The Minister of Finance, Mr Seth Emmanuel Terkper, has asked Ghanaians to focus on the positive developments ongoing in the country, instead of harping on the challenges.
He said without the acknowledgement of positive developments concerning the Ghanaian economy, the perception and confidence out there would continue to be gloomy, lamenting that in spite of the many positive developments happening in the country, there was still a negative view of the performance of the economy, both externally and internally.
Mr Terkper, who was the guest speaker at a breakfast meeting jointly organised by Graphic Business and the Fidelity Bank on the Ghanaian economy yesterday, said, “It is not just the narrative at home which is not recognising some of the changes that are occurring, but we have to begin to acknowledge that there is some change.”
The meeting was on the theme: “The Economy and Prospects for Business Confidence”, and was attended by captains of industry.
Mr Terkper listed some of the positives as the ability of the government to stay within fiscal targets which produced a very encouraging outcome in the first quarter of the year. Total revenue was also 11 per cent above the target in the first quarter of 2015, while expenditure came in five per cent less than projected. Moreover, spending on wages and salaries were contained, although capital spending rose well above initial projections.
He also said in only two weeks Ghana had received a clean bill of health from the International Monetary Fund (IMF) in its first review of the Ghanaian economy, enjoyed the disbursement of grants by the European Union (EU) and other development partners, stood to benefit from a policy-based guarantee from the World Bank that would enable the extension of the tenure of Ghana’s loans beyond 10 years and a guarantee for the Sankofa gas field that is set to be approved.
He explained that while Ghana was not alone in the challenges experienced by its economy, the challenges were due to external shocks such as the decline in commodity prices such as gold, cocoa and crude oil in 2012, coupled with the fact that oil production had reduced from 90,000 to 73,000 barrels daily. That resulted in a huge gap in revenue, in addition to the lack of grants, he added.
“When we look at the economy, we should not look at it only on account of non-performance of Ghanaian managers, including politicians. We should look at it in the context of major shocks that we went through in the last two years when we launched the recovery,” he said. Internally, he said, Ghana was experiencing a shortfall in energy supply because demand had outstripped supply from 2012 to 2013, although access had increased to 72 per cent, adding that Ghana was only second to South Africa in access to electricity in sub-Saharan Africa.
According to Mr Terkper, in the past such shocks would have crippled the economy, “but these difficulties which in the past would have taken us to negative growth have kept us above positive growth”. He also stated that dismal growth figures such as 3.5 and four per cent would not be the same now, since the base of the GDP had increased. “Since 1985 when the Structural Adjustment Programme (SAP) was consolidated, Ghana has never had negative growth, in spite of everything,” he said.
Mr Terkper continued that when Ghana adopted the home-grown policies to withstand the external shocks, it was able to migrate all public servants onto a uniform salary scale through the Single Spine Salary Structure (SSSS). He, however, asked that care must be exercised in wage negotiations for civil servants, “else they take so much of the public purse and we have less money for other things or we borrow excessively for those other things, which is not the way forward for a nation like Ghana”.
Touching on the ongoing dialogue on salaries, he cautioned that the Civil Service must not be dismembered and that “if we don’t hold the various fiscals together, these services will tear the budget apart again”. He said GH₵3 billion had been paid out of GH₵18 billion from the Ghana Revenue Authority (GRA) in single spine arrears alone, with an additional GH₵8 billion in budget overruns attributed to compensation.
At the end of 2014, most arrears and overruns that the government hitherto had not been able to pay were all cleared through the home-grown policy, he noted. Loans servicing Moving to the servicing of loans, Mr Terkper said the perception that all loans that were being serviced currently were contracted by the current government was wrong, since some were contracted by previous governments and stretched for many years.
He stated that it was not all loans that were part of the public debt, except those for schools, hospitals and clinics, lamenting that even though the bills paid by patients could be used to maintain the facilities, many of the institutions that had huge internally generated funds still went back to the government for financing.
He stated that 30 per cent of the debts was used to support commercial projects such as water, power systems, roads, among others, “for which those institutions should have borrowed on their own balance sheets”.