5.4 Percent GDP Projected For 2000-2002 In Ghana

Accra, Ghana (PANA) - Ghana's finance minister, Kwame Peprah, has presented the government's financial and economic policy to Parliament, projecting an average GDP growth rate of 5.4 percent for the 2000-2002 medium term and an end of period inflation rate of 8 percent.

He put the average overall broad budget deficit equivalent to 4 percent of GDP, an average primary budget surplus equivalent to 3.1 percent and an overall balance of payments surplus of 107 million US dollars for the three-year period.

For 2000, a real GDP growth is targeted at 5 percent, with an end-of-period inflation of 12.5 percent, Peprah said Wednesday in his presentation.

He projected the budget deficit for 2000 at 6.1 percent of GDP with a zero position target in overall balance of payments.

Peprah said the projected 5 percent growth of GDP for 2000 is further based on an envisaged growth of 4.2 percent in the agricultural sector, 5.1 percent in industry and a 5.9 percent growth in services.

He added that in line with the overall macro-economic targets for 2000, receipts are projected at 8,633.1 billion cedis, representing tax revenue of 4,299.4 billion cedis, non-tax revenue of 420.0 billion cedis, foreign grants of 961.6 billion cedis and divestiture receipts of 456.8 billion cedis.

He said project and programme loans are projected at 1,322.5 billion cedis and 694.8 billion cedis, respectively, while net domestic financing of the budget is estimated at 548 billion cedis.

Total payments for 2000 are estimated at 8,633.1 billion cedis, out of which statutory payments are estimated at 3,314.3 billion cedis, while discretionary payments are programmed at 5,318.8 billion cedis.

Interest payments are projected at 1,389 billion cedis, out of which 911 billion cedis is for payment of domestic interest.

An amount of 161.8 billion cedis has been provided for transfers to households, namely pensions and gratuities.

It is estimated that an amount of 303 billion cedis will be transferred into the Road Fund, while 200 billion cedis, which will be generated through additional VAT receipts, is expected to be transferred into an Education Trust Fund.

Balance of payments projections for 2000 show that exports will increase by 1.2 percent to 2,056 million dollars. The value of cocoa exports is expected to decrease by 20.0 percent to 435.0 million dollars as a result of projected decrease in average price.

Peprah said Ghana's total debt is estimated to decrease to 5.5 billion dollars in 2000 and to remain approximately at this level through to 2002.

At the end of 1999, Ghana's GDP grew by 4.4 percent, about 1 percent below the initial projection of 5.5 percent, and below the 1998 growth of 4.7 percent, according to Peprah, who blamed the stagnation of the 1999 GDP growth on declining prices of cocoa and gold - major hard currency earners of the country.

On poverty reduction, he said the results of a survey indicate that the percentage of the Ghanaian population classified as poor fell by 8.2 percent between 1992 and 1999 even though the decline was unevenly distributed across geographic regions and socio-economic groups.

The minister asserted that the improvement in welfare was a direct outcome of government's economic and social policies targeting the poor and the vulnerable groups in society.

"These policies have over the years been backed by annual increments in government expenditures for the social sector, which have had a positive impact as depicted by social indicators," he noted.