State Of The Nation Address OPPORTUNITIES FOR ALL Delivered By H. E. John Dramani Mahama President Of The Republic Of Ghana
Continued from Friday, February 22 2013 issue
• Re-invigoration of the traditional interschool and colleges sports competition programs
• Reserve some admissions to Senior High Schools for talented sports and other creative students among other interventions
• Completions of the Cape Coast Stadium as promised by our late President John Evans Atta Mills
• Restructuring and re-orientation of the National Sports Authority to enhance its efficiency and effectiveness in the discharge of its mandate
• Development of the lesser known sporting disciplines among others.
Mr. Speaker, I stated in my address to the UN General Assembly last year that the youth are today’s leaders and not future leaders. In order to enable our youth realise their full potential and contribute to National development, we have fashioned out comprehensive programmes including but not limited to:
• A GH¢10 million Youth Jobs and Enterprise Development Fund which will be launched to encourage and support young people to become successful entrepreneurs and create sustainable job opportunities
• Job and Enterprise Centres (JEC) will be established in all regions to help unemployed youth and those about to enter or prepare for the world of work.
• Develop Youth Centres in Districts to facilitate youth meetings, interactions, cultural programs, conferences and inputs into District Assemblies’ deliberative mechanisms
• Continue with the National Youth Achievers Awards, which I introduced last year to institute and encourage Young Achievers.
• Revamp all the Youth Leadership Training Institutes and utilize them for year round training of youth in leadership, civics, patriotism and other nation building curricula
SADA & WESTERN CORRIDOR
Mr. Speaker, the Savannah Accelerated Development Authority (SADA) has agriculture as a key part of its agenda. In the spirit of Public-Private Partnership, SADA has facilitated partnerships to establish three agro processing factories- a sheanut processing factory at Buipe, a rice mill at Nyankpala near Tamale and a vegetable oil mill at Tamale. The Produce Buying Company is currently raising the capital to begin sheanut purchases to feed the factory.
Mr. Speaker, this will benefit tens of thousands of poor women in the savannah zone of this country. Outgrowers are being registered to meet the requirements of these factories. In 2011, SADA supported 6,00o farming families Last year SADA registered and supported another 16,000 farmers this year with farm inputs, including fertilizers, improved seeds and tractor services for land preparation services. SADA through its greening the Northern Savannah ecological zone agenda, has partnered with a private sector group to grow and nurture 5 million trees in the next 12 months. This is providing 5000 jobs across the North.
Mr. Speaker, based on the example of SADA, I directed a team in my office and the NDPC to work closely with the two Regional Coordinating Councils and relevant stakeholders towards establishing the Western Corridor Development Authority, comprising Western and Central regions. The implementation framework for the Authority is currently under development.
Mr. Speaker, the Social agenda outlined above informs our economic policy which I would like to touch upon at this juncture.
PILLAR TWO- A STRONG AND RESILIENT ECONOMY
Mr. Speaker, the economy of Ghana has over a period of more than two decades consistently witnessed a positive growth rate. This back-to-back growth registered from 1986 culminated in the attainment of lower middle-income status in the year 2010. This positive performance was taken to a whole new level in the year 2011 when our country registered what Is believed to be probably the highest growth rate in the world- a whopping 14.4 percent growth in GDP. Since then our country has maintained its ranking among the 10 fastest growing economies in the world.
My vision in this first term of my presidency is to work to sustain economic growth rates at a minimum of eight percent in line with our goal of moving our country from a lower middle income status to the full middle-income bracket. This we must do as we strive to achieve our set social objectives.
In the area of macro-economic stability, we have made significant progress. Inflation that for so long had been in double digits, has for the first time in our history remained within single digit for over thirty long months. Apart from the first half of 2012, when the cedi experienced serious pressures resulting from a huge balance of trade deficit, the currency has continued to enjoy relative stability.
This relative stability has been boosted by the relatively strong foreign reserves of the country that have increased significantly from about $2billion at the beginning of 2009 to the current $5.5billion. The banking sector that in 2009 experienced relatively high non-performing loan ratios has seen a marked improvement in its NPL ratio and has seen increased profitability and assets growth.
Mr. Speaker, these macro-economic improvements and the sustained strong economic growth rates we have recorded, have made Ghana a very attractive destination for portfolio and foreign direct investment- a factor which is critical in our quest to rapidly diversify and transform our economy and reduce our vulnerability to external shocks.
Mr. Speaker, the challenge facing us now is a misalignment of the expenditure categories in the Budget namely, emoluments (i.e., wages, salaries and allowances), goods and services (including debt service), and investment or capital expenditure. This is attributable to the following critical factors. It is important to appreciate the fact that the personnel emoluments portion of the Budget has more than tripled in the last three years, from GH2.5 billion to about GH8 billion this year. This has been mainly due to the Single Spine Salary Scheme (SSSS). We now spend a staggering 60.9 percent of our entire national revenue to pay public sector salaries.
Mr. Speaker, this is almost double the globally accepted prudent level of between 30 to 35 percent. While we remain committed to boosting the morale of public sector workers of Ghana, whose incomes were low compared to their counterparts in the private sector. It is in that spirit that we undertook the salary rationalization with a view to enhancing fairness, productivity and motivation in the public sector. We now face the challenge of ensuring that the effect of the public sector pay reform does not constitute an unsustainable burden on public finances and on macro-economic stability.
Mr. Speaker, the rate of growth of the wage bill has reached a point where they are squeezing out critical investments in the budgetary allocation of goods and services and capital expenditures. Unless we tackle this issue decisively, we may soon reach a point where not much will be left to provide the much-needed roads, bridges, ports, schools, clinics and water infrastructure we need to develop our economy.
This issue is even more significant because as we struggle to settle the wage bill, thousands of public workers continue to make demands for wage increases and threaten work stoppage if we do not meet these demands.
Mr. Speaker, the meat is now down to the bones, and it is time for serious rethinking about the level of wages in relation to our national competiveness and the related productivity issues. It is said “to whom much is given, much is expected.” The people of Ghana demand better service from our public sector employees commensurate to the investment made in their remuneration.
Mr. Speaker, another factor that led to the large deficit was the significant shortfalls in corporate income taxes from the petroleum sector because of low volumes of crude oil exports.
In addition, there were expenditure overruns arising from borrowing to pay off large arrears and major capital projects, notably the roads projects that we now categorize as the “gang of four” later adjusted to six. Happily many of these roads are in advance stage of completion.
Mr. Speaker, we are taking the difficult but necessary measures to address the serious problems of misalignment. The National Petroleum Authority recently announced adjustments in the prices of petroleum products to realign the distortions in the pricing of petroleum products. These distortions had resulted in a situation where Government had to shell out about GH¢150 million to the Bulk Distribution Companies (BDCs) to compensate them for losses sustained in the supply of petroleum products. The net effect was also that because of the wide disparity in price between us and our neighbours, many unscrupulous people found a new occupation in smuggling the products across our borders for sale.
Our primary concern for the poor and vulnerable has necessitated a widening of mitigation measures, such as the introduction of solar lanterns, expansion of life-line threshold on energy for poor households and deepening social protection initiatives to cover a wider net of poor households to cushion them from the effects of these price increases.
On the other hand we are introducing measures to curtail Government’s expenditure on fuel. We would rationalize the use of government vehicles and fuel in the next few weeks. I have given the Chief of Staff appropriate directives on this matter. We will discuss with auto companies a scheme to enable Senior Public servants to buy on hire purchase their own vehicles and curtail the reliance on the use of State vehicles.
Mr. Speaker, we are also taking strict measures to curtail MDAs spending beyond their budgetary allocations and new mechanisms of strict monitoring will be announced by the Minister of Finance in the 2013 budget.
The Ghana Revenue Authority and other agencies have been tasked to help raise tax and non-tax
revenues to levels that benefit our emerging Lower Middle-Income Country status. We will plug
the leakages and raise Ghana’s ratio of revenue to GDP from the current meager 16% to above
20%. Comparative levels with other lower middle income countries are Kenya 24% and Senegal
Mr. Speaker, while we take these difficult measures, our engagement with Development Partners (DPs) through the Consultative Group (CG) process has focused on how to manage the transition to an upper middle-income status in an orderly manner to balance the need for growth with our obligations of reducing poverty and significantly meeting targets set in Millennium Development Goals (MDG5).
THE PRIVATE SECTOR
Mr. Speaker, partnership with the private sector has brought about accelerated growth and development of the economy. Ghana improved from the 92” position in 2009 to the 63 in 2012 on the World Bank’s “Ease of Doing Business Index”.
This progress has to be improved during the transition to Middle-Income status and we are in the process of transforming the Ghana Investment Promotion Centre (GIPC) to meet the challenges of the 2i’ Century Investor.
Mr. Speaker, the government has taken a decisive step to locate private sector coordination under the Office of the President, and designated a Minister of State in the Presidency to coordinate and supervise Private-sector initiatives. In this effort, government will play a facilitative role for private sector development.
I have already inaugurated the Private Sector Advisory Council under my chairmanship, and decisive steps are underway to deepen the implementation of the Private Sector Development Strategy (PSDS) U, covering all major aspects of private sector development.
We will use Government’s significant procurement power to benefit the Ghanaian Private Sector. As a policy, I am requesting public officials to give priority to the Ghanaian private sector in goods and services where they are competitive in value, quality and delivery.
ACCELERATING AGRICULTURAL MODERNIZATION FOR JOB-CREATION
Mr. Speaker, all of our accelerated development efforts have been geared towards giving special advantage to accelerated agricultural and aquaculture development through Modernization.
The process of modernization, involving the use of improved seed varieties, greater access to tractor services and training of peasant and small holder farmers on productivity enhancements, has resulted in dramatic increases in maize, rice and cassava production in the last four years.
These will be expanded with an additional 2,000 tractors, improved seed support and fertilizer subsidies, especially for the poorest farmers.
Total land under irrigation throughout the country will be substantially increased as a result of new initiatives on the Accra Plains and the Savannah zone, under a new World Bank facility on commercial agriculture development. This will allow for all year round farming and will enhance Ghana’s food security.
Hydroelectric power and irrigation development will receive further boost in the Sissilli-Kulpawn project and the Pwalugu Multi-purpose dam in the Upper East region. These two projects are expected to bring some 80,000 hectares of land under irrigation in the Northern belt.
A more coherent focus on fisheries and aquaculture development has been initiated, with the designation of a new Ministry for Fisheries and Aquaculture Development and the imminent establishment of a college of Fisheries planned for Anomabo as a department of the University of Cape Coast.
Mr. speaker, our focus is to work towards achieving sustainable production of the historic one million tonnes of cocoa. The key measures we have Identified to accomplish this are the continued payment of at least 70% of the world market price of cocoa to farmers, the distribution of 20 million hybrid cocoa seedlings free of charge over the next several years. Additionally we will also pursue the continued application of the hi-tech system to increase yield per hectare. We are also reviewing the current distribution system of subsidized inputs to ensure that these reach the farmers directly.
We will marshal the collective effort of all stakeholders to facilitate the emergence and growth of a strong manufacturing sector:
. By reviewing the tax structure to reduce taxes paid by Ghanaian manufacturers to increase their competitiveness in the national and world market.
2. Facilitate the establishment of an industrial development fund to provide a ready resource envelope for ailing and struggling manufacturing industries in Ghana.
3. Provide service plots within dedicated industrial zones to be developed in Sekondi Takoradi, Tema, Kumasi and Tamale to support the local manufacturing companies to add value to local products for a strong and viable domestic manufacturing sector.
Mr. Speaker, work is ongoing on a $1.2 billion ammonia-urea based fertilizer processing plant with an annual capacity of one million tons in Nyankrom in the Shama District of the Western Region. This is an initiative between the Ghana and Indian Governments with a potential for boosting trade, jobs creation, and increased agricultural productivity.
TOURISM, CULTURE AND CREATIVE ARTS
Mr. Speaker, our government is committed to using Tourism as an instrument for the full realization of the economic potential of our culture and creative arts. In this respect:
• The newly aligned Ministry of Tourism, Culture and the Creative Arts will facilitate the interface between government, implementing bodies in tourism, culture and the creative industries as well as international and civil society partners.
• The National Commission on Culture is being restructured as the government’s lead Implementing and advisory body on Culture and Creative Arts; and the Ghana Tourism Authority will be similarly transformed.
• Government will allocate funds to the sector and mainstream the creative arts industry as an integral part of the Ghanaian private sector.
PILLAR THREE: EXPANDING INFRASTRUCTURE
Mr. Speaker, all Ghanaians deserve to live in a country with improved infrastructure, which is inextricably linked to enhancing the quality of life.
The viability of private sector investments hinges on a robust and functional infrastructure of roads, rail, sufficient and efficient energy, stable water supply and a seamless communications and ICT infrastructure.
Mr. Speaker, government will use information technology to support infrastructure development, urban renewal, land use management and environmental protection.
Mr. Speaker, Ghana was listed by the International Telecommunication Union (ITU) as one of the top ten most dynamic performing countries in ICT-for-development in 2011. Indeed, telephone subscription in Ghana reached close to 26million as of December 2012, representing more than double the number as of December 2008.
Government will continue with the positive outlook and promote the rapid development of broadband infrastructure to reach all parts of the country to ensure that the improved connectivity provides better access to health care and health information, opportunities for education and training, transportation, protection of environment and management of natural resources, and to support E-govt to create transparency in government.
In pursuit of this, the work on the Eastern Corridor Rural Fibre Optic backbone network project will be accelerated to add 584 kilometres of optic fibre stretching from Ho to Bawku and linking 70 towns enroute to improve the quality of communications services.
With the ICT sector expanding at such a rapid rate, attention will be focused on measures to protect the privacy of the individual and personal data. We will also develop strategies to counter the growing threats of cyber attacks and other online security concerns and accelerate preparations towards migration from Analogue to Digital Television Transmission. The Better Ghana CT Project will be given a major boost this year. We shall commence the distribution of Four Hundred Thousand (400,000) laptop computers to schools and students.
I have clear plans for the roads and transport sector, which we will start implementing this year.
These include the introduction of public-private partnership models on commercially viable
routes along the Western, Eastern and Central Corridor roads.
Work is soon commencing on the Northern segment of the Eastern Corridor road, stretching from Oti Damanko to Nakpanduri.
This year we expect to bring to a significant point of completion many of the ongoing road
projects including the Kpando- Worawora- Dambai, Asankragwa- Enchi, Navrongo- Tumu and the
Achimota-Ofankor, Madina-Pantang, Nsawam-Suhum-Apedwa, La-Teshie, Dansoman and the
Others are the Sefwi Bekwai-Eshiem-Asankragwa, Bomfa Junction-Asiwa-Bekwai, Tetteh Quarshie-Madina and the Berekum-Sampa roads.
We will embark on a regional roads improvement programme that will see significant upgrades in critical road infrastructure in the major agricultural regions and here I make special mention of the Western Region.
Our trunk roads development programmes are also progressing steadily across the country. COCOBOD is funding the reshaping, spot improvements and upgrading of gravel roads to bituminous surfaces in cocoa, coffee and sheanut producing areas.
To be Continued
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