Ghana Today - Information Gateway to Ghana - Ghana Today - Information Gateway to Ghana - Business Ghana Today, The Information Gateway to Ghana offering the latest Ghana based news, sport, tourism, entertainments, music, dating and much more. http://www.ghanatoday.com Tue, 19 Mar 2019 04:47:07 +0000 Joomla! - Open Source Content Management en-gb Ghana, Japan sign $58.4m grant agreements for road and health infrastructure http://www.ghanatoday.com/news/business/item/3545-ghana-japan-sign-$584m-grant-agreements-for-road-and-health-infrastructure http://www.ghanatoday.com/news/business/item/3545-ghana-japan-sign-$584m-grant-agreements-for-road-and-health-infrastructure Ghana, Japan sign $58.4m grant agreements for road and health infrastructure

 

 

 

Ghana and Japan on Friday signed two grant agreements totalling $58.4 million, geared towards the improvement of international corridor roads and sector budget support to promote health service delivery.

The signing of the agreements was initialled for Ghana by Madam Shirley Ayorkor Botchwey, Minister for Foreign Affairs and Regional Integration, while that of Japan was by Mr Kaoru Yoshimura, the Ambassador Extraordinary and Plenipotentiary of Japan and Mr Koji Makino, the Chief Representative, Japan International Cooperation Agency (JICA).

The grant agreement signing was done in Accra at a reception to mark the 60 years anniversary of diplomatic relations between the two nations.

The first is $56.6 million (¥ 4.375 billion) grant agreement for the project for the Improvement of International Corridor Roads in Ghana.

This comprises of the implementation of the project for improvement of the Tema Motorway Roundabout and the detailed design for the rehabilitation of National Trunk Road N8 Phase II.

The concept of the rehabilitation of the National Trunk Road N8 Phase II involves Rehabilitation of the 31.2km Assin Fosu – Asssin Praso road section with asphalt concrete pavement and the dualisation of the 1.2km section in the centre of urbanised area of Assin Fosu township.

Others are the replacement of an existing railway overpass bridge with a box culvert, reconstruction/rehabilitation of drainage facilities between Assin Fosu and Assin Praso and installation of a toll collection facility at the south of Assin Praso township.

The second grant is a $1.8 (¥ 200 million) sector budget support to promote health service delivery in Ghana.

The overall aim of this grant is towards poverty alleviation through improved health status of the Ghanaian population and the attainment of Universal Coverage of Health Services in Ghana.

The grant, which is to support government budget allocation to the primary health care level, would be given to the Ministry of Health for onward allocation to the Ghana Health Service, which is the implementing body of the grant.

The grant amount would be disbursed with 2017 to support community health activities in Northern, Upper East and West Regions.

It would specifically support home visit activities of Community Health Officers (CHOs) and system strengthening.

Madam Botchwey said the event was an important milestone for the two countries to recognise the significance of bilateral partnership that they have had in the process of their socioeconomic development through the Japanese Official Development Assistance (ODA).

“Japan has remained a reliable friend of Ghana, since the arrival of the great scientist, Dr Noguchi of blessed memory in the then Gold Coast in 1927, to conduct research into yellow fever for the survival of mankind.

“The relationship between the two countries was further consolidated, when Ghana attained Independence in 1957, with the two countries establishing diplomatic relationship that year,” she said.

“The strengthening of relationship between our two countries over the years had been characterised by our common desire to forge friendship and corporation based on mutual respect and support for each other’s development aspiration, as well as solidarity in the pursuit of peace, stability and security,” she added.

She said remarkably, the traditional bonds of friendship and corporation forged at the political level had greatly manifested in the steady economic growth of the two countries.

Madam Botchwey said over the past decades, Ghana and Japan had enjoyed fruitful economic and technical corporation as evidenced by the latter’s assistance to the former in practically every aspect of the economy; such as finance, agriculture, food aid, governance, infrastructure development, culture, education and trade.

On the international scene, the Foreign Minister said, Ghana and Japan share common positions on global issues such as the reform and composition of the United Nations governance structure.

She said the two countries had over the years supported each other’s candidature at the international level.

“The Government and people of Ghana sincerely appreciate the considerable financial and material support extended by Japan to Ghana over the years in our quest for economic development,” she said.

Mr Yoshimura said the signing of the two grant agreements, was a proof of the strength of the relationship between Ghana and Japan.

“Japan has been a consistent development partner to Ghana since Japan’s Official Development Assistance (ODA) to Ghana started in 1963,” he said.
“I am, therefore, very much excited about how far our two countries have come,” he said.

In a flashback, Mr Yoshimura recounted Ghana Japan relationship from 1957 during the era of Dr Kwame Nkrumah, then Ghana’s Prime Minister and Mr Nobusuke Kishi, then Japan Prime Minister.

He said this year would mark the 90th anniversary of the arrival of Dr Hideyo Noguchi to conduct medical research towards the cure for yellow fever in Ghana.

Dr Noguchi, unfortunately, met his untimely death through the yellow fever research; and in his memory, the Noguchi Memorial Institute for Medical Research was set up at the University of Ghana.

Mr Kwaku Agyemang-Manu, Ghana’s Health Minister, lauded the Japanese Government for the support.

He said the funds would be used for their intended purposes to accelerate Ghana’s socioeconomic development.

Among the key people, who witnessed the grant signing agreements include Mr Sylvester Parker-Allotey, Ghana’s Ambassador to Japan, Professor Ebenezer Oduro Owusu, the Vice-Chancellor, University of Ghana and Mr Kaz Tamura, the Chairman of Japanese Community in Ghana.

Source:GNA

 

 

 

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evans@ghanatoday.com (kwame) Business Mon, 03 Apr 2017 08:10:25 +0000
Ghana to foster stronger ties with China – Finance Minister http://www.ghanatoday.com/news/business/item/3538-ghana-to-foster-stronger-ties-with-china-–-finance-minister http://www.ghanatoday.com/news/business/item/3538-ghana-to-foster-stronger-ties-with-china-–-finance-minister Ghana to foster stronger ties with China – Finance Minister

 

 

 

The Minister of Finance has hinted of the new government’s commitment, to develop better relationship with the Chinese, which is aimed at developing a robust economy.

In view of this, the government is expected to meet with the Chinese officials in Ghana led by their ambassador, for the second time since he assumed office to discuss issues of mutual interest and the $3 billion China Development Bank loan (CDB).

In 2011, the Attah Mills/Mahama government secured a $3 billion loan from the China Development Bank (CDB) which is state owned, for major infrastructure development projects in Ghana.

The loan agreement was approved by Parliament in August 2011 amid controversy over the terms and conditions of the loan agreement, particularly, the collateralization of oil against the loan.

But till date, out of the $ 3 billion loan facility, close to about $1 billion has been disbursed.

Speaking to the media on Sunday February 5, 2017, the Minister Finance Ken Ofori-Atta said the ministry would on Monday February 6, 2017 hold its second meeting with the Chinese embassy since President Nana Akufo-Addo was sworn in on Jan. 7, noting that the CDB Chinese loan would be high on the agenda.

“We’re meeting for a second time with the Chinese Embassy” on Monday, and we are trying to nail down and look at an enhanced relationship with China to see how they can support the direction in which we’re now going as we build a stronger economy”

China-Ghana economic cooperation continues to gain momentum. In 2010 the bilateral trade surpassed US$2 billion for the first time. In 2013 it hit US$5.15 billion, ranking 3rd in 24 Mid & West African countries and 7th in Africa.

Therein, Ghana’s export volume to China has seen a year-on-year increase of 86.7%, reaching US$1.2 billion in 2015. China has become one of the major investment source countries of Ghana with the non-financial FDI reaching US$1.5 billion.

The Minister of Finance Ken Ofori Atta, since taking over the finance ministry, has said the budget deficit and government debt are much higher than had been expected, adding pressure to public finances.

This therefore makes it important for the government to look elsewhere for cheaper sources of funding which will not add to the public debt especially in a form of interest payments on loans.

Source: B&FT

 

 

 

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evans@ghanatoday.com (kwame) Business Wed, 08 Feb 2017 15:12:04 +0000
Ghana risks IMF sanction over ‘GHS7bn loophole http://www.ghanatoday.com/news/business/item/3537-ghana-risks-imf-sanction-over-‘ghs7bn-loophole http://www.ghanatoday.com/news/business/item/3537-ghana-risks-imf-sanction-over-‘ghs7bn-loophole Ghana risks IMF sanction over ‘GHS7bn loophole

 

 

 

Ghana risks being sanctioned by the International Monetary Fund (IMF) for failing to disclose full financial data to the fund at the time it signed onto the three-year Extended Credit Facility (ECF), the Majority in Parliament has said, pointing to the GHS7 billion that it claimed had not been accounted for.

The sanction will be similar to a US$39 million fine that the fund imposed on the country in 2000 after accusing Ghana of providing misleading financial information.

While insisting that the previous administration intentionally hid some GHS7 billion expenditure from the fund and Ghanaians, the Majority NPP Members of Parliament (MPs) said they feared that what happened in that year could befall the country again if the fund finds out about the alleged loophole.

“We will know by the end of this week (if the expenditure loophole is true and liable to sanctions) when the Mission Chief is expected to brief donors on his findings,” the Majority Spokesperson on Finance and Chairman of Parliament’s Finance Committee, Dr Mark Assibey-Yeboah, said at a news conference in Accra on February 2.

The press conference was to shed more light on earlier allegations by the Vice President, Dr Muhammudu Bawumia, that the John Mahama administration had failed to account for some expenditure arrears, totaling GH¢7 billion.

While supporting the Vice President’s claim, Dr Assibey-Yeboah said what was worrying was the fact that the arrears covered 2014-2016, the period of negotiations of the ECF programme begun.

“On the face of the reality that the arrears dated back to 2014, then it would suggest that when the previous administration entered into negotiations with the IMF, full disclosure of data was not made available to the fund,” he stated.

He said, given that, the implementation of the ECF was still underway, the IMF stood a better position to make some of these issues clear, as to whether it represented a breach of the ECF programme conditionalities.

“We may also recall that under the program, the government is not allowed to accumulate arrears and this may yet represent another serious breach of the program and punitive actions could be meted out against Ghana,” he pointed out.

As a result, he said the non-disclosure, in full, of arrears for 2015 and 2016 also raised further questions on the integrity of data that the previous administration churned out over the past eight years.

Implications on budget deficit

Dr Assibey-Yeboah, also pointed out that these uncovered arrears could put the overall budget deficit at 10-11 per cent of GDP, up from the 8.5-9.5 percent being projected for 2016.

“Let us put this in perspective- for an economy with a size of US$ 41.5 billion, the current deficit numbers show that in 2016 alone, our expenditures far exceeded revenues by as much as US$ 4 billion,” he said.

“Who financed these expenditures? Is it the Bank of Ghana through the banks? Is it from the US$ 250 million that was provided UBA bank?” he asked.

“Didn’t President Mahama keep reminding us that his government was not going to overblow the deficit? How did this humongous deficit arise in spite of declarations to the contrary? Where was staff at the Finance Ministry doing all this while?”

Minority’s reaction

The Minority in Parliament had earlier on responded to the Vice President Dr Mahamudu Bawumia’s revelation that the NDC government failed to disclose a GHS7billion expenditure.

The Minority Spokesperson on Finance and Ranking Member of the Finance Committee, Mr Cassiel Ato-Forson said the GhS7 billion referred to by the Vice President came about as a result of a major initiative or reform on government contracts and expenditure, which was part of the GIFMIS project [Ghana Integrated Financial Management Information System] that the new administration was expected to continue implementing.

He said the framework was covered in the new Public Financial Management (PFM) Act, under the Budget Responsibility provisions.

Mr Ato-Forson therefore accused the Vice President of rushing to make his allegations without understanding the structural measures, reforms and the rationale for the reforms and initiatives.

Dr Assibey-Yeboah, however, described this reaction as pathetic, stating that, “clearly there is an admission by the minority that the GHS7 billion expenditure which had been kept out of the purview of the books of government, constitutes real expenditures that have been undertaken,” he stated.

He said the explanation by the Minority depicted a team that was grossly unaware of the extent to which the nation’s books may have been cooked to provide a false sense of good economic management and to deceive investors.

“More worrying is the fact that the Former Deputy Minister attributed the arrears accumulation to reforms underway and the way in which data is captured. What he describes as creative accounting management is unethical and dangerous,” he said.

Source: Graphic.com.gh

 

 

 

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evans@ghanatoday.com (kwame) Business Wed, 08 Feb 2017 15:08:31 +0000
Sipa Yankey quits, leaving behind $450m VRA debt http://www.ghanatoday.com/news/business/item/3533-sipa-yankey-quits-leaving-behind-$450m-vra-debt http://www.ghanatoday.com/news/business/item/3533-sipa-yankey-quits-leaving-behind-$450m-vra-debt Sipa Yankey quits, leaving behind $450m VRA debt

 

 

 

The Chief Executive Officer (CEO) of the Ghana National Gas Company, Dr. George Sipa-Adjah Yankey, is set to proceed on terminal leave.

The Board of the Company last week approved a request by the CEO to proceed on terminal leave, effective February 1, 2017, and terminating in May 2017.

Corporate Communications Manager of Ghana Gas Alfred Ogbamey said Dr. Yankey leaves behind an inspirational legacy of overseeing the conception, birth and growth of Ghana’s premier natural gas processing company.

“He has led the pioneering of Ghana Gas from its incorporation in July 2011 through its successful implementation of Phase I of the Western Corridor Gas Infrastructure Development Project (WCGIDP), to the processing and supply of ‘First Gas’ to the Volta River Authority (VRA) beginning 1:45 pm, Monday, November 24, 2014,” he said.

Dr Yankey supervised the Construction and Operations phases of the Company, and has served as a board member and CEO of the Company since it was dreamt as a concept and the structures established.

The Company directly employs about 300 people and provides thousands of ancillary jobs in the service, hotelier, marketing, and transport industries, as well as in the delivering and retailing of LPG and Condensates across Ghana.

Under the leadership of the outgoing CEO, Ghana Gas completed the three-tier Ghana Gas project, from conception and design to the construction of a 12-inch 58-kilometre Offshore Pipeline, a 20-inch 111-kilometre Onshore Pipeline and a world class Atuabo Gas Processing Plant (GPP) within a period less than the three-to-four year standard global timeline for such projects.

He oversaw the engineering, design and installation of a second overhead De-ethenizer Compressor which will be connected to Ghana Gas facilities in February 2017.

He also led the negotiation of the upgrade of the processing capacity of the Atuabo Gas Processing Plant (GPP) from 150 million standard cubic feet of gas a day (mmscfd) to 180 mmscfd, construction of the 290 km Offshore Pipeline from Aboadze to Tema and signed the Project Implementation Agreements (PIAs) for both projects in September 2016.

Dr Yankey came into the CEO job at Ghana Gas with a background as a Finance, Trade and Investment Lawyer.

He is a former Minister of Health, a former President of ECOWAS Bank, a former Adjunct Professor at the International Law Institute, Georgetown University, Washington D.C. and a Visiting Instructor at the Law Development Institute in Rome, Italy.

The main challenge he leaves for his successor to tackle is the inability of Ghana Gas’ main downstream off-taker, VRA, to pay over US$450 million debt owed the Company for lean gas supplied to the Aboadze Thermal enclave to generate electricity.

A 2016 first half-year report by the Public Interest and Accountability Committee (PIAC), which projected the debt at about $307 million in June last year, noted that the non-servicing of the debt could impact negatively on domestic natural production.

Source: 3news.com

 

 

 

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evans@ghanatoday.com (kwame) Business Tue, 24 Jan 2017 15:40:13 +0000
Govt to establish ‘IDF’ to boost private sector – Alan http://www.ghanatoday.com/news/business/item/3531-govt-to-establish-‘idf’-to-boost-private-sector-–-alan http://www.ghanatoday.com/news/business/item/3531-govt-to-establish-‘idf’-to-boost-private-sector-–-alan Govt to establish ‘IDF’ to boost private sector – Alan

 

 

 

The Minister of Trade and Industry-designate, Alan John Kwadwo Kyerematen, has hinted of the establishment of an Industrial Development Fund aimed at facilitating access to medium and long term capital for the private sector.

“The important thing is for the private sector to recognize that government is committed to helping it survive,” he told Parliament’s Appointment Committee Monday during his vetting.

He said the government is working to provide a stimulus package for existing companies in order to make them competitive, with the capacity to create jobs.

“Our plan is to make the existing businesses more competitive,” he averred.

The Akufo-Addo government, he said, would concentrate on the continental and regional markets making references to  the Africa Growth and Opportunity Act (AGOA), a United States Trade Act, which enhances market access to the US for sub-saharan African (SSA) Countries including Ghana.
Helping the MMDAs.

He said the Akufo-Addo government would soon roll out a programme that would set the agenda for decentralizing development at the Metropolitan, Municipal and District Assemblies (MMDAs) levels.

The government, he told the committee, would identify one or two entrepreneurs in each district “who are willing to support viable businesses.”

He noted government is already looking to engage  medium to large scale enterprises with the potential to affect the economy of all districts nationwide.

“Whatever government believes is necessary to ensure this business enterprise is realized, we will do,” he assured.

Source: Ghana/StarrFMonline.com/103.5FMa

 

 

 

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evans@ghanatoday.com (kwame) Business Tue, 24 Jan 2017 15:31:22 +0000
Ghana doesn’t need IMF, World Bank – Nduom http://www.ghanatoday.com/news/business/item/3505-ghana-doesn’t-need-imf-world-bank-–-nduom http://www.ghanatoday.com/news/business/item/3505-ghana-doesn’t-need-imf-world-bank-–-nduom Ghana doesn’t need IMF, World Bank – Nduom

 

 

 

 

The flag bearer of the Progressive People’s Party (PPP) Dr. Papa Kwesi Nduom has condemned the current and previous governments for resorting to the Bretton Woods institutions to cushion the economy.

 

According to Dr. Nduom, Ghana does not need the International Monetary Fund (IMF) or the World Bank before it can thrive.

“We do not need anybody from anywhere to come and tell us what to do as a sovereign nation. Ghanaians want the easy way out hence always running to the waiting arms of these multinational institutions anytime there is difficulty,” he told the leadership of the Trades Union Congress (TUC).

In this regard, he promised that a PPP government under his watch will not succumb to the whims and caprices of the Bretton Woods institutions no matter the situation.

For instance, he cited the examples of China and Korea and how these countries rejected the Bretton Woods institutions.

However, he said through some sacrifices and a dint of hard work made by those countries today they are better off. “See where China and Korea are? This is the kind of decisions we will opt for in order to build our economy,” he further stressed.

Dr. Nduom has assured the leadership and members of the TUC of his party’s commitment to job creation when voted into power.

Dr. Nduom, who met the leadership of the TUC in Accra to share his party’s vision with the Union, said his “party [when voted to power] will create jobs for the teeming unemployed youth scattered across the country.”

According to him, the only way out for the country to turn its fortunes around was not to rely on empty promises like some other political parties are doing.

“We are talking from what we have done in the various sectors of the economy in some communities across Ghana which we know and believe it will work for the whole country,” he said.

The PPP 2016 flag-bearer noted that about 53% of the Ghanaian population is into agriculture, yet that is where poverty is endemic.

“A PPP led government will work hard to eradicate all preventable diseases like malaria to increase productivity in all sectors,” he promised.

Secretary General of TUC, Dr. Anthony Yaw Baah, on his part, thanked Dr. Nduom for making time to share with the Union his party’s vision, policies and programmes.

He indicated that the TUC does not do politics but rather work with governments, and “for that matter we are ready to work with any government.

Dr. Baah, however, wished the PPP flag-bearer and the party well in their campaign for the presidency.

 

Source: Starrfmonline

 

 

 

 

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evans@ghanatoday.com (kwame) Business Fri, 04 Nov 2016 15:10:50 +0000
Siemens Deepens Presence In Ghana’s Energy Sector http://www.ghanatoday.com/news/business/item/3485-siemens-deepens-presence-in-ghana’s-energy-sector http://www.ghanatoday.com/news/business/item/3485-siemens-deepens-presence-in-ghana’s-energy-sector Siemens Deepens Presence In Ghana’s Energy Sector

 

 

 

Global technology powerhouse Siemens has announced a significant investment in Ghana’s gas and steam energy generation projects over the next three to five years.

Siemens will roll out a series of projects, including new gas and steam turbines, contributing 150 megawatts to the national power grid in Ghana, Sabine Dall’Omo, Siemens Southern and Eastern Africa CEO, said at a VIP event on Wednesday in Accra.

“We have identified Ghana as one of our key countries and our further investment is aimed at helping the country reach its economic goals and secure it as a serious contender on the African continent,” Dall’Omo said.

She added that the company was still considering the best financial structure by which to carry out the projects.

The event was attended by Ibrahim Murtala Mohammed, Deputy Minister of Trade and Industry.

With a current power generation capacity of 2,936 MW, Ghana requires significant further energy investment. Hydropower is by far the largest contributor to the country’s energy supply at 1580 MW, and the government aims to increase overall capacity to 5,000 MW through harnessing renewable energy projects in the future.

Local partnerships 

One such project is for ENI in Sanzule where Siemens has been contracted to deliver two gas compression packages for its onshore receiving facility.

In this instance, Siemens has entered into a joint venture with local company Draper Oil and Gas Limited to form Siemens Oil and Gas.

 

Other projects in Ghana 

Siemens is also currently rolling out a steam turbine project with Group 5 in Kpone, the largest steam plant in Ghana, contributing about 350 megawatt to the national grid. Another project under way is the Tema Thermal Power Plant.

The Tema Plant is being rolled out in two phases and includes the installation of eight gas turbines overall.

It has the advantage of flexibility in times of unsecure gas supply, and will ultimately add 82 MW to the national grid.

“Siemens will in future be working with stakeholders to look into opportunities to harness wind energy to meet Ghana’s energy needs,” Mr Dall’Omo said.

Edmund Acheampong, a Ghanaian employee with Siemens in the United States, has been appointed as the Ghana country manager.

His team will be responsible for business development, sales and project execution.

Acheampong said at the event that Siemens is currently active in more than 200 countries, and has a 165-year track record in engineering excellence, innovation, quality and reliability.

Source: Daily Guide

 

 

 

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evans@ghanatoday.com (kwame) Business Tue, 23 Aug 2016 14:38:30 +0000
Siemens Deepens Presence In Ghana’s Energy Sector http://www.ghanatoday.com/news/business/item/3484-siemens-deepens-presence-in-ghana’s-energy-sector http://www.ghanatoday.com/news/business/item/3484-siemens-deepens-presence-in-ghana’s-energy-sector Siemens Deepens Presence In Ghana’s Energy Sector

 

 

 

Global technology powerhouse Siemens has announced a significant investment in Ghana’s gas and steam energy generation projects over the next three to five years.

Siemens will roll out a series of projects, including new gas and steam turbines, contributing 150 megawatts to the national power grid in Ghana, Sabine Dall’Omo, Siemens Southern and Eastern Africa CEO, said at a VIP event on Wednesday in Accra.

“We have identified Ghana as one of our key countries and our further investment is aimed at helping the country reach its economic goals and secure it as a serious contender on the African continent,” Dall’Omo said.

She added that the company was still considering the best financial structure by which to carry out the projects.

The event was attended by Ibrahim Murtala Mohammed, Deputy Minister of Trade and Industry.

With a current power generation capacity of 2,936 MW, Ghana requires significant further energy investment. Hydropower is by far the largest contributor to the country’s energy supply at 1580 MW, and the government aims to increase overall capacity to 5,000 MW through harnessing renewable energy projects in the future.

Local partnerships 

One such project is for ENI in Sanzule where Siemens has been contracted to deliver two gas compression packages for its onshore receiving facility.

In this instance, Siemens has entered into a joint venture with local company Draper Oil and Gas Limited to form Siemens Oil and Gas.

 

Other projects in Ghana 

Siemens is also currently rolling out a steam turbine project with Group 5 in Kpone, the largest steam plant in Ghana, contributing about 350 megawatt to the national grid. Another project under way is the Tema Thermal Power Plant.

The Tema Plant is being rolled out in two phases and includes the installation of eight gas turbines overall.

It has the advantage of flexibility in times of unsecure gas supply, and will ultimately add 82 MW to the national grid.

“Siemens will in future be working with stakeholders to look into opportunities to harness wind energy to meet Ghana’s energy needs,” Mr Dall’Omo said.

Edmund Acheampong, a Ghanaian employee with Siemens in the United States, has been appointed as the Ghana country manager.

His team will be responsible for business development, sales and project execution.

Acheampong said at the event that Siemens is currently active in more than 200 countries, and has a 165-year track record in engineering excellence, innovation, quality and reliability.

Source: Daily Guide

 

 

 

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evans@ghanatoday.com (kwame) Business Tue, 23 Aug 2016 14:38:30 +0000
We’ve taxed Ghanaians too unduly – Terkper http://www.ghanatoday.com/news/business/item/3478-we’ve-taxed-ghanaians-too-unduly-–-terkper http://www.ghanatoday.com/news/business/item/3478-we’ve-taxed-ghanaians-too-unduly-–-terkper We’ve taxed Ghanaians too unduly – Terkper

 

 

 

The Minister of Finance, Seth Terkper, has admitted the undue taxation of Ghanaians when the government could have ensured that State Owned Enterprises and development projects were well managed to be able to pay for loans taken.

According to the Minister, “We have fallen into some bad habit of doing commercial projects and then asking the taxpayer to pay for it.”

Mr Terkper, who was speaking during a press briefing session in Accra yesterday, indicated that the government had made some corrections to its debt management strategies and had initiated a policy that would ensure that “if we borrow for commercial developments, the projects should pay for the loan.”

“It shouldn’t be the taxpayer and so today we have the developments at the airport on self-financ­ing basis; we’ve put the expansion taking place at Takoradi on self-financing basis; the Tamale Airport is on self-financing basis,” the Finance Minister noted.

Responding to queries about the status of the Tema Oil Refinery (TOR) debt and whether the government had stopped paying the debt, the Minister was unable to readily provide the level of debt except to say that the debt was ring-fenced.

“What we need to do is to get the right policy in place to help our SOEs not to fall into debt and then we fall on the taxpayer,” he said.

He attributed the existence of the TOR and VRA debts to give­ornaments inability to pay subsidies.

“The subsidies which we couldn’t pay, we are paying now after years of accumulation in the form of taxes and levies,” he admitted.

To take the burden of government, a major structuring of State Owned Enterprises (SOEs) is underway.

The only government entities that are allowed to make profits are the SOEs. They must come back to trimming their costs and making profits and to the extent that government is part of their dilemma in terms of subsidies and arrears, we must also make that correction so we can have a sound economy.

Source: Finder

 

 

 

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evans@ghanatoday.com (kwame) Business Tue, 23 Aug 2016 14:08:55 +0000
Debt-To-GDP Ratio Decline Inaccurate http://www.ghanatoday.com/news/business/item/3476-debt-to-gdp-ratio-decline-inaccurate http://www.ghanatoday.com/news/business/item/3476-debt-to-gdp-ratio-decline-inaccurate Debt-To-GDP Ratio Decline Inaccurate

 

 

 

The recent declaration in the supplementary budget by the Finance Minister Seth Terkper that the country’s debt-to-GDP ratio has declined has been challenged by the Institute of Fiscal Studies (IFS), which has described the announcement as inaccurate.

“This is because the main reason for the fall in the ratio during the year is the effect of the projected large nominal GDP of GH¢166.8 billion in 2016 used to derive the ratio. The upward revision in the nominal GDP figure to this level itself raises some doubts in view of the fact that the projected real GDP growth for the year has been cut down from 5.4 percent to 4.1 percent, and there has been no revision to projected inflation,” it pointed out.

The economic think-tank also said as more borrowing takes place in the remaining period of the year, the debt-to-GDP ratio will certainly rise, adding that a more substantive reduction in the debt burden could only be achieved if fiscal consolidation continued, the exchange rate was kept stable and economic growth strengthened.

“Moreover, the worries about the debt do not only have to do with the ratio to GDP but also the interest spending on the debt. Interest cost to government has risen from GH¢2.4 billion (3.2 percent of GDP) in 2012 to an estimated GH¢10.5 billion (6.3 percent of GDP) in 2016.”

Interest cost

Relative to total government expenditure, it said, interest cost has jumped from 9.6 percent in 2012 to a projected 22.7 percent in 2016.

In addition, whereas traditionally the budget for debt interest has not exceeded the capital budget in Ghana, the reverse has been occurring since 2014.

“In that year, interest cost was 16.2 percent more than capital expenditure. The gap increased to 27.2 percent in 2015 and is estimated to be 64.1 percent in 2016. We do not think this situation is tenable. The need to reduce the public debt burden therefore is also to cut back on debt interest payments which are crowding out public investment and other critical expenditure.”

IFS said the build-up of public debt had been quite rapid in the last four years, with the debt stock growing from GH¢35.1 billion in 2012 to GH¢100.2 billion at the end of 2015 and the debt-to-GDP ratio increasing from 48.4 percent to 71.6 percent in the same period.

“This has stirred up troubling memories of the past when an unsustainable rate of debt accumulation drove the nation to seek debt relief by signing on to the Heavily Indebted Poor Countries (HIPC) initiative.”

Stabilization Fund

It further said the proposal to further lower the cap on the Ghana Stabilization Fund to $100 million was disturbing since it risked undermining the objective for creating the Fund to build savings to cushion the impact on the budget of unanticipated shortfalls in petroleum revenues.

“The continued depletion of the Stabilization Fund, whose closing book value at the end of 2015, was just $177.4 million, weakens its capacity to help sustain critical public expenditure when oil prices decline. It also has the propensity to cause more borrowing by the government to plug revenue shortfalls.”

Source: Daily Guide - Samuel Boadi

 

 

 

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evans@ghanatoday.com (kwame) Business Tue, 16 Aug 2016 14:55:09 +0000