Investor Presentaiton

Containing 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

View entire presentation