The Minister of Finance, Mr Seth Emmanuel Terkper, has asked Ghanaians
to focus on the positive developments ongoing in the country, instead of
harping on the challenges.
He said without the acknowledgement of positive developments concerning
the Ghanaian economy, the perception and confidence out there would
continue to be gloomy, lamenting that in spite of the many positive
developments happening in the country, there was still a negative view
of the performance of the economy, both externally and internally.
Mr Terkper, who was the guest speaker at a breakfast meeting jointly
organised by Graphic Business and the Fidelity Bank on the Ghanaian
economy yesterday, said, “It is not just the narrative at home which is
not recognising some of the changes that are occurring, but we have to
begin to acknowledge that there is some change.”
The meeting was on the theme: “The Economy and Prospects for Business Confidence”, and was attended by captains of industry.
Mr Terkper listed some of the positives as the ability of the
government to stay within fiscal targets which produced a very
encouraging outcome in the first quarter of the year.
Total revenue was also 11 per cent above the target in the first
quarter of 2015, while expenditure came in five per cent less than
projected. Moreover, spending on wages and salaries were contained,
although capital spending rose well above initial projections.
He also said in only two weeks Ghana had received a clean bill of
health from the International Monetary Fund (IMF) in its first review of
the Ghanaian economy, enjoyed the disbursement of grants by the
European Union (EU) and other development partners, stood to benefit
from a policy-based guarantee from the World Bank that would enable the
extension of the tenure of Ghana’s loans beyond 10 years and a guarantee
for the Sankofa gas field that is set to be approved.
He explained that while Ghana was not alone in the challenges
experienced by its economy, the challenges were due to external shocks
such as the decline in commodity prices such as gold, cocoa and crude
oil in 2012, coupled with the fact that oil production had reduced from
90,000 to 73,000 barrels daily.
That resulted in a huge gap in revenue, in addition to the lack of grants, he added.
“When we look at the economy, we should not look at it only on account
of non-performance of Ghanaian managers, including politicians. We
should look at it in the context of major shocks that we went through in
the last two years when we launched the recovery,” he said.
Internally, he said, Ghana was experiencing a shortfall in energy
supply because demand had outstripped supply from 2012 to 2013, although
access had increased to 72 per cent, adding that Ghana was only second
to South Africa in access to electricity in sub-Saharan Africa.
According to Mr Terkper, in the past such shocks would have crippled
the economy, “but these difficulties which in the past would have taken
us to negative growth have kept us above positive growth”.
He also stated that dismal growth figures such as 3.5 and four per cent
would not be the same now since the base of the GDP had increased.
“Since 1985 when the Structural Adjustment Programme (SAP) was
consolidated, Ghana has never had negative growth, in spite of
everything,” he said.
Mr Terkper continued that when Ghana adopted the home-grown policies to
withstand the external shocks, it was able to migrate all public
servants onto a uniform salary scale through the Single Spine Salary
Structure (SSSS).
He, however, asked that care must be exercised in wage negotiations for
civil servants, “else they take so much of the public purse and we have
less money for other things or we borrow excessively for those other
things, which is not the way forward for a nation like Ghana”.
Touching on the ongoing dialogue on salaries, he cautioned that the
Civil Service must not be dismembered and that “if we don’t hold the
various fiscals together, these services will tear the budget apart
again”.
He said GH?3 billion had been paid out of GH?18 billion from the Ghana
Revenue Authority (GRA) in single spine arrears alone, with an
additional GH?8 billion in budget overruns attributed to compensation.
At the end of 2014, most arrears and overruns that the government
hitherto had not been able to pay were all cleared through the
home-grown policy, he noted.
Moving to the servicing of loans, Mr Terkper said the perception that
all loans that were being serviced currently were contracted by the
current government was wrong, since some were contracted by previous
governments and stretched for many years.
He stated that it was not all loans that were part of the public debt,
except those for schools, hospitals and clinics, lamenting that even
though the bills paid by patients could be used to maintain the
facilities, many of the institutions that had huge internally generated
funds still went back to the government for financing.
He stated that 30 per cent of the debts was used to support commercial
projects such as water, power systems, roads, among others, “for which
those institutions should have borrowed on their own balance sheets”.
Source:Ghanaweb.com
