CHAPTER 3 domestic product (GDP); ? Restructuring the financing of fiscal deficits to reduce their inflationary impact; and ? Improving monetary management. 4. As is evident from these policy objectives, the ERP placed some emphasis on the need for stabilising the macroeconomic situation. 5. By 1990-1991, Ghana had achieved some success in attaining macroeconomic stability and recovery in economic growth. Its GDP growth rate had reached 4.3%, compared with the negative growth rates of 1980-1983. Inflation had declined to 18% in 1991, compared with an average of 78% between 1980 and 1983. Moreover, the foreign exchange market had been unified and liberalised. Export diversification and fiscal management were, however, less successful. 6. After the 1996 parliamentary elections, little progress was made with the economic reform agenda and the economy drifted into yet another crisis. By 1997, the authorities had come to recognise the need for renewed commitment to addressing the sources of macroeconomic instability. Ghana then entered into an Enhanced Structural Adjustment Facility with the IMF. The objective was to create an environment that would eliminate fiscal instability, encourage investment and growth, increase the efficiency of the financial sector, address social issues and encourage the development of the private sector. Poverty reduction, via enhanced economic growth and directed policies, became the major motivation in policy-making. In 1999, real economic wellbeing was compromised by a large drop in world cocoa prices, relaxation in fiscal discipline and a weak monetary stance. This situation, among other things, led to a sharp rise in domestic prices and a depreciation of the cedi. Election-induced spending in 2000 only served to aggravate inflationary pressures. 7. In January 2001, the President expressed his determination to rein in the forces behind macroeconomic instability. Policies would be introduced to enable the country “to attain the important milestone of US$ 1000 per capita income in the shortest possible time”. The government aimed at alleviating its debt burden and strengthening public expenditure management and control. In March 2001, it announced its decision to join the Enhanced Heavily Indebted Poor Countries (HIPC) Initiative. Ghana reached the Decision Point in February 2002 and the Completion Point in July 2004. In addition, monetary accommodation of the budget deficit had diminished since 2001. 48