Financial Journalists Attend Seminar on 2011 Budget

Accra, Nov. 25, GNA - Government would continue exercising fiscal discipline to limit the increase in public sector borrowing requirements, in order to reduce the cost of domestic debt.

This would reduce domestic interest rates further and permit the rolling over of existing debt at lower cost, thereby allowing lower interest cost to release resources for productive expenditures. Mrs Nelly Mireku, economist at the Economic Research and Forecasting Division of the Ministry of Finance and Economic Planning, stated this when she gave an outline of the government's debt sustainability outlook for 2011, at a seminar on the 2011 Budget held for financial journalists in Accra on Wednesday.

"The key strategy of the new financing plan includes minimizing cost by maximizing concessional borrowing and monitoring the evolution of external debt indicators in relation to sustainable thresholds," she said. She said Government was determined to ensure that it received the best quality of external aid that did not lead to future debt sustainability problems. On macroeconomic performance during the year 2010, Mrs Mireku said provisional figures based on the January-September 2010 actual data indicated that Ghana's economy had expanded by 5.9 per cent against a GDP target of 6.5 per cent, as at September this year. The agricultural sector grew by 4.8 per cent in 2010 against a target of 6.0 per cent, while growth in the industry sector registered seven per cent ad against a 6.6 per cent target. "The services sector grew by 6.1 per cent and displaced the agriculture sector as the highest contributor to GDP," she said, adding that gross international reserves at the end of October 2010 stood at $3,973.0 million, enough to cover 3.2 months of imports of goods and services. Mrs Mireku also outlined Government's medium-term development strategy for 2010-2013, citing oil and gas development and management, the ensuring and sustaining of macroeconomic stability, accelerated agricultural modernization and sustainable natural resource management, enhancing international competitiveness of Ghana's private sector, and the entrenchment of transparent and accountable governance, among others, as some of the sign posts.

She noted that revenue mobilization was one of the major challenges as far as government's development targets were concerned, and said her Ministry hoped to address the problem through the implementation of appropriate tax reforms and institutional arrangements to make the collecting agencies more efficient and effective. She affirmed Government's determination to strengthen expenditure management through the full-scale implementation of various reform schemes initiated by the Finance and Economic Planning Ministry to maximize revenue mobilization. Deputy Finance Minister Seth Tekpe urged financial journalists to use their professional expertise to help erase wrong public perceptions about the budget, citing particularly the general misconception that taxes had been increased in the 2011 budget. The Deputy Minister dismissed rumours about government's intention to place a tax on sachet water, and explained that even in the case of bottled water which already had a levy on it, the tax element was not with the water but the plastic bottle which was a pollutant.