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General News Thu, 24 Mar 2005

It's Harsh, but it's the only way out - JAK

PRESIDENT ON PETROLEUM PRICE INCREASES

The President, Mr J. A. Kufuor, has stoutly defended the recent petroleum price increases and the deregulation policy, saying that they are meant to free resources for accelerated national development.

He submitted that about ?2 trillion that was used to subsidise fuel supplies last year could have been used in other sectors of the economy to generate wealth and employment.

Addressing the fourth People?s Assembly held in Accra yesterday, President Kufuor explained that deregulation and petroleum price increases were corrective measures towards full recovery on petroleum products.

?The measures were also intended for the Government to raise enough taxes to reduce the country?s over dependence on donor support for capital development and bring Ghana?s pricing in line with what pertained in the West African sub-region as well as reduce smuggling,? he further explained.

The People?s Assembly programme was designed to provide a platform for direct interaction between the people and the President.

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President Kufuor said, looking at the burden which the Government?s continued involvement in the importation of crude oil placed on national resources and the worsening conditions on the world market, there could not be any doubt that ?this is the time to liberalise the sector and encourage private sector participation.?

?Deregulation is of critical importance and cannot be avoided,? he stated, adding ?The Government owes it to the people to develop the country, but it cannot do this very well while subsidising the cost of crude oil.?

In pursuit of a programme to cushion the public, the President said the Government decided to reduce personal and corporate income tax. President Kufuor said a total of ?229 billion would be released from tax revenues and put back into the pockets of people.

President Kufuor reiterated that the implementation of the free compulsory universal basic education (FCUBE) policy would start this year. He said the Government had decided to pay an annual capitation grant of between ?20,000 and ?25,000 on every schoolchild in first-cycle institutions. He said the Government would be spending ?100 billion if it paid ?20,000 each as grant on five million children.

Expantiating on the fuel situation in the country, President Kufuor stated that the tax element of the recent fuel price increases amounted to 42 per cent which, he noted, was the lowest in the sub-region, yet ?our Wahala friends want to bring heaven down.?

Source: Graphic
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