Government taken proactive policy actions to address risks

By Patience A. Gbeze, GNA

Accra, Aug. 23, GNA
– Mr Seth Tekper, Minister of Finance and Economic Planning, said the
government has since 2015 taken proactive policy actions to address the various
emerging risks in the economy.

He said world-class
technical partners are fixing the technical issues that disrupted oil
production at the Jubilee Field, which has resulted in two field production,
storage and off-loading vessels (FPSOs) and two oil production fields are in
place in 2016 as against only one in 2015.

He said average
daily production from Jubilee in 2016 hovers around 74,000bbls per day and the
normal oil production level from Jubilee is expected to begin early 2017.

Mr Terkper,
speaking at his turn at the Meet-The-Press series in Accra, said TEN Field
would come on stream in the third quarter of 2016 to balance production levels,
while Sankofa would start production in 2017/2018.

He explained that
work is being done in phases for production to continue at reasonable levels.

One Electrical
Power Supply disruption, he said, short-term (emergency) and longer horizon
power projects are being implemented to generate capacity increase and
dependable power against peak demand doubled.

He said energy mix
were adjusted to reduce reliance on water levels at dams, leading to thermal
capacity build-up to replace unreliable hydro and reducing hydro contribution
from 58 per cent to 27 per cent to mitigate reduced dam water levels.

“Domestic gas
production was encourage to mitigate supplier risk and this contributed to gas
now being produced in-country at Atuabo Gas Plant,” he said.

Mr Terkper said
tariffs were also adjusted to market rates to make the industry attractive and
to improve recovery levels and has resulted in more than 82 per cent of the
Ghana’s population connected to the national grid, while 59 per cent increase
in tariffs with subsidies eliminated.

He said the
government has put in place policy action to revamp Medium Term Debt Management
Strategy in agreement with IMF as well as continued focus on fiscal
consolidation and expenditure control.

Others include
stricter oversight of State-Owned Enterprises (SOEs), subsidies eliminated and
centralise revenue and special levels collection with SOEs debt repayment
prioritised.

He noted that the
Ministry is working actively with the banking community to restructure and
repay SOE debt in a timely fashion to avoid contagion or systemic risks.

All these policy
actions, he said, have led to significantly lowering of fiscal deficit with
near positive primary balance to allow new borrowing requirement lower and pace
of debt growth drastically slowed alongside focus on debt repayment.

“As a result, most
borrowing activity now targeted at refinancing to elongate tenor and reduce. It
also demonstrate track record in the Eurobond market with ability to manage
liabilities and smoothen the repayment profile.

“Sinking fund was
set up to set-aside dollar income for debt redemption; funds being collected
from the special energy levies and will be used to repay SOE debt,” he said.

Mr Terkper said an agreement
in principle has been reached with banks to restructure SOE debts and also
efforts are underway to increase tax revenue and the domestic debt market is
being deepened with focus on debt sustainability.

In the area of
election related event risks and overspending, the Minister said, high level
political commitment to fiscal prudence with hard choices such as wage bill
caps, tariff increases and subsidy elimination is being implemented to
eliminate non-budgeted expenditures.

Similar prudent
policy actions are taken to ensure growth and government earnings as well as
macro performance.

Mr Emmanuel Kofi
Buah, Minister of Energy, said with the latest discovery of the new oil field
at Tweneboah Enyenra-Ntommre, it would boost the country’s gas production as
well as manufacturing of fertilizer for the local farmers.

He said that would
give the country more gas to power the energy generating plants to solve the
current power outs that the country is facing.

GNA

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