President Kufuor's state of the nation address - Full statement

February 7, 2007, Accra Ghana

Mr. Speaker, the Constitution of the Fourth Republic prescribes that the President of the Republic delivers to Parliament a message on the state of the nation at the beginning of each session. This is what I have come to do.

Mr. Speaker, as I look around the House, I see empty seats on the Minority’s side.

It is a sad day that members of that side have chosen to absent themselves. It is sad again that they have resorted to this course of action, apparently in reaction to the judgment of a duly constituted court of law. It is even sadder that they seem to ignore the fact that the due process of going through appeals, as provided for by the Constitution, is yet to be exhausted, in this particular case.

Mr. Speaker, I want to use this occasion to ask them to reconsider their withdrawal from the House and come back to play their part to uphold the integrity of the House. I make this appeal in the light of the sincerity with which government is committed to the reconciliation process it has initiated for healing the wounds of the nation and to make for a fresh start.

Mr. Speaker, let me at this point acknowledge Mr. Abu Bonsrah, the honourable member for Fomena, who has taken his seat in the House from the recent by-election. I wish him a very successful term.

About two weeks ago, our own brother and compatriot, Mr. Kofi Annan, who has successfully completed two terms as Secretary-General of the UN returned home to Ghana to a hero’s welcome. He has since delivered a thought-provoking lecture which is the first in the series of the Golden Jubilee Lectures. I am sure the whole nation joins me in wishing him a happy return home, after his distinguished service for humanity.

Mr. Speaker, later, I shall talk about Ghana’s unanimous election to the Presidency of the African Union during this very auspicious year. Let me however thank the many well-wishers from around the country and beyond for their kind sentiments. The honour belongs to the entire nation.

INTRODUCTION
Mr. Speaker, when the 2006 budget was read in November 2005, many thought the practice would be a nine-day wonder. Happily, the tradition is being sustained and this year’s budget statement was read last November. As a result, government’s policies and financial plans for the year, as contained in the budget statement, have already been approved by the House. So, this morning I am addressing:

1. Key challenges within the socio- economy,

2. Issues of good governance, and

3. The on-going Golden Jubilee celebrations and their aftermath.

GHANA ON THE RISE
Mr. Speaker, my government assumed office in 2001 and had its mandate renewed for a second term in 2004. All too soon, it has reached the mid-point of this second term. All over the world, this period is considered critical for governments which are about to end their tenure, in that, they tend to engage in dispassionate assessment of their performance with a view to correcting their mistakes and consolidating their achievements for the time left. In this respect, this government is no different.

Propitiously, in our case, this critical mid-term analysis is coinciding with the Golden Jubilee Anniversary of Ghana’s Independence, as a sovereign nation. This reinforces the need for the government and the entire society to engage in stock-taking and re-setting of national vision and goals for advancement. Therefore, I expect subsequent discussion of this State of the Nation Address to be conducted in the spirit of candour and sincerity from all sides.

Happily, Mr. Speaker, the government’s assessment of the nation’s political, economic and social conditions of the state indicates that, on balance, GHANA, THE BLACK STAR OF AFRICA, IS ON THE RISE AGAIN. This should make all of us nationals happy about the various contributions and sacrifices we have made, individually and collectively, to bring the nation this far. The obvious challenge now is how to accelerate the development for the betterment of the entire society. This appreciation should strengthen our resolve to work together in overcoming existing problems and drawbacks like:

• The energy crisis that is plaguing industrial and economic activities.

• The pockets of conflict in the country, arising mainly from chieftaincy disputes,

• The low salaries, wages, and productivity, with their attendant high unemployment within the economy,

• The impact of Globalisation on socio-economic development programmes.

Mr. Speaker, it is within our power to overcome most of these challenges in the short to medium term. This is why we Ghanaians must will ourselves to work harder than we have ever done in the past 50 years.Fortunately, our path to success is benchmarked by our national vision of attaining a middle income status through a growth rate of 8% GDP annually, which translates to over US$1,000 GDP per capita income within the next decade.

Happily, this vision also coincides with the Millennium Development Goals set by the UN to reduce global poverty by half by 2015. Ghana is therefore not alone, like a long distance runner in search of a better life. Our task is made lighter in the knowledge that there are other nations around the world being encouraged and assisted by the international community to move alongside us in the same direction in overcoming these challenges.

Mr Speaker, within our category of developing nations, Ghana is being acknowledged as among the leaders in the pursuit of these goals. Thus government is determined to consolidate and build on the achievements made so far, and to turn the massive tide of goodwill that Ghana is enjoying worldwide to maximum advantage to facilitate this undertaking.

ENERGY AND POWER
Mr. Speaker, I shall start my message with a report on the current crisis in the supply of energy in the country. I believe this will go a long way in reducing the anxiety and the fears of the business community and the public in general.

The problem of inadequate energy supply has crept up on the nation since the construction of the Akosombo dam. With it, the whole nation was lulled into believing that the dam will be an inexhaustible source of power. The first signs that this belief was naïve appeared toward the mid 1980s when the nation suffered the first load shedding from Akosombo.

Alas, the economy was in no shape to support any serious solutions to the problem. There was a recurrence after the mid 1990s. It was then that resort was made to thermal plants like Aboadze. Fuelled by crude oil, these plants proved extremely costly to run.

On assumption of office in 2001, government decided to find long-term solutions to this problem. Accordingly, it initiated action to raise US$40million, being Ghana’s equity, for commencement in 2003, of the construction of the West African Gas Pipeline project. This had been on the drawing board for many years. The project, which will produce large volumes of relatively cheaper and sustainable source of energy, was expected to be operational by December last year. There has been some constructional delay and is now programmed to be operational in August this year.

Mr. Speaker, in anticipation of this flow of gas, the establishment of gas turbine thermal plants is being undertaken by public and private agencies.

In the interim, government has taken short to medium term measures to put an end to the embarrassing and expensive load shedding to which society and industry have been subjected to over the past six months. These measures include supply from the West Africa Power Pool arrangement whereby, within the next fortnight, Ghana will benefit from supplies from Nigeria and Cote D’Ivoire to the tune of 200 megawatts.

The Volta River Authority is poised to establish a 300 megawatt plant in Tema.

The same company is building another emergency plant to supply 126 megawatts of power by August this year.

The Osagyefo Power barge which has been standing idle will be empowered to produce 120 megawatts.

A private sector Ghanaian-Chinese joint venture company is in the offing to produce, in two phases, up to 600 megawatts of power.

Government has also contracted three American companies to produce up to 110 megawatts by the end of April.

This arrangement would altogether provide at least 500 megawatts which is far in excess of the present shortfall.

I should acknowledge at this point, the consortium of mining companies which has offered to build a plant at Tema, to be completed by June, to supply 80 megawatts of power.

Mr. Speaker, additional to these ventures, government has initiated action to build another hydro-electric dam, the Bui dam. As we speak there is a high powered delegation in China to sign an agreement with the Chinese Exim bank for assistance towards the construction of this dam which is designed to generate 400 megawatts of electricity.

So, Mr. Speaker, government has not been remiss in its responsibilities. On the contrary, it has taken steps to give both short and long term solutions to the problem. Within five years, the energy level will be doubled in capacity to cater for the industrial and economic requirements for the next 20 years.

Mr. Speaker, I should add that research is on-going to find alternative sources like solar, wind as well as biological plants like the jetropha whose seed is used to produce diesel oil.

Mr. Speaker, I should use this occasion to appeal once again to our entire society to be economical in the use of electrical appliances and also conserve energy within public offices and installations.

ECONOMIC PERFORMANCE
Mr. Speaker, despite the perennial problems of the energy sector, including the highest price ever of crude oil last year, this nation has registered very impressive achievements during the past six years in the management of its macro-economy.

Counting on the support and goodwill of Ghanaians, government has implemented various policies and programmes which have enabled it to transform the macro economy from years of stagnation to the current growth rate of 6.2%. From 40.5% in 2000, inflation now stands at 10.2%; while the commercial banks’ lending rate which stood at over 50% five years ago is now around 20% and is still falling.

The Cedi has stabilised and maintained its value against major currencies, thus encouraging the Bank of Ghana to initiate a process, starting from next July, towards its re-denomination. This is to make accounting procedures and monetary transactions less cumbersome for everyone and, also, to reduce the cost of printing money, or the burden of carrying huge amounts of money around.

Mr. Speaker, this outstanding performance of the macro-economy is boosting the confidence of both domestic and foreign investors, which is already on the upsurge. Ghanaians no longer feel the need to transfer their money abroad nor change it into foreign currency to preserve its value. Further, all over the country, there is evidence of vigorous construction work which must be taken as a sign of a growing economy.

Another manifestation of confidence is in increased remittances from Ghanaians living abroad, which totalled over US$4 billion last year.

On the financial front, 4 new banks, Guaranty Trust, Fidelity, Zenith and Intercontinental, have been established within the past 2 years.

Meanwhile, the bill for the establishment of an International Financial Services Centre, a partnership between the Government of Ghana and the Barclays Bank, is ready to be placed before Parliament. This is to further the policy of making Ghana an international financial hub. I encourage Honourable Members to give the bill the necessary backing.

In the case of the mining sector, I am happy to announce that I commissioned the operation of Newmont Gold mine at Kenyasi in the Brong Ahafo Region. It has already poured its first gold.

Barry Callebaut Ghana has also installed a new multi-million dollar processing line to expand its product range.

In the mean time, Cargill International, a global agro-processing company has started the construction of a new Cocoa Processing Facility in Tema, which involves over US$50 million in new investments.

Golden Exotic Company is the local subsidiary of the world renowned Compagnie Fruitiere of France. It started its operations in the country in 2003. From a first export of 3,600 metric tonnes of pineapples in 2005, the Company projects to export 17,000 metric tonnes this year. Such is the high performance which investors are now recording within our economy.

Mr. Speaker, in addition to such well-organised Private Sector companies, there is a host of others within the informal section of the sector whose potential is yet to be fully developed. Government will continue to direct various policies and measures to identify them, to assist them raise their production level and create more job opportunities, using micro as well as small and medium credit lines. This will not only improve their business, but also, help widen the tax net.

PUBLIC SECTOR REFORMS
Mr. Speaker, last year, I appointed a Minister to oversee the critical reforms needed in the Public Sector. The reforms are to rationalize operations in the sector, enhance the capacity of both the agencies and their staff and restore discipline and pride.

A well functioning public sector should also become more supportive of the Private Sector, in the spirit of Public- Private Sector Partnership, which should be the cornerstone for the acceleration of socio-economic development.

Last year, government adopted a new wage reform policy to set up a framework to ensure equal pay for work of equal value across the spectrum of the Public Sector. To operate, this new policy, a Fair Wages Commission has been set up to rationalize the entire sector’s salaries by removing distortions which, in the past caused confusion and disaffection among Public Servants.

The exercise which was preceded by salaries across the Board in this year’s budget has put a strain on government’s financial targets. Government however sees the increases as necessary investments to inspire public servants and change their mindset towards higher productivity.

HUMAN RESOURCE DEVELOPMENT
Mr. Speaker, in pursuit of the policy of Human Resource Development, the government is embarking on ambitious schemes in capacity building, skills acquisition, vocational training and application of science and technology. The centre-piece of this policy is the New Educational Reform to be launched in September, this year.

Already, following the introduction of measures like the Capitation Grant, School Feeding Programme, and School Bussing Programme, great strides have been made in school enrolments. It is expected that by 2015 Ghana would have reached 100% enrolment.

SECONDARY EDUCATION
At the secondary level, during the year, Government will commission the first batch of model Secondary Schools, numbering thirty-one (31), that have had their facilities upgraded. Contracts for the second phase of the upgrading programme, involving twenty-five (25) schools, have also been awarded; and construction has begun in many places.

TECHNICAL AND VOCATIONAL EDUCATION
Mr. Speaker, the same attention is being given to technical and vocational education. Government is embarking on an accelerated programme of construction, rehabilitation and equipping of technical and vocational institutes, and polytechnics throughout the country.