Government upbeat about growth targets

The government has downplayed alarmist indications by some industrial stakeholders about the possible repercussions of the current energy crisis on national economic growth this year.

Minister for Finance and Economic Planning, Mr Kwadwo Baah-Wiredu has told the Business Week newspaper on Friday that government is confident of achieving the 6.5 GDP growth target set in this year's budget in spite of the shortfall in energy supply that has resulted in the nationwide load-shedding exercise.

Mr Baah-Wiredu said the effect of the energy crisis on manufacturing notwithstanding, growth in the agricultural, construction, mining and services sectors will positively impact on national economic growth performance.

“We are hopeful that agriculture and the other sectors will perform well,” he said.

The Finance and Economic Planning Minister said government would not contemplate any downward review of the GDP growth target. However, it is constantly monitoring trends in the economy and any decision in that direction will come after consultations with the Statistical Service.

“One must first listen to expert advice from the government statistician to know if there are changes in adjustments before proceeding to review projections and forecasts in growth,” he stated.

Business Week learnt from a reliable source at the Association of Ghana Industries (AGI) that a special meeting which was scheduled to take place last Thursday between the Minister of Energy, Joseph Kofi Adda, and the leadership of the umbrella body of industries on the effect of the energy crisis on industries failed to take place for unexplained reasons.

“We waited since morning to attend a meeting with the energy minister but we hadn’t heard from his office as at 6 pm,” the source said.

The AGI, the source disclosed, intends to table a request to government for an incentive package for manufacturers who are bearing the brunt of the crisis with huge financial implications to their production capacity.

When the Finance Minister’s view was sought by the paper on the issue of an incentive package for manufacturers, he rejected the suggestion with the explanation that government was not in a position to finance the idea under the current budget.

He said about US$700 has been allocated for the construction and installation of alternative energy plants this year alone.

The 2007 budget notes that for the past three years, economic growth targets had been exceeded, with the year 2006 recording 6.2 percent as against a projection of 6 percent. For 2007, 6.5 percent is the confident forecast.

Last year’s growth of 6.2 was mainly driven by the significant growth experienced in industry and the services sectors which are now directly affected by the ongoing load shedding.

According to the budget, growth in agriculture is projected at 5.7 percent, representing about 3.5 percent share of GDP. Industrial and growth including mining and manufacturing is projected at 7.3 percent.