactive efforts to refinance external and domestic debt to extend tenors and reduce debt service costs ✓ Deepening the domestic markets by (a) adopting book building approach, (b) opening up 2-year bonds to non-residents investors, (c) reinvigorating the primary dealer process and (d) revamping pensions act Short term bills to be used only for liquidity management and repayable immediately from the annual revenue flows Financing for Development Short Term, 46% ✓ Long-term debt to finance CAPEX by extending the domestic debt yield curve (through bookbuilding approach and pension act reforms) and selective use of Eurobond markets Utilize concessional loans and grants to finance social infrastructure ✓ Establishment of escrow / debt service accounts and special levies to assure repayment for on- lent facilities to SOES Sovereign wealth fund (SWF) to leverage oil and gas revenue to access markets Ghana Infrastructure Investment Fund (GIIF) Act passed in 2014 to enhance SWF Shift from vanilla guarantees to project / insurance structures; reducing fiscal risks Use of alternative risk management strategies such as hedging 28#29100% 80% 60% 40% 20% 34% 26% 0% Jan-15. (GHS billions) Clear Strategy to Assure Debt Repayment (cont'd) 36% 27% Gross External Debt/GDP 39% 28% 40% 27% Currency volatility impacts on published debt metrics without considering mitigating factors 41% 27% 45% 27% Gross Domestic Debt/GDP 36% 27% Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Efforts underway to curtail interest expense by reducing and/or limiting high cost domestic borrowing 43% 28% 41% 28% End Period Exchange Rates 41% 28% ■Domestic Debt Service ■ External Debt Service 30% 9.3 15-Year tenor, US$ 1 Billion World Back 2016 Domestic Spot Yield Curve 2014 Domestic Spot Yield Curve Post move to bookbuilding 1.6 7.1 Partially Guaranteed 25% 1.0 Back-End 4.4 Amortising 0.6 7.7 2.4 6.1 1.4 1.6 Eurobond Issued in Q4 2015 to 20% 0.6 3.8 03 03 1.1 1.3 1.9 refinance high-cost, short-term debt 15% 2010 2011 2012 2013 2015 O/N 91 Days 182 Days 1 Year 2 Years 3 Years 5 Years 7 Years 2014 Eurobond maturity profile being smoothened and extending further than Sub-Saharan African Peers (ex- South Africa) Ghana's Eurobond Maturity Profile as at end 2013 531 1,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Ghana's Eurobond Maturity Profile as at end 2015 531 2018 2019 2020 1000 333 333 334 333 333 333 29 41% 29% 5.0 4.0 41% 30% 3.0 2.0 1.0 0.0 Dec-15#30Plugging the Power Deficit Presents Opportunities for Ghana to Export Electrical Power to Neighbours Power supply disruptions, which negatively impacted economic output, occurred due to (i) damage to the West African Gas Pipeline (WAGP), (ii) seasonal drop of water at dams, and (iii) increased demand as electricity access improved In 2015, Ghana successfully implemented a series of short-term and longer horizon projects which effectively addressed power shortfalls and now contributing to realization of Ghana's growth potential Supported by World Bank, AfDB, USA and independent power producers, Ghana is pursuing a programme of liberalising the energy sector, which includes: ✓ Institutional reforms ✓ Getting energy SOEs more commercially oriented and financially self-sustaining New independent power projects THE WORLD BANK IBRO IDA TULLOW POWER AFRICA In KOSMOS ENERGY 78% of Ghana's population already connected to the national power grid 459 mmscf of Domestic Gas with 100mmscf Daily Delivery to Power Plants 3500 MW of Power Generated with 40% Excess Capacity Short-to-medium term measures expected to add over 3000 MW of electric power to national grid by 2018 Select Projects Expected Completion Plant Capacity 4,000 3,500 Kpone Thermal Power Complete 220MW Tico Expansion Complete 110MW 3,000 Karpowership Complete 225MW 2,500 Ameri Complete 250MW 2,000 Asogli Phase II Complete 360MW 1,500 Tico Expansion Complete 110MW 1,000 Mechanical Completion 38MW 500 CenPower Before end of 2018 350MW 0 Jacobsen Before end of 2018 360MW Amandi Before end of 2018 240MW VRA T2PP Annual Peak Demand (MW) --Total Generation at Peak (MW) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Energy Levies - Ensuring Financial Viability of Ghana's Energy SOES TRIC GHANA AUTHORITY GRIDCO The SOEs in the energy sector have faced financial challenges that have affected their viability ■This necessitated the introduction of the energy sector levies which goes directly into Ministry of Finance's account- the game changer for financial sustainability for the sector Revenues for all energy sector SOEs to be centrally collected by PURC with debt repayments prioritized The sustainable financing will improve energy production and supply, thereby, promoting growth and protect jobs ■ The levies imposed are intended to be temporary ■ Government recently reduced electricity tariffs for lifeline consumers and other vulnerable groups to cushion them ■ Utility and fuel subsidies eliminated 30#31FPSO KWANE MORUMAN MVZY Ghana's Bright Prospects FREEDOM AND JUSTICE#32Ghana's Hydrocarbon Sector Takes-Off Mindful of experience of peers, a solid framework in-place to manage Ghana's hydrocarbon sector Ministries of Petroleum and Power Formulate, implement, monitor and evaluates energy sector policies Petroleum Commission Regulate, manage and coordinate activities in the upstream petroleum sector GNPC + GNGC Exploration, production, and trading of oil and gas VRA + Grid Co + ECG Upstream gas offtaker, power generation, transmission and distribution Ghana's hydrocarbon sector continues to attract investments with growing reserves position Proven Gas Reserves: Oil Production (million bbls) 2.1 trillion cubic feet 62.4 Proven Oil Reserves: 1,1143 million barrels Gas Production ("000 MM Scf) 40.5 41.3 35.6 37.2 37.6 24.2 26.4 1.2 2010 2011 2012 2013 2014 2015f 2016f 2017f 2014 2015f 2016f 2017f Millions 4 3 2 1 0 January Quantity Produced (bbls) (LHS) --Daily Production Average (bbls) (RHS) February March 26.7 23.0 10.4 Average Production of over 100,000 bpd in 2015 Thousands 120 100 - 80 DEEPWATER TANO TULLOW 49.95% (op) 60 Wawa Discovery Area 40 TEN Development & Production Area 20 TEN Fields 0 April May June July August September Tullow 47.175% Wawa Teak Jubilee Field Development Ghana WEST CAPE THREE POINTS TULLOW 26.405% Akasa Mahogany Numerous Positive Developments Amendments to the Petroleum Revenue Management Act have improved flexibility of oil price benchmarking for the budget while also firming up the distribution formula for receipts Preliminary ruling on of the International Tribunal on the disputed area of the Ghana- Cote D'Ivoire border placed a moratorium on drilling of new wells in the disputed area, but enabled work to continue on ongoing wells; supporting expectations that TEN will start production on schedule in Q4 2016. A final ruling is expected in 2017 As at end Sept 2015, the TEN project was 74% complete Conclusion of key agreements to facilitate the coming on-stream of Sankofa Gye Nyame with project development activities in 2015 ■ c.US$700mn World Bank guarantee facilitating c.US$7.9bn private investments GNPC commissioned phase-1 of the Western Corridor Gas Infrastructure Project in 2015 During 2015, 15,789 MMscf of raw gas was processed at the Atuabo Gas Plant and transported to the VRA for electricity generation at Aboadze Power Plant Area Phase 1 Source: Ministry of Petroleum, Ministry of Power | GNPC - Ghana National Petroleum Corporation, GNGC- Ghana National Gas Corporation, VRA- Volta River Authority, Grid Co- Grid Company of Ghana, ECG- Electricity Distribution Company 32 |#33Gas-to-Power and Value-Added Hydrocarbon Exports Boosts Ghana's Long-Term Prospects Despite a muted global backdrop, Ghana's energy and power sectors are expected to make continued progress and attract investments A forward looking approach to the power industry puts in motion initiatives that will see Ghana become an efficient producer over the next decade In the long term, oil production will peak at 236,290 bopd ■ Associated gas production is expected to average 323.7mm scf/d in the long term ☐ Ghana expects to become a net exporter of electrical power, crude oil and petrochemicals in the medium-to-long term This export-led strategy will act as a positive catalyst to Ghana's economic prospects in coming years. Robust long term hydrocarbon production profile a positive boost to Ghana's economic prospects BBLS/DAY Crude Oil Long Term Production Profile 250 200 150 100 Gas Long Term Production Profile 400 300 MM scf/d 200 100 50 0 0 2018f 2019f 2020f 2021f 2022f 2023f 2024f 2025 ■ Jubilee ■TEN ■SGN (Oil+ Cond) 2018f 2019f 2020f 2021f 2022f 2023f 2024f 2025f ■ Jubilee ■TEN AG ■TEN NAG ■SGN Source: GNPC Clear and effective energy and power strategy that encompasses both domestic consumption and value-added exports Upstream Jubillee, TEN & Sankofa Fields FPSOS Nkrumah (2010/11) FPSO Mills (2016/17) Unnamed FPSO (2017/18) Midstream Downstream Industrialisation-to-Power Output -> Exports Distribution Generation Petro-chemicals Agriculture industry inputs 33#34Continued Development Partner Support The IMF Programme extending into 2017 provides some level of certainty to Ghana's commitment to reforms and encourages disbursements from development partners IMF • 2015: $918m 3-yr ECF IMF funding and policy support opens-up donor and grant access to Ghana again RNATION ONETARY NFUND World Bank • 2014: >US$200m credit 2015: • THE WORLD BANK • IBRD-IDA European Union EU . $150m credit $400m guarantee supports external borrowing; US$700m Sankofa Gas guarantees 2015: US$181m donor budget support AfDB 2015: US$ 50m donor budget support United States 2014: US$498.2m compact support for Ghana's power sector China 2011: US$3b infrastructure development facility "The donor support has been unlocked since the approval of the Fund's program..... Additional disbursements from bilateral donors during the remainder of the year will bring total program financing to close to US$ 500 million, as expected" IMF Country Report, September 2015 ✓ Ghana strategically positions its foreign relations policy to enhance economic growth and stability The country enjoys immense goodwill globally and in the West Africa region Multilateral and bilateral donors stand ready to continue supporting Ghana beyond 2015- following 2013 reforms Global Support Enhances Pace of Ghana's Turnaround Coordinated Policy & Funding Interventions: The Multi-Donor Budget Support (MDBS) process, is one by which Ghana and its Development Partners agree funding tied to a pre-agreed set of objectives, reforms and indicators Foreign Direct Investments (FDI) Encouraged: • Impressive and consistent FDI flows supported by multilateral involvement in Ghana ⚫ FDI flows stabilizes Ghana's volatile foreign reserves and by extension its currency FDI creates jobs and revenue generating projects, strengthening Ghana's fiscal position ⚫ • FDI funded projects reduce Ghana's dependence on imports, improving trade balance Source: Ghana MOF, IMF, World Bank 34 I I#35Ghana's Credit Highlights Firm Commitment to Fiscal Consolidation Resilient and Inclusive Economic Growth Sound Debt Management Strategy Yielding Results Broadbased Multilateral & Development Partner Support Encouraging Investments FREEDOM AND JUSTICE An Emerging Energy Powerhouse with Bright Economic Prospects High Institutional Strengths and Well-Established Democratic Culture 35#36FREEDOM JUSTICE A H A 17 Thank You