Highlighting on events on the floor of Parliament Wednesday, which have led to Ghana’s economic woes, Finance Minister, Seth Terkper suggests there should be more attempts to improving the economic management systems of the country.
He added new ways have also been fashioned out by the government to better implement the Single Spine Salary Structure (SSSS) with additional focus on managing ‘our Lower Middle Income Country status’ transition.
Presenting his Mid-year Review and Revised Budget and Macroeconomic targets for 2014 to the August House, Mr. Terkper noted, these could help better manage volatilities such as disruptions in power supply as well as commodity price shocks.
Ghana’s economy currently is bedeviled with myriads of problems needing prompt attention.
He continued: ‘Furthermore we must endeavour to address the risks posed by events in the global environment, including the difficulty with which the global economy continues to emerge from the worldwide financial and economic crisis.’
According to him, the year-long shortages in gas supply from the West Africa Gas Pipeline and the frequent downtime of the TICO and BUI projects and others, led to the government relying on higher imports of crude oil for thermal power generation.
‘These factors have adversely affected the nation’s growth and output, domestic revenue mobilization effort, as well as balance of payments and reserves position,’ the Minister indicated.
‘In addition, they have considerably undermined the implementation of policy decisions, such as the automatic utility price adjustments, thereby, giving rise to the payment of higher subsidies.’
Mentioning, further that they have added to the complexity in managing an economy in transition to a Middle Income Status.
‘A complexity reinforced by the cuts in grants and in the terms on which the country can now attract grants and concessional financing, notably from the development partners, including the World Bank and African Development Bank,’ he added.
However, Mr. Terkper observed that despite the challenges, the short-to-medium term prospects for Ghana remained positive.
He pointed out that the positive posture has been driven by ‘expected increases in oil and gas exploration and production, particularly from the Jubilee, Sankofa-Gye Nyame and Tweneboa-Enyenra-Ntomme (TEN) fields backed by factual evidence such as the building of a second Floating Production Storage and Offloading (FPSO) vessel and ongoing negotiations for gas pricing.
‘The recovery in cocoa prices, a stable outlook for petroleum prices (with positive impact on revenue yields), and further expansion of the services sector; public-private sector investments, including FDI, in key sectors of the economy, contributing to the diversification and value addition into the economy; reduction of the infrastructure deficit; and boosting Ghana’s growth potential.
‘A notable example is the imminent completion of the gas pipelines and processing plant to stabilize and improve the supply of energy and domestic output, among others,’ the Finance Minister cited.
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