Finance Minister presents mid-year
fiscal report
14 – 11 – 2002: - Parliamentarians discuss mid-year Budget review
13 – 11 –
2002: - We’ve made progress
Accra (Greater Accra) 14 November
2002 - Members of Parliament on Wednesday expressed varied sentiments and
comments with regard to the review of the Mid-Year performance of the economy
on the basis of the budget statement and economic policy of the Government
issued by the Finance Minister, Yaw Osafo-Maafo on Tuesday.
While the majority of the Minority
members expressed dissatisfaction with the contents of the statements and
describing it as hollow and not relating to the demands of the people, the
Majority side hailed it and commended the Ministry of Finance for an
appropriate statement.
Edward Salia, NDC-Jirapa called on
the Government to take a closer look at the economic environment and do less
talk to come out with pragmatic solutions instead of engaging in the
theoretical.
Paul Collins Appiah-Ofori, NPP-
Asikuma/Odoben/Brakwa said it seemed the Ministry of Finance had taken
cognisance of the figures it presented and mentioned that control expenditure
expenditures and financial regulations need to be critically examined. He said
the Customs, Excise and Preventive Service could do more than they were doing
and said the Government should rather be commended for ensuring the growth of
the cedi.
Alhaji Amadu Ali, NDC-Atebubu South
said worse economic situations are happening now as compared to two years ago
and mentioned the high cost of electricity, water and health as well as
educational fees. He said if the Government was saying that inflation was going
down it must be reflected in the people's pockets, impact positively on the
peoples' lifestyles through pragmatic approaches.
Alex Kwaku Korankye, NPP-Asante-Akim
South commended government for giving farmers guaranteed prices for the cocoa
saying the gesture has ensured that it has kept faith with the farmers. He said
about 9000 scholarships have been awarded to wards of farmers and said the
farmers have been very appreciative, adding that the statement was appropriate.
John Mahama, NDC- Bole described the
disposition of the Finance Minister at the presentation of the statement as
very sober, which he said, was a reflection of the minister's realisation of
the economic situation of the country. He said the Government was fortunate to
have inflow of external resources as well as remittances just after the
elections, which enabled them to cope up with the economic situation but it was
now time to face the realities of managing an economy of a third world country.
Mahama said even the attitude of
"positive change" has not changed the domestic and external
borrowing, which is a worrying signal that must be addressed, while statutory payments
such as the District Assemblies Common Fund and the GETFund were still in
arrears. He said the Government was not following the benchmark it set itself,
adding that issues of economy do not only relate to the survival of the people
but are of interest to both sides of the House who must constantly be
consulted.
Gabriel Yaw Amoah, NPP- Bosome-Freho
said the control of the capsid and black pod diseases through the mass cocoa
spraying exercise by the Government was commendable but regretted that the exercise
was not undertaken in his area.
Mumuni Abudu Seidu, NDC- Wa Central
described the statement as very technical that only a few people could
understand and called for concerted effort to find suitable solutions to the
country's 'fragile' economy. He said workers are forced to depend on living
wages, whilst unemployment was on the increase even after the supposed
registration of the unemployed.
Albert Kwaku Obbin, NPP-
Prestea/Huni Valley said even though the interest rate has fallen it was not
favourable to the agricultural sector and called for credit control measures to
cushion the industry.
Amos Larweh Buertey, NDC- Ada said
comparatively, the Ghanaian was worse off than he was two year ago coupled with
the increase in utility and other fees. He said it was time the budget
statement was related to the situation of the people instead of playing
politics with their lives, adding that the plight of the people should be
concern of the government and not figures.
Mrs Angelina Baiden-Ammisah,
NPP-Shama said the HIPC initiative was started by the previous government and
being implemented now and it has so far yielded dividends for the
socio-economic development of the country.
Modestus Ahiable, NDC_ Ketu North
said all the various Funds aimed at poverty alleviation of the country were
politicised, not transparent and are of no benefit to the people who should
benefit.
Isaac Kobina Nyame Ofori, NDC-Sefwi
Wiawso said the price variations of cocoa between Ghana and her neighbours and
the bad road network were contributory factors to the increase in smuggling,
especially in the Western Region. He said following what the Minister stated in
his budget statement it meant the country must prepare itself for an increase
in fuel prices and asked the Minister to explain the current situation at the
Tema Oil Refinery (TOR).
Yaw Osafo-Maafo, in summing up the
comments said the country has not kept faith with the payment of the percentage
for the District Assemblies Common Fund and called for a policy on how to apply
the fund.
On the International Financial
Consortium (IFC) loan, he said it required a full statement, adding that a
sovereign statement has still not been signed for its disbursement. Osafo-Maafo
said a forensic audit is taking place at TOR to check the mismanagement.
GRi…/
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The challenges include the higher-than-expected salaries, especially for
doctors and teachers, payment of arrears to road contractors, social security,
subsidy on utility tariffs, short fall in foreign inflows, low divestiture
receipts and external shocks from high crude oil prices.
According to him, these notwithstanding, the government have been able
to maintain macro-economic stability through prudent and appropriate fiscal and
monetary policies at a great political cost.
Mr Osafo-Maafo, in a 35-minute review of economic performance based on this
year’s budget statement to Parliament, said within the period the domestic
expenditure went slightly above the target set by 0.6 per cent of the GDP.
However, domestic revenue generation exceeded the programme targets by 1.3 per
cent just as provisional overall cash deficit was 1.2 per cent below target.
The minister indicated that because of the substantial shortfall in foreign
inflows, the government was compelled to borrow more (2.4 per cent of GDP) from
domestic sources than anticipated.
He submitted that in order to contain the adverse effect of excessive domestic
financing, the central bank will intensify its open market operation to ensure
that macro-economic stability stays on course.
On inflation, Mr Osafo-Maafo said the end of year target was 13 per cent
but at the end of September, the rate stood at 12.9 per cent.
Between January and June this year, the cedi depreciated against the pound by
10.8 per cent and the Euro by 17 per cent. “Any assessment of the foreign
exchange market performance will take into account the high appreciation,” he
said.
He assured the House that his ministry attaches great importance to public
finance management because it is critical to overall economic governance. Mr
Osafo-Maafo indicated that efforts are being made to get the second phase of
the Public Financial Management programme (PUFMARP) started.
He recounted some steps that have been taken to enhance resource mobilisation
for the government and said the steps include the setting up of a non-tax
revenue unit to facilitate the collection, accounting, reporting and monitoring
of internally generated funds.
Other moves have been made to ensure sound expenditure management while the
Budget and Public Expenditure Management Systems (BPEMS) will be implemented
early next year.
Mr Osafo-Maafo noted that the Financial Administration Decree and the Financial
Administration Regulation are all being examined by Cabinet.
Another critical area is procurement, and the Procurement Bill has been
finalised by the economic management team for the approval of Cabinet.
On oil price shock, the minister said the inability of the government to
adjust the prices of petroleum products in a timely manner to the world market
conditions poses great risk.
The situation has led to an accumulation of financial losses to the Tema Oil
Refinery and the government will have to redress the problem because it now
subsidises users of private and commercial vehicles by ¢25 billion a month and
the situation is not sustainable.
He also gave the assurance that the negative effects of the recent increases in
utility tariffs and the further adjustment next March will be eliminated
shortly.
Mr Osafo-Maafo said the Bank of Ghana will continue to deepen the gains made in
the foreign exchange market. As of the end of last month, an amount of ¢400
billion had been credited to the Heavily Indebted Poor Countries (HIPC)
initiative account.
On divestiture, the minister said the delays in the implementation of
government’s fast-track programme resulted in a shortfall of ¢220.3 billion. He
explained that the delays were, however necessary to ensure transparency and
also maximise receipts.
On cocoa, the minister said a special equalising account has been set up
into which windfalls from price increases will be paid to enable bonuses to be
paid to farmers. The first one is expected to be paid next month. Meanwhile, an
amount of ¢ 240 billion has been set aside for the control of capsid and
balckpod diseases.
Furthermore ¢10 billion has been earmarked for scholarships for children of
cocoa farmers. Mr Osafo-Maafo assured his colleague members of Parliament that
the government is committed to sharing information with the legislature.
He explained that the NPP administration believes that it is only through such
channels of communication that the economic affairs of the country could be
steered to attain commanding heights.
Mr Osafo-Maafo said his office has benefited from suggestions, comments and
criticisms from MPs. He conceded that there is more work to be done so it is
important that MPs co-operate to build a prosperous nation. – Daily
Graphic
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