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Seven years of sustained growth in the
economy – Minister Baah-Wiredu
Accra Nov. 15, GNA – Mr Kwadwo Baah-Wiredu, Minister of
Finance and Economic Planning, on Thursday said the past
seven years had witnessed sustained growth in the economy.
This, he noted, was achieved by continually maintaining the
broad policy orientation of reducing the country's level of
poverty while providing the appropriate environment for
private business to grow and thrive.
"An analysis of the key economic indicators points to a
stable, resilient and growing economy," he said.
Mr Baah-Wiredu said this when he presented the 2008 Budget
Statement and Economic Policy to Parliament.
"All sectors of the economy have achieved varying degrees of
success and the combined effect of this effort has
culminated in a strong and thriving economy, which has been
able to withstand numerous domestic and external pressures.
"This positive state of affairs can be attributed to
Government's strict adherence to a number of measures,
including strong fiscal discipline; prudent monetary stance
and the implementation of well focused policies even during
the previous election year.
"Admittedly, some of these policies have not been
politically favourable but we have been resolute in our
conviction that we should not trade a better economy and
improved livelihood for political gains.”
Mr Baah-Wiredu said the Medium Term Strategy as spelt out in
the Growth and Poverty-Reduction Strategy (GPRS) II was to
achieve middle-income country status by 2015.
"Within this framework, Government has harnessed efforts in
all sectors towards accelerated growth and reducing poverty.
In this, the focus has been wealth creation through
developing our human resources, promoting the private sector
and ensuring good governance.”
Touching on performance in 2007, Mr Baah-Wiredu said the
economic performance as measured by growth in GDP stood at
6.3 per cent, slightly lower than the projected 6.5 per
cent.
This result, he noted, was achieved despite the major energy
challenge that the country faced.
On the resolution of the energy crisis, Mr Baah-Wiredu said
in an effort to address the energy crisis, a number of
short, medium and long-term interventions targets were
pursued.
"Significant among them is the successful negotiation of the
$622.0 million loan for the construction of the Bui dam and
Bui City,” he said, adding, "this investment is the second
largest single investment in the history of the country
after the Akosombo Dam.”
He said as part of measures to reverse the energy crisis and
to improve upon the generation, transmission and
distribution of electricity, significant expenditures had
been made since 2006 and by end-2008 government's total
budgetary expenses would have exceeded US$2 billion.
This included the purchase of crude oil and generation and
transmission equipment, he said.
"Crude oil alone would have received an allocation of about
US$1 billion for the same period."
He said given the desire of all Ghanaians for an enduring
solution to the power crisis, it was Government's belief
that all were ready and willing to pay realistic rates to
ensure a much more efficient and reliable energy supply.
On the re-denomination of the Cedi, Mr Baah-Wiredu said it
was to help to remove the significant dead weight burden
that the old cedi regime placed on the economy.
"This measure, taken in the context of strong economic
fundamentals and macroeconomic stability, has already
resulted in significant efficiency gains which are expected
to enhance the way we do business.”
The Finance Minister said the successful entry of Ghana into
the Eurobond market was another unparalleled achievement for
the year.
"The over-subscription of the bond, together with the
quality and internationality of the investors is, for us, a
clear indication of the confidence that the international
community reposes in the Ghanaian economy and the evidence
that our political direction is on the right track.
On the celebration of Ghana@50, Mr Baah-Wiredu said the
country celebrated the 50th anniversary and successfully
hosted the African Union (AU) Summit and the Africa Growth
and Opportunity Act conference in June and August, 2007,
respectively.
Touching on the new education reforms, the Finance Minister
said it sought to improve upon the educational system in
response to the needs and expectations of both individuals
and industry.
"A comprehensive package of reforms has been introduced with
the main components, including teacher upgrading and
deployment; attainment of gender parity; the active
promotion of science; technology and research; and
mainstreaming of preschools into the basic education system.
Mr Baah-Wiredu said as a demonstration of Government's
commitment to decentralisation, the District Assemblies'
Common Fund, which had been pegged at 5.0 per cent of tax
revenue since 1993 had been increased to 7.5 per cent.
In addition to this, 25 more districts have been created to
facilitate better governance and accelerate socio-economic
development at the district level.
"A draft comprehensive policy on decentralisation has been
developed, together with an intergovernmental fiscal
framework to guide the fiscal relations between Central
Government and the sub-national governments.”
On the Fair Wages and Salaries Commission, Mr Baah-Wiredu
said in fulfilment of Government's commitment to rationalize
public sector wages, the Fair Wages and Salaries Commission
Act, (Act 737) had been enacted.
"The Fair Wages and Salaries Commission, which is legally
mandated to administer a new comprehensive pay structure and
ensure equity in the
Government Payroll has been constituted.
"To pave the way for the successful implementation of the
Commission's work, Government had earlier removed
distortions and corrected placements on the Ghana Universal
Salary Structure (GUSS).
"The reform process is ongoing. The obvious challenge is to
manage labour expectations particularly in an election year.
"To this end, the necessary consultations will be undertaken
with and among stakeholders, with a view to comprehensively
and successfully dealing with the issue of wage reform once
and for all," he said.
Mr Baah-Wiredu said with the country poised for accelerated
growth, a massive infusion of capital was required to
undertake the necessary infrastructure to facilitate such
growth.
"The discovery of oil in commercial quantities could,
therefore, not have come at a more opportune time."
He said in order to ensure that the oil resources were
utilised in a judicious manner aimed at deriving the maximum
benefit for the country, measures were being taken to put in
place the appropriate legal and regulatory frameworks, as
well as fiscal rules, and to ensure the training of Ghanaian
human resources in various disciplines to 'manage this God
given resource'.
A technical team has also been constituted to undertake the
necessary analysis of the impact of the oil discovery on the
economy in the long term, he said.
Touching on the National Youth Employment, Mr Baah-Wiredu
said the overall objective of the programme was to empower
the youth to enable them to contribute more productively
towards the socio-economic and sustainable development of
the nation.
This, he noted, was in line with Government's commitment to
provide jobs for the youth as articulated in the GPRS II.
"Seven out of the 10 employment modules have been rolled out
and are being implemented across the length and breadth of
the country.
"A total of 107,114 youth have been engaged on the seven
modules as at August 2007," he said.
Mr Baah-Wiredu said in April 2007, the Ghana Statistical
Service published a book on the pattern and trends of
poverty in Ghana from 1991 - 2006, which utilized data from
the fifth round of the Ghana Living Standards Survey (GLSS).
"From the data provided, it is evident that poverty has
reduced significantly and Ghanaians are obviously better off
today than they were seven years ago.
"The indicators show a downward trend in poverty from 39.5
per cent in 1998/1999 to 28.5 per cent in 2005/2006."
He said an analysis of poverty expenditures revealed that
poverty-related expenditures increased from GH¢233.9 million
in 2002 to GH¢1,237.4 million in 2006, representing 21.67
per cent and 34.86 per cent, respectively, of total
Government expenditure.
Touching on natural disaster management, Mr Baah-Wiredu said
in August and early September, 2007 an unprecedented heavy
rainfall led to severe flooding in Ghana, wreaking havoc in
areas that were already socio-economically disadvantaged.
He said the Government was mindful of the suffering
experienced by those so affected and had initiated actions
to address the existing vulnerabilities in consonance with
life-saving interventions.
GNA
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