Terkper outlines challenges to Ghana's economy

In spite of the economic successes it has chalked, the Government’s resolve at rebalancing the Budget came under severely test when the economy encountered significant shocks in 2013, many of which continued into the 2014 fiscal year.

Mr Seth Terkper, the Minister of Finance, made the observation during his presentation of the 2015 Budget Statement to Parliament in Accra on Wednesday.

He said the challenges included the continued disruption in the supply of gas from the West African Gas Power Pool (WAGP) from August 2012 through August 2014, due to the damage caused to the pipeline, adding that this had inflicted significant adverse effects on power supply, national output, foreign exchange reserves, and tax revenues.

“The fall in gold and cocoa prices has had similar effects and, required sacrifices by our hardworking cocoa farmers as well as Government in the form of curtailed producer price and export duty respectively. Hence, we have reason to commend our farmers and return the favour with the producer price increase that we announced this year”, he stated.

There was, also, the sluggish inflow of grants from some Development Partners for the third year in succession which constituted about 75 per cent below what was pledged to support the budget, Mr Terkper said.

“While the slump in petroleum prices during the third quarter of 2014 has benefitted our automatic adjustment policy, it is also a factor that becomes important in our quest to utilize the petroleum funds under the PRMA for savings, stabilization and investment.”

The Finance Minister said it was at this critical juncture that the Government decided to request the IMF for Balance of Payments support that only comes from a funded IMF Programme.

“Indeed, the enhancements to the Home Grown Policies which would have expired in 2016/17 and outcome of the Senchi consultations have been used as a vital input for the on-going Programme discussions with the IMF”, he added.

He indicated that the discussions had been progressing well, and that when time was ripe for the IMF Board to approve the Programme, the Government would give Parliament an update.

On the Ebola threat in West Africa, Mr Terkper said it posed a significant risk to the region’s growth prospects, particularly its effects on the tourism and the hospitality sub-sectors.

“It is instructive to note that, His Excellency, President John Dramani Mahama, in his capacity as the Chairman of Economic Community of West African States (ECOWAS), has been at the forefront of the humanitarian efforts to mobilise both financial and material resources to bring the epidemic under control”.

He noted that Ghana had been designated as the UN centre for coordinating global response to the Ebola crisis owing to the sterling leadership of President Mahama, and indicated that Government was implementing several safety measures to protect the citizenry from the virus.