Minister for Finance, Seth Terkper, has requested for the approval of a Supplementary Estimate of GH¢3,196,855,671 for the 2014 fiscal year to enable government effectively run the affairs of the country.
The minister moved for the approval of the estimates when he presented the mid-year review and revised budget and macroeconomic targets for 2014 to Parliament today in conformity with Article 179(8) of the Constitution and Standing Order 143 of this House.
According to him, “these are necessitated by recent, and in some cases, longstanding global and domestic developments and to ensure that we maintain the pursuit of our growth and macroeconomic stability agenda".
He informed members that “the estimates had become necessary to make adjustments to accommodate the higher interest costs due to rising interest rates, borrowing, and exchange rate depreciation, higher foreign-financed capital expenditure due to the exchange rate depreciation, higher subsidies due to slower-than-expected implementation of utility and petroleum price adjustments, higher compensation payments to public sector employees as well as lower-than-expected tax revenues and grants".
The estimates he said also aimed to revise the macroeconomic targets for 2014, revise the budget estimates based on current information as well as outlined measures for addressing Ghana’s international reserves to restore the value of the Ghana Cedi.
He updated members on up-to-date performance of the economy in 2013 and the first five months of 2014.
Mr Terpker reiterated that notwithstanding the current challenges facing the country “the short-to-medium term prospects for Ghana remain positive".
He also announced expected increases in oil and gas exploration and production, particularly from the Jubilee, Sankofa-Gye Nyame and Tweneboa-Enyenra-Ntomme (TEN), recovery in cocoa prices, and public-private sector investments, including FDI, in key sectors of the economy.
"It is estimated that strategic infrastructure investments in the oil and gas sector could generate an additional US$2.5 billion in revenues, and increase GDP growth," he added.
He also touched on Ghana’s public debt, which he said stood at 55.77 percent as at end-December 2013, representing an increase from the December 2012 ratio of 48.03 percent.
“Ghana’s total public debt stock, which stood at GH¢35,999.64 million (US$19,150.78 million) as at end-December 2012, increased to GH¢52,125.91million (US$24,021.16 million) at the end of December 2013," he said.
He disclosed that of the total public debt stock, external debt stood at GH¢21,545.72 million (US$11,461.71 million) while domestic debt amounted to GH¢27,132.7 million (US$12,559.45 million), representing 47.72% and 52.28% of total debt, respectively.”
He also mentioned that the country’s Gross International Reserves stood at US$4,471 million at the end of June 2014 adding that this is sufficient to provide 2.5 months of imports cover compared to the stock position of US$5,632.15 million at the end of December 2013 which could cover 3.1 months of imports.
On the revised 2014 macroeconomic targets he said overall real GDP (including oil) growth was targeted at 8.0 percent,non-oil real GDP growth at 7.4 percent whiles an end year inflation was targeted at 9.5 percent within the band of 2 percent.
"Mr Speaker, GDP grew by 6.7 percent in the first quarter of 2014, down from 9.0 percent in the corresponding period in 2013. In a marked departure from the sectoral performance in the first quarter of 2014, the Agriculture Sector led with a growth of 12.7 percent, up from 6.7 percent in the analogous quarter in 2013. The Services Sector followed with a growth of 4.6 percent, down from 10.4 percent in the same quarter in 2013, while the Industry Sector declined by 1.1 percent, down from 8.1 percent in the corresponding period in 2013," he said.
He told the House the upsurge in prices has been influenced mainly by the non-food components of the Consumer Price Index (CPI) adding that non-food group recorded an average year-on-year inflation rate of 20.3 percent in June 2014, compared to 20.0 percent recorded in May 2014.
Speaker of Parliament, Doe Adjaho soon after the presentation quoted standing orders 140 and 149 and informed members that the motion for the adoption and approval of the estimates would be seconded and debated tomorrow.
Source: ISD (Gilbert Ankrah)