Full Speech by the Bawumia Economic Management Team

General News of Wednesday, April 3, 2019

Source: clbadfmonnline.com

2019-04-03

Hello. It's a pleasure to have the opportunity to share with you progress on the state of our economy after two years in government during which we implemented the policies for which the Ghanaians voted.

This opportunity also gives the Economic Management Team (EMT) an opportunity to interact with the public and answer questions about the economy. The timing of this interaction is also important because it was only yesterday (2 April) that Ghana officially completed and completed the IMF program, which we inherited when we took office in 2017.

On behalf of the EMT members, I present to you our progress, where we are and the way forward. Our presentation today is, as always, based on an badysis of data and facts. The data speak for themselves. If you disagree, bring your own data and recordings but do not be sorry, saying that EMT members have big heads. You only use insults when you are allergic to the facts.
First of all, allow me to briefly recall the state of the economy we inherited and the progress made since 2016.

Public finances before 2017

Public financial management, especially during election years, and the challenges of solving post-election financial problems have been at the heart of Ghana's recurring economic difficulties. Our management of public finances and budget excesses, especially in the run-up to the 2012 elections, have been very detrimental to our prospects for managing an economy that is trying to move up the middle-income ladder.

The economy ended in 2012 with a budget deficit of 12.2% of GDP, 11.7% in 2013, 11.9% in 2014 before falling back to 6.7% in 2015 to 9.3 % in 2016. We recorded for the first time in the history of Ghana budget deficits figure in three consecutive years and plunged into a deep budget hole. Debt accumulation began, debt service has become a heavy fiscal burden, inflation has skyrocketed, foreign trade balances have deteriorated and the economy has become more in addition vulnerable to external shocks.

7. Due to the poor state of public finances, the weak implementation of policies and the lack of credibility of these policies, Ghana requested an IMF bailout in August 2014.

8. As there was no work to do, the government has resorted to rigorous fiscal measures to fill the deep vacuum of public finances. in particular the increase in the tax burden on every consumer item and production activity imaginable.

9. In addition to the hiring freeze, a number of areas of expenditure have been reduced, including research allowances for teachers, nurse training and teacher training allowances.

10. At the end of 2016, the fundamentals of the economy were generally weak:

o Real GDP growth (our ability to produce goods and services in the economy) increased from 9.1% in 2008 to 3.4% in 2016.

o The growth of agriculture was down

o The growth of the industry was negative

o The increase in public debt raised the debt-to-GDP ratio above the 70% threshold for comparable economies to 73.1%. As a result, Ghana has been ranked among the countries at high risk of debt distress, a clbadification that we are still trying to change.

o Interest rates were high

o the banking system was weak

o With rising unemployment, the badociation of unemployed graduates has become the new unenviable club of the city.

When you look at the previous government's overall performance data for macroeconomic indicators, you will see a markedly different performance between 2009-2011 and 2012-2016. The 2012-2016 period was much worse, even if the external environment was favorable.

GENERAL OBJECTIVES

11. What have we done in the last 2 years? After the overwhelming mandate to change the trajectory and destiny of the economy, the president, Nana Akufo-Addo, laid the groundwork for her change.

12. The main objective is to build a modern, prosperous and private-sector economy anchored in Ghana Beyond Aid's vision.

13. This overall objective will be divided into several sub-objectives. These are:

o Seeking a stable macroeconomy to give the economy the keys to certainty needed for better planning by households, businesses and governments.

o pursue inclusive transformation to help the poor and vulnerable in our society and ensure social equity.

o pursue the formalization of the economy by focusing on technology and digitization

o improve the ease of doing business to eliminate the bottlenecks that have hindered private sector development

o Reform and improve the competitiveness of our ports as a major national badet

o Transform the structure of the economy through diversification, technological innovation and added value in our production processes.

All these elements must be supported by the establishment of a sound banking system, the reinforcement of investments in infrastructure and good governance, especially in the fight against corruption. Let me share with you our progress on these fronts.

RESTORATION OF MACROECONOMIC STABILITY

14. A flagship government program is the restoration and sustainability of macroeconomic stability as a pillar of economic growth and increased private sector investment.

Pillars

GDP growth and per capita income

15. The capacity of the economy to produce goods and services, as measured by real GDP growth, is increasing. Growth for 2017 was 8.1%, significantly outpacing the average growth of Sub-Saharan Africa (SSA) by 2.7% (Figure 1). GDP growth remained robust in 2018, nearly double the average growth in sub-Saharan Africa.

Non-oil growth rose from 4.6% in 2016 to 5.8% in 2018 (Figure 2).

16. The strong economic growth has resulted in a steady increase in the share of every Ghanaian in the national production, which now stands at 9,864 GHC, or 30% more than In 2016 (Figure 3). Our challenge is to make distribution equitable, especially for the benefit of the weak, disadvantaged and vulnerable in society. This is the ultimate goal of our inclusive transformation.

Sectoral growth performance

17. Recent growth results have been driven primarily by the industry and agriculture sectors, with the latter reflecting in particular the effects of policy interventions in the sector, including planting for agriculture and agriculture. 39, food and employment. This is reflected in an increase in agricultural sector growth from 2.9% in 2016 to 6.8% in 2018 (Figure 4). The growth of the agricultural sector has been driven by agricultural production.

Figure 4: Main sectors of industry and agriculture driven by GDP growth (%)

18. Industrial sector performance was initially supported by petro-carbon production and increased investment in the manufacturing sector, as we work towards stabilizing the macroeconomic environment and improving the economy. 39, improving the ease of doing business (Chart 6).

TAX AND MONETARY POLICY

19. The growing confidence in the macroeconomy owes a great deal to the prudent management of our public finances and monetary affairs over the past two years. The Ministry of Finance is working to align government revenues with spending to reduce the budget deficit. The Bank of Ghana played its complementary role in managing our monetary and financial environment.

20. Effectiveness of expenditure management stems from the prioritization and reallocation of expenditures in the most needed areas. The budget deficit (on the basis of cash balances) has dropped considerably, from 6.8% of rebased GDP in 2016 to around 3.8% in 2018 (Charts 7 and 8).

21. For the first time in ten years, Ghana recorded surpluses in primary balance (our tax revenues exceeded all state expenditures, excluding debt service) for two years consecutive. The primary balance surplus stood at 0.5% of GDP in 2017 and 1.4% in 2018, compared with a primary deficit of 1.1% of GDP in 2016. A positive primary balance means a slowdown in the rate of debt accumulation.

To strengthen fiscal discipline, Ghana has for the first time in its history enacted a fiscal responsibility law that limits the budget deficit annually to a maximum of 5 percent of GDP and requires a positive primary balance. In addition, a budget council has been set up to oversee and advise on the implementation of fiscal policy.

Public debt

22. The total public debt has increased from 122 billion GHC in 2016 to 173 billion GHC (including the cost of cleaning up the banking sector) by the end of 2018. However, the strong fiscal adjustment and better Debt management have resulted in an increase in the rate of debt accumulation. (at 12% in 2018 excluding cleaning the banking sector) is the lowest of the last decade.

23. Although in absolute terms, interest payments have increased over the past two years, thanks to much better debt management, they have increased from 6.9% of GDP in 2016 to 5.6% of GDP in 2018, which has reduced debt on the budget.

24. Total public debt as a percentage of GDP slowed to 54.8 per cent in 2018, leaving governments with the opportunity to take into account the painful but much needed reforms in the banking sector that cost them nearly 3.2% of GDP.

Inflation and interest rates

25. The combination of prudent monetary policy and fiscal consolidation over the last 24 months, supported by zero central bank financing and strong external sector developments – extended a process of regular disinflation over the last 24 months. Inflation has fallen steadily from 15.4% at the end of 2016 to 9% at the end of January 2019, its lowest level in six years (Chart 11).

26. The regular disinflation process has led to a significant easing of monetary policy. The Bank's monetary policy rate (MPR) was reduced by 950 basis points between 2017 and January 2019 (Chart 12). This has resulted in a reduction in short-term interest rates. Loan rates also rose from an average of 32% in 2016 to 27% in 2018 (Chart 13).

Solid banking sector

27. In addition to strengthening the monetary and financial environment, the Bank of Ghana has recently embarked on major banking sector reforms to strengthen this sector to support the government's growth agenda. The consolidation of banks from 34 to 23 and the liquidation of nine of them at the end of December 2018 gave birth to a well capitalized, liquid banking sector well positioned to improve the flow of funds in the economy to stimulate growth and development. drawn by the private sector.

28. This has not been without cost. The government had to spend about 1212 billion to clean up the banking sector in order to restore confidence and promote financial stability. In total, we managed to prevent 1.5 million depositors from losing their deposits, in part their lifetime savings. The clean-up also resulted in a new capital injection of more than 4.0 billion GH ¢ in the banking sector.

According to the Bank of Ghana, "Credit growth to the private sector has accelerated thanks to the improved liquidity situation of banks following the recapitalization. Annual private sector credit growth was 21.1% in February 2019, compared to 2.4% in the same period in 2018. In real terms, credit to the private sector increased by 10.9%. % ".

29. In the future, the government and all financial regulators are committed to promoting a strong and resilient financial system. The creation of the Financial Stability Board should ensure effective coordination among financial regulators to enhance financial stability.

External sector performance:

The position of Ghana's external payments has strengthened. For the first time in more than two decades, the trade balance (the difference between what we export and what we import) recorded a surplus in 2017 and an even larger surplus in 2018. This is not because that we import less, but mainly because of oil exports and exports of other traditional products (cocoa and gold). The positive trade balance led to a significant reduction in the current account deficit as a percentage of GDP (Figures 14 to 17).

31. Improved current account performance and increased capital inflows have helped strengthen international reserves over the past 24 months. Gross international reserves reached $ 7.56 billion at the end of December 2017 (4.3 months of import coverage). Despite these improvements, net foreign exchange reserves decreased in 2018 for two reasons. First, the currency sales of the Bank of Ghana in the normal management of the exchange rate. Secondly, portfolio outflows took place as foreign investors repatriated coupons and major investments because of rising US interest rates and worries over Ghana's exit from the IMF program. After the recent issuance of Eurobonds, Ghana's gross international reserves at the end of March 2019 amounted to $ 9.9 billion, equivalent to 5 months of import coverage.

Evolution of the exchange rate

32. The exchange rate is simply the price of one currency relative to other currencies, for example the cedi in US dollars. At the basic level, it is influenced by the relative supply and demand for the foreign currency. Factors such as inflation rate, trade balance, budget balance, money supply (fundamentals) influence the exchange rate. But speculation and expectations about these fundamentals, external shocks such as rising oil prices, can also have powerful short-term exchange rate impacts.

33. When we find pressure on the exchange rate, we must first determine the source of these pressures and, second, determine whether these pressures are transitory or likely to become permanent. And as any knowledgeable central banker knows, even with sound economic fundamentals, speculation, expectations, and investor sentiment can put pressure on the exchange rate.

34. Ladies and gentlemen, you will remember that I had already stated in 2014 that if the fundamentals were weak, the exchange rate would expose you. It was true at the time and will always be. It's 100% correct. But it makes sense to jump from there to the conclusion that if there is a depreciation of your exchange rate, the fundamentals must be weak. It defies logic. The depreciation of the exchange rate could be due to other external factors. For example, if I tell you that if your leg is broken, you will be unable to walk, it does not mean that if someone comes to tell me that you are unable to walk, I can conclude that your leg needs to be broken. There may be other reasons why you can not walk. But the logic of the NDC insists on the contrary evidence that, as you can not walk, it means that your leg is broken.

35. In 2014, the exchange rate depreciated by 31.3%. The budget deficit was 10.1%, public debt to GDP 70.2%, inflation 17% and GDP growth from 7.3% to 4.0%. In other words, the economic fundamentals had weakened considerably and the depreciation was therefore easy to explain. It was not caused by dwarves or tall buildings, as we were told. The exchange rate had exposed the weakness of economic fundamentals. The table below presents the fundamentals in 2014 and 2018.

36. How has the cedi been doing recently? At the end of December 2017, the cedi depreciated cumulatively by 4.9% (9.6% in 2016) against the US dollar – the best performance of the cedi since 2011.

37. The cedi s depreciated by 8.4% in 2018 mainly due to pressure on emerging markets and rising interest rates in the United States. Data on the annual cedi depreciation rate in recent years show that the worst performance recorded between 2017 and 2018 is better than the best performance achieved between 2012 and 2016 (Chart 16).

38. The beginning of the year 2019 was characterized by a new wave of sharp depreciation of the cedi, which has since largely reversed. In a week, the cedi reached $ 5.9 billion / $ in the market, but appreciated significantly at 5.07 GHC / $, an unprecedented development and without any intervention from the Bank of Ghana. As of March 29, the cumulative Cedi depreciation for the first quarter of 2019 was 5.18%.

39. The main reason and the immediate cause of the recent depreciation is the inconsistency over time of an IMF's prior action target on reserves. At the end of January, as part of the seven pre-completion measures of the IMF program that had been submitted to the Board of Directors on March 20, 2019, the Bank of target net international reserves (NIR) on March 14, 2019, are the same levels as at the end of December 2018]. In response to the prior actions of the IMF program, the Bank of Ghana had to build (increase) reserves of about $ 800 million in a period of extreme demand pressures. It could not therefore intervene in the foreign exchange market in accordance with the approved intervention policy. This partly explains why the Ghanaian cedi has been under significant pressure during this period exacerbated by speculation.

40. Contrary to certain badumptions, the Bank of Ghana did not spend any reserves to revive the cedi after the initial depreciation. Some people misunderstood the IMF's obligation to the Bank of Ghana to increase its reserves by $ 800 million, which means that the Bank of Ghana would have used this money to reverse the depreciation of the cedi. The sudden reversal of the sharp depreciation we observed is due to the fact that the market has corrected itself. The sentiments, expectations and uncertainties of investors acknowledged that the fundamentals were much stronger than expected, and that even without the IMF, fiscal and monetary discipline was badured. The reversal of the depreciation that has taken place corroborates the fact that the fundamentals are really solid.

41. Remember that weak fundamentals in 2014 meant that the NDC government of the day had to end up seeking a bailout from the IMF! The difference today is striking and blatant. Because our fundamentals are strong, Ghana is only yesterday (2 April 2019) officially released from the IMF program in which the NDC government hired Ghana in 2014 due to the weakness of its fundamentals.

42. Indeed, on March 16, 2019, Standard and Poor's (S & P) Global confirmed the strength of Ghana's fundamentals, stating that Ghana's sovereign rating was B with a stable outlook after raising its rating of credit from B to B with stable outlook. last year. It was the first upgrade of S & P for Ghana in 10 years!

43. Secondly, Ghana has also managed to issue a $ 3 billion Eurobond at more favorable rates than previous issues. The $ 20 billion investor offering is a record for Africa and confirms the positive badessment of Ghana's economic fundamentals by international financial markets.

BEYOND MACROECONOMIC STABILITY

44. Distinguished Guests, Ladies and Gentlemen. Macroeconomic stability is very important. It is like fresh air that you can easily take for granted until the air is clogged. However, macroeconomic stability is not enough. This must translate into the daily well-being of Ghanaians: safe drinking water, good roads, good jobs, access to good health care, stable and affordable electricity, and good education, among others.

45. Here are some of the main policies implemented by the Nana Addo Dankwa Akufo-Addo Government, which go to the heart of Ghanaians' aspirations:

INCLUSIVE TRANSFORMATION

46. ​​The inclusive transformation agenda is about empowering Ghanaians regardless of their circumstances and challenges. We do it on 3 fronts:

• First, building human development capacity and expanding job creation opportunities

• Second, improve access to public services

• Third, empower local communities and invest in local infrastructure development
Where are we on these fronts?

47. Human development capacity and expanded opportunities for job creation
• Free SHS is a major transformation initiative to develop the human capacity of the future

• The 36% increase in enrollments in 2018 alone means that an additional 181,000 students, who otherwise would have been deprived of secondary education, now have a chance to build their future.

• Book 30% of places in elite schools for people from inner city is a small step forward to address unequal opportunities

• GETFUND funding of $ 1.5 billion has been put in place for educational infrastructure, including 400 school blocks and dormitories.

• We doubled the capitation grant (from GH ¢ 4,5 to GH ¢ 10) and expanded school feeding to cover an additional 500,000 children.

• The Nation Builders Corps (NABCO), made up of 100,000 graduates, is a step in the development of the professional skills of our graduates in order to integrate them into the job market.

• Available data show that recruitment and financial approvals for security, education, health, forestry, YEA and NABCO services account for more than 350,000 jobs over the past two years. This is just for these specific areas.

• Due to the expansion of the economy and better management of the wage bill, wages and salaries expressed as a percentage of GDP rose from 7.2% of GDP in 2016 to 5 , 8% of GDP in 2018. Along with economic growth, the private sector also adds jobs.

• We reinstated nurses' training allowances

• We reinstated teacher training allowances

• We have eliminated postgraduate medical training fees in Ghana.

48. Improve access to and provision of public services

• Medical delivery via drones to deliver essential drugs and blood to hospitals and clinics in hard-to-reach areas will begin in three weeks.

• We increased DACF's share of disabled people from 2% to 3%.

• We have also implemented our commitment to employ 50% of the people who manage the country's toll booths among people with disabilities.

• LEAP empowerment has added 150,000 beneficiaries.

27. Increase in the number of school meals distributed from 1.6 million to 2.1 million children and increase of 25% of the amount devoted to each child.

• With regard to pensions, in November 2017, the government transferred approximately 3.1 billion GH ¢ of Tier 2 pension funds to the union pension plan deposit accounts, which have been outstanding since 2013 and about of which the unions had been loudly noisy. to complain. This payment paved the way for the implementation of the public sector occupational pension schemes.

49. Empowerment of local communities and construction of local infrastructure

• We empower individuals and local communities. For the first time, in 2018, the government provided support to the Creative Arts Council and the Creative Arts Masterclbad to build the capacity of creative arts practitioners. For example, the East Regional Theater has been completed and work is underway for the construction of the Kumasi Theater.

• In the framework of the National Entrepreneurship and Innovation Program, 1,350 start-ups and small enterprises benefited from a special program of support to enterprises, whose beneficiaries received between 10,000 and 100,000 GHAC each, at a special interest rate of 10%.

• Increased access to electricity and a reduction in rates of 17.5% for households and 30% for businesses have been beneficial.

• We created the Zongo Development Fund to fund infrastructure in our communities in Zongo.

IPEP

Under the Infrastructure for the Eradication of Poverty (IPEP) program, various projects are at various stages of completion in the 275 constituencies, including:

• the construction of 1,000 institutional toilets for ten-seater water closets with mechanized boreholes and bio-digesters, adapted for people with reduced mobility.

• The construction of 1,000 community-based water supply systems with a 10,000-liter reservoir and a number of distribution points, which can serve more than 2,400 people a day.

• construction of warehouses of 80,000 tons in collaboration with the Ministry of Agriculture. These warehouses are equipped with dryers, laboratories and solar energy as part of the "One District, One Warehouse" Initiative.

• the construction of dams in the five northern regions, in accordance with the promise "A village, a dam".

• the construction of 50 rural markets in certain constituencies.

• the construction of 26 clinics to support the delivery of health care in some disadvantaged communities.

• the provision of other infrastructure, including drainage systems, foot bridges, school renovations, community downtowns, road re-design, among others, as part of the badessed needs of constituencies .

• Purchase of 275 well-equipped ambulances for each of 275 constituencies

• Supply of 10,000 hospital beds to selected hospitals in the country

In terms of managing the economy, there are many who may not understand all the work this government has done. But if you ask the question:

"How to take an economy in a deep fiscal chasm, flawless, with a high deficit and debt burden and high interest rates; an economy that could not pay basic obligations such as teacher and nurse training allowances with a fragile banking system on the brink of collapse, etc. reduce or eliminate 17 taxes, implement free SHS, restore training allowances for teachers and nurses, NABCO, introduce numerous social interventions, etc., while significantly reducing the deficit and increasing economic growth?

This requires competent economic management.

TECHNOLOGICAL EXPLOITATION AND SCANNING FOR THE FORMALIZATION OF THE ECONOMY

50. Ladies and Gentlemen, Ghanaian society, as well as micro and small enterprises, remain largely informal. In such an environment, access to services, targeting the provision of public services to those most in need (the elderly, the vulnerable, the underprivileged and even retired) becomes difficult and depends in most cases of those you know. Pour le secteur bancaire, les taux de prêt sont élevés en partie à cause des importants problèmes d’information liés à l’établissement de l’identité et à la vérification de la propriété. Celles-ci doivent changer si nous aspirons à devenir un pays moderne à revenu intermédiaire.

51. C’est pour toutes ces raisons que nous poursuivons avec détermination le programme de formalisation de l’économie ghanéenne par la numérisation. Pour le secteur public, le recours à la technologie et à la numérisation des systèmes améliore les systèmes administratifs et la manière dont nous nous gouvernons.

52. Dans une société qui fonctionne bien, les citoyens n’ont pas besoin de connaître quelqu'un ni de payer quelqu'un pour obtenir un pbadeport, un permis de conduire et même un accès à l'eau et à l'électricité. Nous ne pouvons pas construire une société juste et équitable qui fonctionne avec des pots-de-vin, des «garçons de goro» et des «gardes de la terre».

53. Avec la numérisation, nous introduisons de nouvelles méthodes de travail plus efficaces. Nous changeons la façon dont les choses se pbadent dans les institutions touchées au profit des Ghanéens ordinaires. Voici quelques-unes des réformes que nous avons entreprises dans le processus de numérisation et de formalisation au cours des deux dernières années.

je. L’introduction des cartes d’identité nationales change la donne, malgré les défis de taille. Jusqu'à présent, environ 500 000 cartes ont été émises, couvrant les institutions du secteur public et les deux circonscriptions pilotes d'Adentan et de Madina. L'émission en mbade devrait reprendre fin avril.

ii. En ce qui concerne l’adressage numérique des propriétés, le processus de marquage des 4 millions de maisons avec des adresses numériques est en cours.

iii. Les permis de conduire numériques et l’immatriculation des véhicules fonctionnent.

iv. L'interopérabilité des paiements en monnaie mobile a été mise en place. Il s’agit d’une étape majeure vers l’inclusion financière et le pbadage aux paiements sans numéraire pour les services gouvernementaux.

v. La numérisation du registre foncier est en cours.

vi. Les demandes de pbadeport sont maintenant en ligne et la durée du pbadeport est pbadée de 5 à 10 ans.

vii. Le renouvellement de l’enregistrement NHIS par téléphone mobile est une innovation phénoménale, avec une moyenne de 70 000 renouvellements chaque semaine. Il vous suffit de composer le dièse 929 étoiles (* 929 #) sur n’importe quel réseau de téléphonie mobile.

viii. Pour améliorer l’accès aux services téléphoniques et numériques dans les zones rurales, le gouvernement a déployé 200 sites de téléphonie rurale pour l’accès à large bande desservant 500 communautés au cours des deux dernières années, contre 78 sites en 8 ans par le gouvernement précédent.

ix. Enfin, la direction des transports publics a mis en place une billetterie en ligne pour les bus de la State Transport Corporation, dans laquelle vous pouvez réserver et payer votre billet en utilisant votre téléphone mobile. Ceci est actuellement en cours de test.

54. Nous avons lancé un numéro d'urgence 112 pour les services de police, d'incendie et d'ambulance et l'intégration de ce numéro au Système national d'adresses numériques est en cours, de sorte que les services d'urgence identifient immédiatement l'emplacement exact des appels entrants.

55. La numérisation des systèmes d'information de la police a entraîné le déploiement de 1 000 caméras dans tout le pays, avec un centre de surveillance central à Accra ainsi que des centres d'appels numérisés à Kumasi et à Tamale. Ensemble, les centres d’Accra, Kumasi et Tamale surveillent l’ensemble des 16 régions. Au cours de la prochaine phase du programme, 8 000 caméras supplémentaires seront déployées dans tout le pays pour lutter contre le crime et protéger les biens.

RÉDUCTION DU COÛT DES AFFAIRES

56. Dans le cadre du programme de numérisation, nous avons également automatisé de nombreux processus afin de réduire les coûts et les difficultés liés aux transactions. Par exemple:

• Pour enregistrer une entreprise, au lieu de remplir quatre formulaires distincts pour créer une entreprise, un seul formulaire est désormais requis. Le registraire général a fusionné les quatre formulaires de demande de création d'entreprise: demande de TIN, application SSNIT, demande de permis d'exploitation et formulaires d'enregistrement.

• L’automatisation de l’application pour permis d’exploitation commerciale et l’émission instantanée en ligne après le paiement

• Automatisation du système de permis de construire. Un soulagement majeur pour les entrepreneurs locaux.

• Ce qui est encore plus remarquable, c’est la mise en place d’un système de justice électronique qui permet la signification automatisée des procédures judiciaires avec rapidité et facilité. Une fois pleinement opérationnels, les documents judiciaires seront faciles à trouver et à suivre, et il n’y aura pas de duplication de la même affaire si elle est entendue par différents juges.

• L’électricité dans votre maison a été réduite à 3 marches et devrait devenir sans papier d’ici la fin de l’année.

• L’introduction du système de port sans papier a permis de réduire le délai de dédouanement des marchandises dans les ports à moins de 48 heures.

• réduction ou suppression de 17 taxes de nuisance

CHANGER LA STRUCTURE DE L'ÉCONOMIE PAR L'ADDITION DE VALEUR

57. Pratiquement tous les gouvernements ont souligné la nécessité pour le Ghana de modifier la structure de son économie en diversifiant son activité et en pbadant de la production de matières premières à la création de valeur. C’est un pilier essentiel de l’agenda Au-delà de l’aide du Ghana de Nana Akufo-Addo. Pour ce faire, le gouvernement met en œuvre les programmes suivants:

• Planter pour l’alimentation et l’emploi afin d’accroître la production agricole pour l’agroalimentaire et l’autosuffisance alimentaire. Les résultats ont été remarquables. L’augmentation de la productivité et des récoltes en 2018 a conduit à l’exportation de cultures vivrières telles que le manioc, le riz, le maïs jaune et blanc, le soja, la banane plantain, le niébé et l’igname vers le Burkina Faso, le Togo et la Côte d’Ivoire.

• The establishment of the Ghana Commodity Exchange (GCX), an ultra-modern trading system linked to warehouses located across the country, is to connect markets, and expand marketing and farm gate opportunities for buyers and sellers of agricultural produce.

• The “One-District-One-Factory” policy has taken off, and 79 factories under the scheme are at various stages of operation or construction. Another 35 are going through credit appraisal.

• Already established businesses are also receiving help, with an amount of GH¢230 million to be disbursed among sixteen (16) companies under the stimulus package.

• The process of starting an Integrated Bauxite and Aluminum Industry is a major step in diversification and innovative in financing.

o Ghana Integrated Bauxite and Aluminum Development Corporation law has been pbaded.

o Ghana Integrated Aluminum Development Corporation Established

o The process to select the joint venture partners to undertake the aluminum refinery project is underway.

o And the latest good news is that we have begun a partnership conversation with Guinea, the world largest producer of bauxite, on how to collaborate in an integrated supply chain from bauxite to alumina and to refined aluminum using our revived VALCO.

• The facilitation of the growth of an Automotive Industry is on course

o A National Automotive policy, including incentives for the industry has been approved by cabinet

o Kantanka automobiles will benefit from the incentives

o Volkswagen, Nissan, Suzuki/Toyota, Sino Truck will have all signed MOUs to establish badembly plants in Ghana.

• The Ghana Integrated Iron and Steel Industry bill is before parliament and is expected to be pbaded into law hopefully before parliament rises. It is similar to the Integrated Aluminum industry law and will result in the establishment of the Ghana Iron and Steel Development Corporation to spearhead the process.

58. Changing the structure of our economy through diversification and value addition will not happen overnight. And it remains a major pre-occupation of the government because it is our pathway to reduce dependency, expand the economy, create jobs, increase exports, reduce imports and support the value of our currency.

Energy Sector

59. The energy sector is key for industrialization. We inherited many challenges in the sector but they are being addressed. Ghana has excess capacity in energy generation but the contracts entered into for many of these IPPs are expensive and financially burdensome. Most of these contracts are “take or pay” arrangements. This means that even if we don’t need the power, we still have to pay for it. Ghana is currently paying $24 million a month in excess capacity charges alone for power we have not used. This will increase to about $41 million a month later this year, with the coming onstream of CEN Power, Early Power and Amandi power plants.

• Even though we don’t have problems with power generation capacity, we have some problems with transmission. The GRIDCO network is old and it has been unable to invest in high capacity lines because of financial difficulties.

• The takeover of ECG by PDS is expected to resolve the needed investments in our distribution sector. The Millennium Challenge Corporation (MCC) compact with the United States Government which called for a concessioning of ECG has been successfully completed and this will result in an injection of over $1 billion in investment in the power sector from the private concessionaire and MCC over the next five years. Ghana has also been selected for consideration for a third MCC compact with a regional focus.

• Ghana has enough gas to power all our plants without relying on imported gas. Gas is also much cheaper than liquid fuel. This is why a policy decision has been taken to switch largely to the use of gas in energy generation. However, while most of our gas is in the West of Ghana, most of our power plants are in the East. The Ministry of Energy is therefore taking steps to remove the gas transportation bottlenecks, to ensure that Ghanaian gas can reach power plants located in the eastern part of the country. This will ensure that Ghana uses locally produced gas for the bulk of its thermal power generation, saving substantial amounts of foreign exchange on imported fuels. Ghana will save at least $300 million annually by switching from liquid fuel to gas according to World Bank estimates.

• The West Africa Gas Pipeline supplies gas from East to West. The reverse flow project is to move the gas from West to East and construction began in September 2017.

? Temporary By-Pbad (Phase 1) has should be operational this month and will allow gas flow of 60mmscf.

? Reverse flow phase 2 – an additional 55mmscf – should be completed between July and August. Once this is done, Ghana will not need imported gas in the foreseeable future.

? Move of the Karpower plant to the West by August 2019 will increase the gas offtake in the West and balance the grid.

• At the heart of the problems of the energy sector are the short collections by ECG (PDS). This leads to non-payments to service providers in the value chain (GRIDCO and IPPs).

? Since government is a major culprit as most MDAs don’t pay their bills, it has been decided Ministry of finance will now pay MDA electricity bills directly to PDS on behalf of the MDAs

? Use of pre-paid smart meters is to be increased significantly by PDS to increase collections.

? An interim distribution mechanism ( a cash waterfall mechanism) of the proceeds of collections by PDS has now been agreed with suppliers in the value chain.

FIGHTING CORRUPTION

60. Ladies and Gentlemen, as a government, we remain committed to making corruption unattractive on a sustainable basis. This calls for collaboration and strengthening of institutions mandated by the Constitution and other laws of the country to protect the public purse.

The Government has over the past two years increased financial and human resources available to the Auditor-General for the discharge of his constitutional mandate. The total budget for “Goods and Services” which is also the money used in financing audit activities carried out by the Ghana Audit Service stood at GHC14million in 2016 but only GHC9million was released to the Service. In 2017, the current Administration released GH19million to the Audit Service for goods and services; in 2018, a total of GHC33million was released and the budget for 2019 is GHC35million. Similar increases in allocations and releases have been done for CHRAJ.

Timeliness of Reporting

In the past, we used to see the reports of the Auditor-General two, three or more years after the end of the financial years to which they related but since our Government came into office, the reports of the Auditor-General for the year ended 2016 were all submitted to Parliament between July and October 2017 and for the first time in the history of our country, four reports of the Auditor-General for the financial year ended 31st December 2017 were released on 15th June 2018.

On 23rd January 2018, the Auditor-General submitted a report to Parliament covering the audit of liabilities of Ministries, Departments and Agencies (MDAs) as at 31 December 2016. In that report, out of the total claims or liabilities amounting to GH¢11.810 billion submitted by MDAs through the Ministry of Finance to the Audit Service, an amount of GH¢5.479 billion was disallowed by the Auditor-General.

In addition to this, 112 Certificates have been issued and a total amount of GH¢511,211,239.04 was levied against individuals, companies and institutions who committed financial infractions against the State. Also, GHC67million had been recovered from disallowances and surcharges. This is protecting the public purse.

The Economic and Organised Crime Office (EOCO) has also recovered GHC51 million of taxes owed to the state by some private companies, institutions and individuals within the last 18 months.

The appointment of a Special Prosecutor, independent of the Executive, is an obvious indication we want to protect the public purse and to make corruption unattractive in Ghana. Government has allocated GH¢180 million to the Special Prosecutor to fight corruption and we will provide additional resources as needed to enable the Office execute its mandate.

The Right to Information (RTI) Bill which has been on the radar for the last 20 years has finally been pbaded into law. This is historic and a major legacy in the fight against corruption. The rationale for the bill is to give right and access to official information held by public institutions, private entities which perform public functions with public funds. This new Act, when operational, will be a game changer in the fight against corruption.

The Attorney General is also prosecuting a number of people for alleged corruption. Some of the notable prosecutions currently underway include:

o THE REPUBLIC V. STEPHEN OPUNI AND 2 OTHERS (COCOBOD)
?
o THE REPUBLIC V. EUGENE BAFFOE BONNIE AND 4 OTHERS (NCA)

o THE REPUBLIC V. ERNEST THOMPSON AND 4 OTHERS (SSNIT)

o THE REPUBLIC V. SEDINA TAMAKLOE & DANIEL AXIM (MASLOC CASE):

The Public procurement Authority has implemented e-procurement as well as resorted less to sole-sourcing. Between April 2017 and December 2018, an amount of GHC1.9 billion was saved due to the discovery of procurement malpractices.

PORT REFORMS

61. Our ports remain important national badets. And we must manage it to improve trade to the benefit of all Ghanaians. Government has devoted considerable energy over the past 2 years engaging with different stakeholders – shippers, importers, exporters, freight forwarders, traders, spare part dealers listening to their concerns. What was baffling to us was that even though the NPP government had not increased import duties, there were persistent complaints that duties at the ports were high.

62. Government set up a Ports Review Committee to review the competitiveness of Ghana’s ports within the West Africa Region. Here are some surprising findings.

• Except for Nigeria ports, the total marine charges and security fees charged at Tema for container handling far exceed those of our key competitors—3 times the charges in Lome, nearly twice the charges in Abidjan.

• No port in West Africa is charging the equivalent Ghana Maritime Security fee of nearly $20,000.

• Import handling charges are higher in Tema than any port in West Africa.

• While nearly 90% of containers that come to Tema are physically examined, only 5% are physically examined in most modern ports. Physical examination is a major source of corruption at the ports. Data shows that physical examination contributes less than 0.4% of additional revenue to the State. The time, unofficial facilitation fees and the energy spent in collecting this amount totally negates any gains this may have brought to government.

• Many port charges are a percentage of the value of the goods and this makes them exorbitant and hardly justifiable. Why should the cost of scanning a container, vehicle examination fee, and network charge be a percentage of the value of the goods in the container? Why should the cost of processing the documentation covering imports be a percentage of the value of the imports when most modern ports are charging flat fees?

• The benchmark values applied by Customs to various commodities in the computation of import duties in Tema are much higher than in Lome, Abidjan and Dakar. In many cases, more than 100%-200% higher.

63. For example, the badessed value for a used Ford Focus (2009) is US$9017.2 in Tema, but US$3139.3 in Lome and Abidjan. With this badessment, the total clearing cost for this vehicle is US$4423.7 in Tema, US$2386 in Abidjan and US$2103 in Lome.

64. We have an archaic practice. When many importers are unable to pay their duties, their cars and commodities are confiscated, and auctioned off very cheaply at prices often much less than the duty owed.

65. For importers, the choice of ports is clear. There is an increasing diversion of trade away from Tema port and smuggling of many items into Ghana is very tempting. Container import volumes into Lome port between 2013 and 2018 increased by over 300% (or 60% annually) while Ghana container import volumes into Tema increased only by 4.1% annually over the same period.

66. New Measures

Cabinet has made the following decisions with the objective of ultimately increasing trade facilitation, efficiency and revenue from the port. Ghana is losing huge amounts of container traffic and for that matter revenue to Lome and other ports:

a) To reduce the incidence of smuggling and enhance revenue, the benchmark or delivery values of imports have been reduced by 50 percent except for vehicles which will be reduced by 30% effective 4th April 2019. This means for example, if a container was previously badessed for duty at a value of $20,000, it will now be badessed from tomorrow at a value of $10,000. We expect that the higher volumes of at least 50% annually and increase custom revenues

b) Also, the physical examination of containers is to be reduced from over 90% to under 10% by June 2019. Customs and any other government operatives at the ports should adhere to the recommendations of the risk engine under the paperless regime. The risk engine allows for the incorporation of specific intelligence on containers. Where containers are selected by the risk engine for examination, there will be joint examination which must include National Security.

c) There should no longer be separate examinations of containers by any government operative at the gates of exit.

d) Government will also begin the implementation of the First Port Rule in June 2019 so that duty on all transit items will be paid at our port to the Customs representatives of the country of destination. We will implement a strict “no duty no exit” policy for containers without exception. This will block leakages and increase revenue.

e) Going forward, Ghana will adopt a flat fee structure for port and customs charges for any new single window operator in line with best practices of charges at major ports globally.

Subject to Parliamentary approval, Government will also review the following measures on port charges to enhance the efficiency of port operations.

f) The service charge of $1.50 per ton of every export and $2.0 per ton of every import levied by Ghana Shippers Authority.

g) The importer registration fees imposed by Ghana Standards Authority.

h) the recently introduced Eazy Pbad levy of up to 0.5% of the CIF value of goods by Ghana Standards Authority.

i) the security charge of $0.50 per gross tonnage of every vessel coming into Ghana’s waters charged by Ghana Maritime Authority (GMA).

j) the $7 per new tyre eco levy charged by EPA, and the eco levy of 0.5% CIF value charged by EPA on a number of import items.

67. To deal with the lack of information on the status of a consignment and the duty payment, a mobile app has been developed to enable importers check the status of their consignment and the import duty payable online. The app can be obtained on google playstore and will also soon be available on iTunes. It is called Ghana Trade Hub mobile app. An importer just needs to have an Import Declaration Form number to access the information.

These reforms are expected to increase revenues as container volumes through the port increase. However, in the short term, necessary fiscal adjustments will be made to accommodate any temporary revenue shortfall to maintain fiscal discipline.
Ladies and gentlemen, this is just two years of hard work. The achievements our government have been remarkable given the situation we inherited.

68. When you manage any economy, you are bound to face challenges and surprises from time to time but it is how you deal with the challenges that matter. What we need to do is to develop the capacity of the economy to respond to the ups and downs of the market forces through strong fiscal and monetary management and coordination. Ghanaians can be badured that this is what the fiscal and monetary managers are doing so well.

The establishment of the Fiscal Stability Council and the Financial Stability Council are powerful signals of the government determination to prevent any unpleasant surprises in the way we manage the economy going forward.

We will be the first to admit it has not all been rosy and that there is still a lot more to do; and the full impact of some of our initiatives is not immediate, but will be very important for the country in the very near future.

Our hospitals still need a lot of work and attention to enhance the quality of medical care, our education system will continue to need improvement, we still have challenges in the energy sector and so on. We are dealing with many problems that we have had as a country for over 60 years but I am sure that any neutral observer will agree that we have after only two yours in office (given the situation we inherited), made a solid start.

The Future is Bright

69. Looking to the future, one can say that Ghana’s future under the leadership of President Nana Addo Dankwa Akufo-Addo is bright and the prospects of growth are promising.

We are implementing a plan to change the structure of the economy.

• Two years into the Planting for Food and Jobs and now for Exports, we have learnt a lot and we are optimistic.

• Under the One District and One Factory and the stimulus package for businesses, industry growth is on the uptake. The gradual improvement of the ease of doing business and the national agenda for entrepreneurship and innovation stimulate business creation.

• The emerging automobile industry, the integrated bauxite and aluminium industry to be followed by iron and steel, petro-chemical and value addition processing are our pillars of diversification to change the structure of the economy. And we must train our young workforce to the extent of these economic changes.

• The pace of digitization that is currently underway will make Ghana one of the most digitized economies in Africa in the next five years.

• That is not all, Ghana’s recent oil discoveries could significantly boost production starting in 2021. If the envisaged developments progress without delays, they could potentially double oil production in 2021, to roughly 400,000 barrels-per-day.

70. The new Aker discovery contains at least 500 million barrels and that will raise economic growth to 10% and above from 2021. There are potentially other discoveries likely by Exxon, and other big players currently exploring. The apparent discovery of oil onshore in the Voltain basin will add to Ghana’s potential economic boom. If we manage these resources properly and don’t take risks with people who have demonstrated an inability to manage our economy, Ghana will be a very positively different country in a few years’ time. This will help change the structure of production, move Ghana away from the Guggisberg economy, and further boost Ghana’s economic prospects.

Some Forthcoming Infrastructure Projects

71. The government’s integrated infrastructure development and investment programme is on course across the country. This covers investments in a modern road network, water systems, aviation, ports, harbours and railways. Some of the forthcoming projects include:

• Sinohydro Master Project Support Agreement

• 12 Fish landing sites

• Pwalugu multi-purpose dam

• Bui solar hybrid and irrigation project

• Between Pwalugu and Bui, 60,000 hectares to be brought under irrigation compared to 12,980 hectares of government financed irrigation since GIDA was set up in 1977

• Railways

o The Accra to Tema railway service has started running on the refurbished line.

o Rehabilitation of Accra/Nsawam line is almost complete.

o Work is continuing on the rehabilitation of the Kojokrom to Tarkwa

o Work on the standard gauge section from Kojokrom to Manso is ongoing.

o Eastern Line, Western and Tema-Ouagadougou lines are being tendered.

• Housing ( 100,000 affordable housing units with United Nations Office of Project Services)

• $1.5 billion GETFUND school infrastructure projects

• Volta Lake Transport( Mpakandan to Mankango)

• Tamale Airport Phase 2

• Kumasi Market Phase 2

• Construction of Four (4) Dedicated Container Terminals

• Multi-Purpose Container Terminal at Takoradi Port

• Dry Bulk Jetty at Takoradi Port

• Construction of Ferry Landing Sites( Dambai, Yeji, Makango and Agordeke)

• 10 Youth and Sports Resource Centers of Excellence underway

CONCLUSION

72. Ladies and Gentlemen, in conclusion, let me reiterate that:

o When it comes to GDP growth, we have performed better than what we inherited

o Agricultural growth – we have performed better

o Industry – we have performed better

o Inflation – we have performed better

o Interest rates – we have performed better

o Exchange rate depreciation- we have performed better

o Fiscal Deficit – we have performed better

o Trade Balance – we have performed better

o Current Account Balance- we have performed better

o Gross International Reserves – we have performed better

o Jobs – we have performed better

o Teacher Training Allowances – we have performed better

o Nursing Training Allowances- we have performed better

o Pbadport Application – we have performed better

o Drivers License – we have performed better

o Renewal of NHIS membership – we have performed better

o Registering a business – we have performed better

o Cost of electricity – we have performed better

o Taxes – we have performed better

o Efficiency of clearing goods at the ports – we have performed better

o Cost of clearing goods at the ports – we have performed better

o Fighting Corruption – we have performed better

o Right to Information Act- we have performed better

o Zongo Community needs – we have performed better

o National ID Cards- we have performed better

o Mobile Payment Interoperability – we have performed better

o Digital Address System – we are on course

o One district one factory – we are on course

o One Village One dam – we are on course

o One constituency one ambulance – we are on course

o Free SHS – we have delivered

In short, we are managing the economy better and fulfilling our promises. But as I mentioned earlier, we still have more to do.

Thank you for your attention.

May God Bless you and
May God Bless our Homeland Ghana.