BUDGET: Ghana to build more reserves
Accra, Feb 5, GNA - The Government would pursue the policy of building up external reserves that would serve as cushion to the economy against unanticipated external shocks.
To achieve this, policies geared towards attracting foreign direct investment and increasing foreign exchange earnings substantially would be pursued, Mr Yaw Osafo-Maafo, Minister Finance and Economic Planning, announced when he presented this year's Budget Statement to Parliament on Thursday.
He said Balance of Payments projections for 2004 indicates a bright outlook, comparable to 2003. This is derived from the general macro-economic stability experienced in the country in recent years as well as the policy interventions put in place to prop up the export sector.
The Minister said export receipts were expected to grow by 2.3 per cent to 2,368.0 million dollars. Cocoa is expected to contribute over 33 per cent of this growth by generating 784.0 million dollars, while gold was also expected to grow by 27.8 per cent to contribute about 32 per cent of total export earnings.
Exports of timber and timber products are also expected to generate an amount of 188.0 million dollars equivalent to about eight cent of total export receipts.
He said other exports including non-traditional exports are expected to contribute 640.0 million dollars the equivalent of 27 per cent of total export proceeds.
Imports are projected at 3,355.0 million dollars in 2004, out of which oil imports are expected to account for 17 per cent amounting to 571.0 million dollars.
The trade balance, is thus, projected to record a deficit of 987.0 million dollars.
Mr Osafo- Maafo said the Services Account is projected to record a net deficit of 288.0 million dollars while unrequited transfers are expected to record a surplus of 1,177.0 million dollars of which private unrequited remittances are projected at 841.0 million dollars and official transfer (net), 433.6 million dollars.
" The current account balance (excluding official transfers) is expected to record a deficit of 434.0 million dollars, including net official transfers this deficit reduces to 98.0 million dollars", he said.
The capital account balance is projected at 26.0 million dollars made up of official capital inflow of 65.0million dollars and private capital outflow of 39.0 million dollars.
Thus, he said, the surplus on the capital account will fall short of what is required to finance the projected deficit on the current account and consequently, the overall balance of payments is expected to record a deficit of 72.0 million dollars.
Exceptional financing is expected to amount to 221.0 million dollars, out of which 72 million dollars wouldl be used to finance the deficit in the balance of payments and the remaining 149 million dollars used to augment the Bank of Ghana's international reserves.