Business News of 2014-07-18

Terkper blames inability to meet target on "unexpected occurrences"

The Minister of Finance Seth Terkper has said the inability of government to meet set economic targets, is due to a number of pressures which continue to pose challenges to the economy.

He said “the fall in gold and coca prices on the world market as well as the depreciation of the cedi caused the inflow of revenue expected into the country to reduce and this affected the achievement of this year’s economic target”.

Speaking on Citi FM the Finance Minister stated that although cocoa prices seem to be stabilizing, the continuous decline in the prices and volumes of gold still create risks to the country’s external position and domestic revenue mobilization.

He further stated that another contributing factor is the recent unstable power crisis which disrupted power production and output causing the country to depend on higher imports of crude for thermal power generation thereby, reducing the amount of revenue generated.

The country has experienced a year-long shortage in gas supply from the West African Gas Pipeline causing the country to experience a number of power cuts within the period.

The frequent breakdown of the Takoradi International Company (TICo) coupled with the reduction in water level in the Bui Hydro electric Dam, also contributed greatly to the intermittent supply of power in the country.

The situation compelled many businesses to resort to use of generators as alternative modes of power supply. However, the Finance Minister said, expansion works at the Bui dam and the Takoradi Thermal Plant are still ongoing and when completed, will prevent any occurrence of power crisis in the country.

Meanwhile, Mr. Terkper has stated that the inability of government to achieve set targets and the country reaching lower middle income status has made partners unwilling to support the country.

“As we become a middle income country and progressed in that context, the definition of need in terms of middle income country begins to affect us so we should expect to get less of grants”.

In order to support ourselves in absence of these grants, Mr Terpker said Ghanaians must begin to patronise made in Ghana goods and businesses must endeavor to export more of their products rather than importing at all times. This in the long run will also help strengthen the falling cedi, he added.

Mr Terpker explained that reasons why half of the 3 billion dollar China Development Bank (CDB) loan facility has been abandoned is due China’s unwillingness to re-negotiate the terms of the loan adding that, they insist on using $85 dollars per barrel of oil as the price to pay back the loan although oil prices have gone beyond $100 on the world market.

This he says, will mean Ghana will lose $25 on each of the 750 million barrels to be used to pay the loan.

Source: myjoyonline.com
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