On November 5, 2015, the Institute for Fiscal Studies (IFS) and Natural Resource Governance Institute (NRGI) organized a Budget Forum to discuss the economic challenges and risks confronting the country and the issues that needed to be addressed in the 2016 Budget. The Forum identified that, in the last three years, the government has not succeeded in improving the fortunes of the country despite setting ambitious targets every year. And despite the 2015 Budget Statement having a transformational agenda as its main theme, there is no evidence that the economy is being transformed. Real GDP growth has decelerated and, indeed, the projected real GDP growth of 4.1 percent this year will be the second lowest since 2000, driven by declines in the growth rate of all the key sectors of the economy. Growth of the agriculture sector has been decelerating, manufacturing activities have collapsed, having experienced three continuous years of decline, while mining and quarrying will contract this year, the first time in decades.
The macroeconomicenvironment continues to be unstable. Inflation is on the rise, the cedi continues to depreciate, and interest rates still remain stubbornly high. The economy remains highly vulnerable to external shocks in the form of sustained currency depreciation, volatility in commodity prices, sudden stops in portfolio inflows into the domestic capital market for government securities, low levels of foreign currency reserves, and large share of foreign-currency denominated public sector debt. The public debt stock situation has worsened and the country now faces a high risk of debt distress and increased overall debt vulnerability. The country continues to face huge backlogs in critical infrastructure, especially transport infrastructure and energy supply.
Corruption in the public sector is not only perceived to be on the increase but institutionalized.