Business News of 2014-01-16

Brace yourselves for tougher times - NPP tells Ghanaians

The opposition New Patriotic Party has advised Ghanaians to brace themselves for tougher times in 2014 regardless of President John Dramani Mahama’s indications that the year is going to be the start of good things for Ghana.

According to the party, certain policy measures which were taken by the Mahama-led administration in 2013 have and will affect the daily lives of Ghanaians.

At a media forum to assess the first year of the Mahama Administration, Minority Spokesperson on Finance, Dr Anthony Akoto Osei referred to various instances to back the point that 2014 was going to be tough.

He cited the increase in VAT rates from 12.5 per cent to 15 per cent at the latter part of 2013, the increase in utility tariffs, and the depreciation of the cedi to the dollar, as well as the increasing public debt which now stands at $23 billion.

Dr Akoto Osei also noted that the National Petroleum Authority’s (NPA) signal that the automatic adjustment formula for petroleum products will be fully operational in 2014, in addition to an increase in the road levy have implications for higher pump prices would had obvious consequences on Ghanaians.

“Fellow Ghanaians, these are a few of the policy measures which have been approved by Parliament for the fiscal year 2014. Unless government intends to propose other policy intervention in the course of the year, then on the basis of the last poor performance on revenues and excessive over-expenditures since 2009, we predict that the year 2014 is likely to bring as many challenges to the average Ghanaian as the year 2013 did,” he said.

Renegotiate CDB loan

Dr Akoto Osei also recommended to President John Dramani Mahama to renegotiate the $3billion Chinese loan facility of the $3 billion Chinese loan facility agreement between the China Development Bank (CDB) and the Government of Ghana to ensure a speedy disbursement of an additional $1.6 billion

According to him, the urgent disbursement of these monies to aid capital expenditure programmes, will require a presidential intervention at two levels.

Dr Akoto Osei outlined that, government would be required to make a commitment fee pegged at one per cent of the undisbursed balance, noting that; so far, an amount of $54million had been paid as commitment fee.

He also opined that conditions precedent for the disbursement of the remaining loan were too complicated and cumbersome and needed considerable “relaxation.”

President John Dramani Mahama last week appealed to the China Development Bank to expedite the process for the release of the $3billion loan to Ghana during a courtesy call on him by the Chinese Foreign Minister, Mr Yi Wang, at the Flagstaff House.

The president noted that although Ghana had received only about $600 million from the $3 billion loan, the country continued to pay commitment fees on the whole loan and expressed the hope that the CDB team which is expected in the country next week, would tie all the loose ends and facilitate the processes for the release of the loan.