Economy on the path of growth -Finance Minister

By Linda Akrasi Kotey

Dr. Kwabena Duffuor reading the Budget Statement on at the floor of the Chamber of Parliament. Picture by Eric Owiredu

The Finance and Economic Planning Minister, Dr. Kwabena Duffuor, says the theme for the 2011 Budget, “Stimulating Growth for Development and Job Creation,” has been chosen to focus attention on the need to propel the economy onto a higher growth and development trajectory.

He added that the budget would also focus on major growth-oriented programmes and projects that would improve and sustain Ghana’s middle income status, as there would be significant investments in the areas of energy, road, and rail transport to facilitate private sector expansion for employment generation.

Presenting the economic policy of the government for the year 2011 in Parliament yesterday, the Minister stated that two years on, despite the challenges, the government had made significant progress, with the economy showing strong resilience and stability.

He noted that growth-driven investments would be complemented by social intervention programmes, in line with the core values of the National Democratic Congress (NDC) in providing equality of opportunities and improvements in the social development of our people.

Dr. Duffuor said the “Better Ghana” agenda would be achieved through the implementation of sound and prudent economic policies, intended to ensure continuous stability, and to stimulate growth within an environment of good governance.

The Minister maintained that interim growth figures released by the Ghana Statistical Service clearly show that they had been able to return the economy to a path of sustainable growth.

Oil and gas production, which will be on stream very soon, would further consolidate this effort and ensure accelerated growth. The careful and rigorous rebasing of our national income has revealed that the size of the economy has become bigger.

The Minister mentioned that the year 2011 marked the beginning of Ghana’s oil and gas production in commercial quantities and a major challenge would be how the oil revenues will be used to transform the economy, and accelerate growth without sacrificing macro-economic stability, and accentuating income inequalities.

Based on experiences from other oil and gas producing countries, the government, he stressed, was taking steps to manage the oil and gas revenues in a manner that would ensure that the building blocks for accelerated growth and development, namely, social, economic and physical infrastructure, are appropriately improved.

“It is in this context that we recently presented to Parliament, the Petroleum Revenue Management Bill,” he added.

The Minister said it was the duty of the government to ensure equity and fairness in salary administration, and reward Ghanaian workers for their commitment to economic growth and development.

The budget, he added, demonstrates the government’s commitment to do just that, and in order to fully meet the challenge of a comprehensive administration of the Single Spine Salary Structure, it had focused on improved efficiency in revenue management.

He announced that the government would harness and use effectively, available resources from both domestic and foreign sources, all to deliver on their pledge of a ‘Better Ghana,’ and continue with its prudent fiscal and monetary policies to sustain the macroeconomic stability for improved private sector growth, which it believes, will stimulate employment, and improve the quality of life for Ghanaians.

Touching on the major achievements of the economy, he explained that GDP growth of 4.1 per cent in 2009, compared to “Our ‘Better Ghana’ agenda, is to be achieved through the sub-Saharan Africa growth of 2.0 per cent. The fiscal deficit reduced significantly from 14.5 per cent of GDP on cash basis at the end of 2008, to 9.7 per cent of GDP in 2009.”

Inflation has trended downwards in sixteen consecutive months, from 20.74 per cent at the end of June 2009, to reach 9.38 per cent in October 2010, the lowest in the last two decades.

Gross international reserves of US$3,973.0 million at the end of October 2010, had exceeded three months of import cover, compared with reserves of US$2,036.2 million at end December 2008, which could barely cover two months of imports.

The Cedi, he noted, had also strengthened and appreciated by 0.1 per cent, 2.2 per cent and 5.4 per cent against the US dollar, the pound sterling and the euro respectively.]
“Madam Speaker, with the progress made so far, I can confidently state that we are ready to make the transition from stability to accelerated growth,” he said.

He hinted that as a result of the collective efforts of all towards good governance, since the inception of the Fourth Republic, “our dear nation Ghana has now joined the league of middle income countries.”

This, he said, was manifested when they met their development partners in Accra in September this year, where they reaffirmed their faith in Ghana and in its policies and prospects.

“With their support, and more importantly, through our own efforts, we will forge ahead with the challenge to ensure an accelerated growth and development, as well as fair and equitable income distribution.”

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