Economy not in crisis despite challenges — Terkper
The Finance Minister, Mr Seth Terkper, has assured the country that despite the current temporary economic challenges, the government remains relentless and resolute in building a better Ghana for all.
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The medium-term prospects for the country, he said, were bright, adding that measures instituted by the government were far-reaching and transformational in nature.
“This is not an economy in crisis,” he said, and explained that an economy that grew at about seven per cent could not be said to be in crisis.
“Our growth rate is the envy of many on the African continent,” he added.
Mr Terkper said this yesterday during the presentation of the mid-year review and supplementary estimates to Parliament to seek approval to spend an extra GH¢3.2 billion to fund additional expenditure in the revised 2014 budget.
This is in addition to the GH¢34.9 billion expenditure projected for the main 2014 budget which was presented to Parliament in November 2013.
That expenditure was 34.1 per cent of Gross Domestic Product (GDP).
Some of the measures, he said, would be painful in the short term but beneficial in the long run.
"The economy has experienced a number of pressures which continue to pose challenges to the attainment of our 2014 economic targets," he said, and cited higher interest costs and a shortfall in external inflows as factors leading to the imbalance.
Cutting growth targets
The government has cut its 2014 economic growth target and forecast and revised the budget deficit and the inflation rate due to falling revenues, the decline of the cedi and falling gold prices.
The minister said the country’s budget gap would increase to 8.8 per cent of GDP, compared with an initially targeted 8.5 per cent..
He said the government now expected economic growth of 7.1 per cent this year, down from an initial eight per cent, and a year-end inflation rate of 13 per cent, plus or minus two per cent, compared with an earlier 9.5 per cent forecast.
“Ghana's gross international reserves at the end of the year are expected to be enough to cover not less than three months of imports, up from 2.5 months in June. It has, therefore, become necessary to make adjustments to accommodate higher interest costs due to rising interest rates and exchange rate depreciation.
"We are presenting the supplementary estimates to ensure that we maintain the pursuit of our growth and macroeconomic stability agenda," Mr Terkper said.
Recommended economic measures
He said with the measures instituted, he was optimistic that the government would achieve the goal of a fully-fledged middle-income country with opportunities for all.
Towards that end, he said, “We are incorporating the key and major recommendations of the Senchi Consensus in our overall economic management agenda.”
Other measures he enumerated were the promotion of the consumption of made-in-Ghana goods the revamping of the Komenda Sugar Factory, increasing funding for poultry and rice production, as well as increased support to the pharmaceutical industry and small and medium enterprises (SMEs) in general.
The focus and determination of the government, he said, was to ensure transition into a full middle-income status supported by bold paradigm shifts such as the enactment of the Petroleum Management Revenue Act (PRMA) and proposals for the establishment of the Ghana Infrastructure Fund.
Those measures, he explained, were aimed at injecting stability, while changing the structure of the economy.
Mr Terkper said despite the major setbacks in 2013, the government was determined to see through the implementation of those measures as a major step towards the attainment of the President’s transformational agenda.