The Finance Minister, Ken Ofori Atta has revealed that government’s prudent economic policies and programmes are yielding the expected results, to position the economy back on track .
According to him macro-indicators for the first half of the year are pointing in the right direction as GDP for first quarter of 2017 grew by 6.6 percent against 4.4 percent for the same period in 2016.
Ken Ofori Atta revealed this on Monday when he presented the Mid-Year Fiscal Policy Review of the 2017 Budget in accordance with Section 28 of the Public Financial Management Act, 2016 (Act 921).
He pointed out that government’s focus in the first half of the year was to stabilize the economy and re-establish the principles of good economic governance.
“We want to provide good economic environment for businesses in particular and to get Ghana working again and I am happy to say that the economy is stable: Inflation is trending downward , the cedi has stabilised
, interest rates are lower ,” he said.
“The macro-fiscal performance we have achieved in the first six months of President Akufo-Addo’s administration is showing remarkable progress. ..The major macroeconomic indicators are now trending in the right direction indicating that the economy is on track,” he told the House.
“Progressively, confidence is being restored in the economy and we are hopeful that it will be sustained. The macro-indicators for the first half of the year are pointing in the right direction. We replaced the 17.5% standard rate to a 3% flat rate. We reduced the special petroleum tax from 17.5 to 15% and abolished duties on spare parts.
“The deficit on commitment basis is now on 10.9%, up from the previous 10.3%. In recent years, the country accumulated high debts; our debt stock increased to GhC122bn, that is 1154%. We inherited a weak economy, characterised by high fiscal deficits,” he added.
Ken Ofori Atta told the House that these indicators clearly shows that the economy is on the path of recovery and investor confidence has been restored adding that the business and consumer confidence surveys by the Bank of Ghana conducted in June 2017 broadly reflects positive sentiments in the direction of the economy as noted in the July edition of the Bank of Ghana’s MPC press release.
He said the fiscal deficit, interest rates are beginning to point downwards due to the sound economic management of the economy.
He admitted a fall in revenue targets and pointed out that expenditure levels have also been reduced accordingly.
The Finance Minister noted that measures have been taken at the country’s ports to ensure that corrupt activities are nipped in the bud in order to shore up the revenue receipt.
He informed the House that government has saved the country an estimated $1 billion after it renegotiated and restructured the terms of a Liquefied Natural Gas (LNG) supply contracts entered into by the past government.
He assured government’s commitment to strengthen the implementation of revenue measures to ensure that we meet our revised revenue targets.
“To ensure that the fiscal objectives and targets are not compromised, we will make the necessary downward adjustment to discretionary expenditures in the event that we are not able to meet our revenue targets,” he said .
He told the House that despite the measures being taken to maintain the country’s fiscal discipline, government remains strongly committed to growing the economy and delivering services through strategic allocation and efficient use of resources.
Mr Ofori-Atta said the government has also approved the VRA restructuring agenda to bring about “increased operational efficiency and private sector investments in the power sector.”
The Minister also disclosed that Cabinet had approved the establishment of the Electricity Market Oversight Panel (EMOP) to infuse operational sanity in the generation and supply of electricity in the country particularly “managing and optimising hydroelectric generation in the country.”
Mr Ofori-Atta promised that second half of the year will see commencement of actual implementation of government’s flagship programmes adding that new businesses will be set up under the one district one factory programme, with existing businesses stimulated and rejuvenated
Vice President Dr. Mahamudu Bawumia together with other senior members of government where present to witness the presentation.