By cutting expenditure, we have assisted Bank of Ghana to tame inflation - Finance Minister

The Mahama administration has taken a number of measures to cut expenditure, the Finance Minister, Dr Cassiel Ato Forson, has said.

Dr Forson stated that by cutting expenditure, the government has assisted the Bank of Ghana to bring inflation under control.

He said this while speaking during the Ghana-UK Investment Summit in London on Monday, June 1.

"In the last ten years, public debts have been increasing on account of not only government expenditure but also the stop-flow adjustment. Stop-flow adjustment, simply put, is state-owned enterprises transferring their debt to the central government 2.5 per cent of GDP, in fact   and so we introduced the commitment authorisation, that yes, you can be a state-owned enterprise, but we need to approve the kind of expenditure or commitment.

"Overall, what we have seen is that by cutting expenditure, we have actually assisted the central bank in controlling inflation."

He further stated that the creation of the GoldBod has contributed to building healthy reserves at the central bank.

"Secondly, we needed to ensure we capture our gold to control the gold export, and so we introduced what we call the GoldBod. The GoldBod was to ensure that gold that was hitherto leaving the country through smuggling  and from which the country was not benefiting in the value chain   is actually stopped.

"And so what we did was the introduction of GoldBod alone; in one calendar year, we were able to buy gold worth US$14 billion, and that US$14 billion assisted the central bank to build reserves.

"Today, the central bank has a very healthy reserve position, and this year we expect to buy gold worth at least US$20 billion. We also introduced the sliding scale so that we can capture the economic rent coming from the gold," Dr Forson said.