We Are On Course To Exit IMF Programme By End Of 2018 — Ken Ofori-Atta

The Minister of Finance Ken Ofori-Atta presented the 2019 Budget statement to Parliament.7 min

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The Minister of Finance Ken Ofori-Atta presented the 2019 Budget statement to Parliament.

Excerpts of the 2019 Budget statement dubbed "A Stronger Economy, for Jobs and Prosperity" read:

Right Honourable Speaker, Honourable Members of Parliament, today the fifteenth day of November 2018, on the authority of the President of the Republic of Ghana, His Excellency Nana Addo Dankwa Akufo-Addo, I beg to move that this august House approves the Financial Policy of the Government of the Republic of Ghana for the year ending 31st December 2019.

Mr. Speaker, on the authority of His Excellency the President, and in keeping with the requirement under Article 179 of the 1992 Constitution of the Republic of Ghana, may I respectfully present the Budget Statement and Economic Policies of Government for 2019 to this Honourable House.

Mr. Speaker, this statement is an abridged version of the 2019 Budget Statement. I would like to request the Hansard Department to capture the entire Budget Statement and Economic Policy.
I also submit before this august House, the 2018 Annual Report on the Petroleum Funds, in accordance with Section 48 of the Petroleum Revenue Management Act, 2011 (Act 815), as amended.

Mr. Speaker, the theme of this year’s budget is “A Stronger Economy, for Jobs and Prosperity”. The budget represents the third of four budget statements of the government. It, therefore, offers us an opportunity to take a mid-term review of the performance of the Government in managing the economy and how we intend to accelerate the programme of growing the economy, protecting the vulnerable, and creating jobs and prosperity for the Ghanaian people over the next financial year. 

I do not take lightly the significance of this moment and opportunity we are granted annually to determine how the precious assets of Ghana – our people, our land, our natural resources, and our treasury should be stewarded for national growth and human development.

Despite the challenges, we approach this process with genuine humility and gratitude to a great God. We recognize that while current resources are insufficient to meet every need and every demand of every Ghanaian, there are no limitations on our collective potential, our will and our hope that the sacrifices we make and the seeds we sow today will achieve sustainable results putting Ghana on an irreversible path of enviable empowerment.

With all the humility I can muster, Mr. Speaker, permit me to say that I am proud to say that the Akufo-Addo government is delivering on this four-year resounding mandate that the people of Ghana has given us. This is evident in the impressive strides the nation has made in the past 22 months.

Mr. Speaker, on behalf of the President, I wish to thank you all, the citizens of this country, for your patience, perseverance, sacrifices, activism, and partnership that you have extended to this government. 

So far-reaching and non-partisan has these national sacrifices been, that even now, some members of the Minority in Parliament have decided to lead the campaign for a cleaner environment by dumping their gas-guzzling Toyota Land cruisers to ride bicycles to work.  For example, a former Deputy Minister for Power, during the unforgiving ‘Dumsor’ era under President John Dramani Mahama, was seen two evenings ago riding his bicycle to a luxury furniture shop on the Spintex Road.

Yes, Mr. Speaker, we have, in the last two budget years, taken some tough decisions to get the country out of some very rough seas. We are not proud of the fact that there is still hardship in the country. But we are comforted by the fact that we have managed to ease the impact of the hardships that the Ghanaian people had been resigned to prior to December 7, 2016. We are not there yet. We still have a long way to go in fulfilling the manifest destiny of this blessed land. Indeed, we are being repaid for “the years the locusts have eaten”.

So, Mr. Speaker, what is, however, clear is that the nation is moving forward under this government and moving forward in the right direction.

We are now on course to exit the IMF programme by the end of this year. It has been a collective effort by all of us–– Government, for exercising the kind of macro-economic competence and discipline that was evidently lacking in the past; and, the people for their patience, understanding, and keeping faith with their government. 

The programme may have had its critics because of the constraints it imposed. But it was a necessary pill because by 2014, the government then had lost its fiscal discipline and had very little choice but to seek the bailout. We are grateful to the IMF and are determined to maintain a combination of economic discipline and vibrancy that will ensure that we will not have to be rescued in that manner in the future.

Mr. Speaker, the philosophy of this government has not been to throw our hands in the air and offer excuses. The President, of course, set the standard in his first State of the Nation address. He said: “I was not elected by the overwhelming majority of the Ghanaian people to complain. I was elected to get things done. I was elected to fix what is broken and my government and I are determined to do just that.”  

Mr. Speaker, it is important to remember what it was in order to appreciate the work that has been done to fix the mess:

●Declining economic growth that fell from 14 percent 2011 to 3.7 percent in 2016;
●Declining growth in agriculture and negative growth in industry;
●Rising unemployment that resulted in the formation of the Unemployed Graduates Association;
●High Fiscal Deficits reaching 9.3 percent of GDP in 2016;
●Fast rising Public Debts which pushed the debt-to-GDP ratio to 73.1 percent at the end of 2016;
●Fast-falling Cedi, affecting even the meagre profits that street hawkers struggle to make;
●High interest rates killing businesses;
●Effective return to “Cash and Carry” under NHIS as a result of Government arrears
●Weak Banking System and unstable financial system;
●And, lest we forget, Mr. Speaker, Ghanaian businesses, big and small, were working only to pay electricity bills or to buy diesel for the generator. We cannot forget so soon the havoc that five years of ‘Dumsor’ caused to households, businesses and all, up and down the country.

These are just some items on the long list of things that were broken and needed to be fixed. Mr. Speaker, within two years of the change in government, below are just some of the problems we have fixed:
●a change in the management of the economy;
●a change from macroeconomic instability to macroeconomic stability;
●a change from a rising debt-to-GDP ratio to a declining
debt-to-GDP ratio; changing from a weak banking system to a strong, well-capitalised and better supervised banking system;
●a change from taxation that undermines production;
●a change from a predominance of sole sourcing to competitive tendering in procurement; this changed has seen the Public Procurement Authority making total savings of GH¢1.8 billion from January 2017 to October 2018. It is important to recognized that not a single pesewa was saved all the years under the previous government until 2017.
●a change from the manual process of clearing goods, with its attendant corruption at the ports to a paperless process;
●a change to bring about a reduction in electricity tariff;
●a change from Dumsor to reliable power; a change in the access to and cost of education, to introduce free Senior High School education;
●a change from the abolition of teacher training allowances to a restoration of teacher training allowances;
●a change from Cash and Carry in NHIS to a functioning national health insurance system where arrears have been cleared;
●a change from the abolition of nursing training allowances to a restoration of nursing training allowances;
●a change to increase the share of the DACF to persons with disabilities from 2 percent to 3 percent;
●a change in a moribund private sector to a vibrant job-creating private sector;
●a change from rising graduate unemployment to reducing graduate unemployment through programmes such as the 100,000 strong NABCO corps; a change from a dying colonial railway network system, that had been to a re-energised railway sector;
●a change from a stagnant agricultural sector to a revitalised agricultural sector under the Planting for Food and Jobs programme;
●a change from destructive galamsey activities to a regulated small-scale mining activities;
●a change from the opaque allocation of Ghana’s oil blocks to non-performing cronies to a transparent allocation of oil blocks to investors with the capacity to work the fields.  

Mr. Speaker, His Excellency responded and promised:  
●an innovative change to bring jobs and income to every district through One District One Factory;
●an innovative change to bring development to our rural areas through One Village One Dam under IPEP;
●an innovative change to Mobile Payment Interoperability; an innovative change to three Development Authorities to be a vehicle for accelerated development and the allocation of capital expenditure;
●an innovative change to the establishment of the Zongo Development Fund as a vehicle to focus on the developmental needs of Zongo communities; and
●an innovative change to the approach of entrepreneurship development through the establishment of the National Entrepreneurship and Innovation Programme (NEIP).

A major focus of the Government in the last 22 months has been to clean the economic mess we inherited with the restoration and sustainability of macroeconomic stability as the anchor for
economic growth. Fiscal policy has been underpinned by increased revenue mobilisation, fiscal consolidation, and expenditure prioritisation, as well as moving Government policy from a focus on taxation to a focus on production. In this regard,

Government has implemented the following policies and measures:

●Abolished excise duty on petroleum;
●Reduced special petroleum tax rate from 17.5 percent to 15.0 percent and further reduced to 13 percent, converted from ad valorem to specific tax. In fact, it is important to note that petroleum taxes as a percentage of the total price build up for petroleum prices has reduced from 40.0 percent in March 2017 to 26.0 percent today;
●We abolished levies imposed on ‘kayayei’ by local authorities;
●Abolished the 1 percent Special Import Levy;
●Abolished the 17.5 percent VAT/NHIL on domestic airline tickets;
●Abolished the 17.5 percent VAT/NHIL on financial services;
●Abolished the 17.5 percent VAT/NHIL on selected imported medicines, that are not produced locally;
●Abolished the 5.0 percent VAT/NHIL on Real Estate sales;
●Abolished import duty on the importation of spare parts;
●Reduced National Electrification Scheme Levy from 5.0 percent to 2.0 percent and
●Reduced Public Lighting Levy from 5.0 percent to 3.0 percent.

After 22 months of disciplined economic management, the results have been quite remarkable:
●Economic growth increased from 3.7 percent in 2016 to 8.5 percent in 2017;
●Agriculture growth increased from 3.0 percent in 2016 to 8.4 percent in 2017;
●Industry growth rose from negative 0.5 percent in 2016 to 16.7 percent in 2017;
●Services Sector grew at 4.3 percent in 2017 compared to 5.7 percent in 2016;
●The fiscal deficit was reduced from 9.3 percent of GDP in 2016 to 5.9 percent of GDP in 2017 (the first time since 2006 that a government has met the deficit target), it is at 2.8 percent of GDP in June 2018 within the target of 4.5 percent of GDP in December 2018;
●Inflation declined from 15.4 percent in 2016 to 11.8 percent in 2017 and now stands in single digits at 9.8 percent (September);
●The Bank of Ghana Monetary Policy Rate saw a year-on-year reduction from 25.5 percent by end-2016 to 20 percent by end2017 and currently stands at 17 percent. This is the longest 18 month reduction in the monetary policy rate since 2001;
●Interest rates on the 91-day treasury bills declined from 16.8 and now stands at 13.4 percent;
●Ghana’s trade position with the rest of the world has strengthened. The trade account recorded a deficit of US$1.4 billion in June 2016, improved significantly to a surplus for the first time in two decades to US$1.1 billion as at June 2017 and another surplus of US$1.1 billion as at June 2018;
●Our gross international reserves increased from $6.2 billion in December 2016 (3.5 months of imports) to US$7.3 billion as at June 2018 (3.9 months of imports);
●Ghana’s debt to GDP ratio which increased from 32 percent in 2008 to 73.1 percent in 2016 declined for the first time since 2007 from 73.1 percent of GDP in 2016 to 67.3 percent in June 2018; and
●For the first time in almost a decade, Standard and Poor’s (S&P) upgraded Ghana’s Sovereign Credit rating from B negative to B with a stable outlook, in September 2018.

Posted by Ministry of Information - Ghana on Thursday, November 15, 2018

Posted by Ministry of Information - Ghana on Thursday, November 15, 2018

Posted by Ministry of Information - Ghana on Thursday, November 15, 2018

Posted by Ministry of Information - Ghana on Thursday, November 15, 2018

Posted by Ministry of Information - Ghana on Thursday, November 15, 2018

Posted by Ministry of Information - Ghana on Thursday, November 15, 2018

Posted by Ministry of Information - Ghana on Thursday, November 15, 2018

Posted by Ministry of Information - Ghana on Thursday, November 15, 2018

Posted by Ministry of Information - Ghana on Thursday, November 15, 2018

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