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Ghana's economy set for major
take-off
By Masahudu Ankiilu Kunateh, Ghanadot
Accra, Jan 5, Ghanadot -
The Minister of Finance and Economic Planning, Dr Kwabena
Duffour, has given a brighter outlook of the country’s
economy for 2010 and declared that with the stabilisation of
the economy, the government is now set to transform the
rural economy.
Sharing his perspectives on the economy with some
journalists in Accra, Dr Duffuor explained that substantial
investments in agriculture, as well as the development,
improvement and maintenance of infrastructure, would be the
driving force behind the transformation of the rural
economy.
“The Government’s priority is to promote sustained economic
growth through empowering and transforming the rural
economy. The government will, thus, in this year, undertake
substantial investments in agriculture, infrastructure,
maintenance, improvement and development in accordance with
our strategic plans and other strategies,” he stated.
He said empowering and transforming the rural economy would
not only ensure a sustained growth, but it would also help a
balanced growth in the economy to enable the private sector
to take advantage to invest in any part of the country. Dr
Duffour said the government was committed to supporting the
private sector as a key partner in contributing to the
development aspirations of the country by creating jobs,
higher incomes and improving the standard of living of the
people.
He, therefore, called on the sector to invest in the economy
on the back of the significant stabilisation successes
chalked up in spite of the global economic meltdown so as to
help build a better Ghana. “Potential investors should take
advantage of the dramatic changes in the macroeconomic
conditions and the successes chalked up in the Ghanaian
economy to invest in the country to help build a better
Ghana,” Dr Duffour stated. The 2010 budget clearly has
provision for supporting a wide range of agricultural
activities, including the Youth in Agriculture (YIA) policy
that is a cardinal employment-creating vehicle.
The Savannah Accelerated Development Authority (SADA) would
also take off this year to be coupled with some private
initiatives such as the $25 million Alliance for Green
Africa (AGRA), an agricultural support initiative of the
Standard Bank, the parent company of Stanbic Bank, Ghana.
The Finance and Economic Planning Minister said the
government was upbeat about the future prospects of the
country and that priorities would be met, saying the
government had demonstrated its commitment to solving the
problems confronting the country by instituting prudent
economic measures that stabilised the economy in the last 12
months in the light of the global crisis.
Dr Duffour said the past year had seen the government make
difficult decisions aimed at laying a solid foundation for
economic take-off in 2010 amidst an opportunity to further
worsen the situation, adding that the wide range of
comprehensive and well-sequenced reforms enabled the
achievement of resounding results in 2009. He said some of
the achievements included the lowering of inflation from the
high of 20.6 per cent in April, 2009 to 16.97 per cent in
November, 2009 and said the “challenge is to anchor
inflation at this pace through the end of the year and
beyond.”
The exchange rate also stabilised leading to the cedi
appreciating against the dollar of the latter part of the
year. The cedi, which traded at GH¢1.22 to a dollar in
December 2008, depreciated sharply to GH¢1.49 to the dollar
by the end of July 2009.
However, the measures put in place helped to arrest the
situation, giving way to the cedi to appropriate in
magnitudes unprecedented in the country’s history. By the
end of July, the cedis traded at an average of GH¢1.49 to
$1.00; GH¢1.45 to $1.00 in August and GH¢1.45 and GH¢1.44 to
$1.00 in September and October respectively.
Consequently, the government would continue to implement
appropriate monetary and fiscal policies and maintain a
relatively stable exchange rate so as to spur production
levels in the economy as a measure to make the economy
remain stable and robust.
“Indeed, a reduction in the pace of economic activity, more
prudent fiscal policy, continued monetary restraint, and
declining world oil and food prices are all expected to lead
to a fall in inflation in 2010,” Dr Duffour said, projecting
that those would lead to the attainment of a single digit
inflation by the end of 2010. He said, however, that a
sustained fiscal consolidation would require continued
overhaul of public expenditure management, improved
efficiency and cost cutting.
“Inevitably, a substantial part of the adjustment will need
to be accomplished through higher revenues. To this end, the
government will continue to broaden the tax base and improve
tax administration,” Dr Duffour stated. In the medium term,
the minister said, the government would invest in removing
constraints on the transport, communications energy sectors
and therefore pave the way for broad-based poverty
reduction.
During 2010, the government would also engage Vodafone and
seek to put obligations on their use of the Ghana Telecom
national fibre-optic backbone “in an attempt to strike
advantageous deals for Ghana.” That is because information
and communications technology (ICT) is an integral part of
any poverty-alleviating tool under the country’s development
agenda, the Growth and Poverty Reduction Strategy II, which
means that the national fibre-optic asset should be in the
hands of Ghanaians.
The government would also secure greater involvement in the
country’s oil field through its agent, the Ghana National
petroleum Corporation (GNPC). Dr Duffuor also expressed the
hope that investor confidence would be boosted in the
economy this year as structural reforms would improve their
competitiveness, which would translate into an overall
economic outturn for 2010. The Finance and Economic Planning
Minister reiterated his belief that the government would do
away with deficits by 2012 and replace them with growing
surplus, especially as the third-quarter would witness the
production of crude oil in commercial quantities.
Currently, partners in the Jubilee Oil field, including
Kosmos, Tullow and GNPC, are building the Floating
Production, Storage and Offloading vessel, which would be
used to produce oil in the last quarter of the year.
Ghanadot
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