2018 budget statement
Ken Ofori-Atta, Finance Minister
SECTION ONE: INTRODUCTION
Rt. Hon. Speaker, Honourable Members of Parliament, on the authority of the President of the Republic, Nana Addo Dankwa Akufo-Addo, I beg to move that this Honourable House approves the Financial Policy of the Government of Ghana for the year ending 31st December 2018.
On the authority of the President, and in accordance with Article 179 of the 1992 Constitution, permit me to present to this august House, the Budget Statement and Economic Policy of the Government of Ghana for the 2018 financial year.
I also submit to this august House The 2017 Annual Report on the Petroleum Funds, in accordance with Section 48 of the Petroleum Revenue Management Act, 2011 (Act 815), as amended.
Mr. Speaker, this year has been a very busy one for all of us. This is the third Budget we are presenting in the year. The first one was in March, the second, the mid-year performance review and now, we are presenting the 2018 Budget. During this period, we have had the cooperation of this house in passing a number of bills in our determined efforts to put the economy back on a sound footing. On behalf of the President, I wish to thank this august house for all the support.
Mr. Speaker, in March when I presented the ‘Asempa’ Budget, I indicated to this House our commitment to take deliberate, strategic steps, with the required discipline, to fix the economy.
Such was the crisis that we were expected to do little more than borrow more to incur more debt but not for the purpose of growing the economy but rather for servicing a fast-increasing debt. Thankfully, President Akufo-Addo came into office with a positive mindset and inspired us all to see the invisible, feel the intangible and achieve the impossible.
I am happy to note that we have turned the economy around and our policies are yielding results, restoring hope and bringing relief to Ghanaians. Personally, it is heart-warming when a parent runs up to you and says “thank you” for putting money in her purse, because she did not have to pay Gh¢2,000.00 for her two children in SHS; or when an excited teacher trainee shows you the text message notification of her allowance received. Yet, these are just two examples of the promises some said were impossible to fulfil.
Mr. Speaker, we resolved to be fiscally disciplined and respect the limits this august House set for us within Appropriation. Again, I am glad to report that we are well on course to end the year with a fiscal deficit of 6.3 percent; in fact, lower than the 6.5 percent contained in the budget. If I may add, Mr Speaker, this is only the second time in a decade that a government has managed to stay within its budget deficit target.
Mr. Speaker, a lot has been achieved by the Government of President Nana Akufo-Addo and we have achieved in one year what seemed impossible in 8 years. We have: restored macroeconomic stability renewed confidence in the economy provided reliable electricity supply returned to robust growth, with a real GDP growth of 7.8 percent in the first half of 2017, against 2.7 percent in 2016 reduced inflation; end-October inflation of 11.6 percent from 15.4 percent end-December 2016. maintained stability of the cedi against the US dollar, and brought down policy rate to 21 percent from a peak of 26 percent in 2016. There is more, Mr Speaker. We have: normalized the domestic yield curve issued the country’s maiden 15-year bond in April 2017 improved external balances, driven by higher export earnings and lower imports improved gross international reserves to US$7.2 billion, equivalent to 4.1 months of imports cover improved primary balance to 0.3 percent surplus in September 2017 against a deficit of 1.6 percent in September 2016 received positive sovereign rating reviews from international ratings Agencies: Fitch, B/stable; Standard & Poor, B-/positiv completed the 4th IMF/ECF program review, and achieved positive developments in the oil & gas sector – favorable ITLOS ruling, and Sankofa producing 1st oil three months ahead of schedule.
Mr. Speaker, our commitment is to solidify these gains for as long as we remain managers of the economy. To ensure irreversibility, we are implementing the following measures to tackle some of the long-term structural issues:
capping of the statutory funds at 25 percent of government tax revenues operationalization of the Treasury Single Account (TSA) to consolidate all government funds at the Bank of Ghana tightening of expenditure controls in GIFMIS to minimize inefficiencies and budget overruns strict enforcement of the PFM Act, as well as the Public Procurement Act, to ensure efficiency in public procurement, and adoption of the competitive tender process, which is eliminating wastage and giving Ghanaian taxpayers real value for their money.
We have successfully refinanced the first tranche of the energy sector legacy debt through the issuance of the first ever energy bond by E.S.L.A. Plc. I am pleased to announce that this successfully raised GHS4.7 billion, (over $1 billion) the highest ever in Africa. We have also introduced the ‘Cash Waterfall Mechanism’ to prevent new debt accumulating.
Mr. Speaker, I am proud to report to this august House that after a few months of intense preparation, the Akufo-Addo Government has: rolled out the destiny-changing free Senior High School policy across all public schools to ensure equal opportunities for every Ghanaian child rolled-out the National Digital Property Addressing System to provide a unique address for all properties in Ghana Launched the National Identification Scheme; and Restored the teachers and nurses training allowances.
Mr. Speaker, this year, we have restored macroeconomic stability, which is protecting the value of money in the pockets of ordinary Ghanaians and giving businesses the predictability space to plan and invest, thereby sowing the seeds for economic growth and jobs creation. The broad agenda for next year is to translate the stability achieved into shared growth with aggressive policies aimed at creating more opportunities for jobs.
The President is determined to reverse the trend of the last few years where businesses operated merely and mainly to service loans, pay taxes and electricity bills. In line with this, for 2018, we will continue to stabilize the economy, offer reliefs, including reducing electricity tariffs to make the private sector truly competitive and create more employment.
Our job creation agenda will be driven by investments in (i) Human Capital, (ii) Strategic Infrastructure, (iii) Agriculture and (iv) Agribusiness, (v) Entrepreneurship and (vi) Innovation Programmes.
Specifically, we will vigourously continue with and heavily invest in our key policy initiatives and flagship projects, such as: Planting for Food and Jobs Stimulus Package for distressed industries One District One Factory Zongo Development Fund National Entrepreneurship and Innovation Programme Free SHS National Identification Scheme, and National School Feeding Programme
Mr Speaker, we have prioritized investments in these areas to ensure that we establish a fair and inclusive society, which creates life-transforming, productive opportunities for every able Ghanaian.
We are confident that these priorities will not only deliver jobs, but will improve the security and wellbeing of Ghanaians and communities across the country by increasing agricultural growth and development, providing decent work through skill and entrepreneurship development and industrialization, as well as increasing opportunities for all through the provision of quality education and health delivery.
Mr. Speaker, our policy priorities for 2018 and beyond promise two vital ingredients for any serious progressive society: opportunity and prosperity. For us the fight against poverty and unmepl
Ken Ofori-Atta, Finance Minister
SECTION ONE: INTRODUCTION
Rt. Hon. Speaker, Honourable Members of Parliament, on the authority of the President of the Republic, Nana Addo Dankwa Akufo-Addo, I beg to move that this Honourable House approves the Financial Policy of the Government of Ghana for the year ending 31st December 2018.
On the authority of the President, and in accordance with Article 179 of the 1992 Constitution, permit me to present to this august House, the Budget Statement and Economic Policy of the Government of Ghana for the 2018 financial year.
I also submit to this august House The 2017 Annual Report on the Petroleum Funds, in accordance with Section 48 of the Petroleum Revenue Management Act, 2011 (Act 815), as amended.
Mr. Speaker, this year has been a very busy one for all of us. This is the third Budget we are presenting in the year. The first one was in March, the second, the mid-year performance review and now, we are presenting the 2018 Budget. During this period, we have had the cooperation of this house in passing a number of bills in our determined efforts to put the economy back on a sound footing. On behalf of the President, I wish to thank this august house for all the support.
Mr. Speaker, in March when I presented the ‘Asempa’ Budget, I indicated to this House our commitment to take deliberate, strategic steps, with the required discipline, to fix the economy.
Such was the crisis that we were expected to do little more than borrow more to incur more debt but not for the purpose of growing the economy but rather for servicing a fast-increasing debt. Thankfully, President Akufo-Addo came into office with a positive mindset and inspired us all to see the invisible, feel the intangible and achieve the impossible.
I am happy to note that we have turned the economy around and our policies are yielding results, restoring hope and bringing relief to Ghanaians. Personally, it is heart-warming when a parent runs up to you and says “thank you” for putting money in her purse, because she did not have to pay Gh¢2,000.00 for her two children in SHS; or when an excited teacher trainee shows you the text message notification of her allowance received. Yet, these are just two examples of the promises some said were impossible to fulfil.
Mr. Speaker, we resolved to be fiscally disciplined and respect the limits this august House set for us within Appropriation. Again, I am glad to report that we are well on course to end the year with a fiscal deficit of 6.3 percent; in fact, lower than the 6.5 percent contained in the budget. If I may add, Mr Speaker, this is only the second time in a decade that a government has managed to stay within its budget deficit target.
Mr. Speaker, a lot has been achieved by the Government of President Nana Akufo-Addo and we have achieved in one year what seemed impossible in 8 years. We have: restored macroeconomic stability renewed confidence in the economy provided reliable electricity supply returned to robust growth, with a real GDP growth of 7.8 percent in the first half of 2017, against 2.7 percent in 2016 reduced inflation; end-October inflation of 11.6 percent from 15.4 percent end-December 2016. maintained stability of the cedi against the US dollar, and brought down policy rate to 21 percent from a peak of 26 percent in 2016. There is more, Mr Speaker. We have: normalized the domestic yield curve issued the country’s maiden 15-year bond in April 2017 improved external balances, driven by higher export earnings and lower imports improved gross international reserves to US$7.2 billion, equivalent to 4.1 months of imports cover improved primary balance to 0.3 percent surplus in September 2017 against a deficit of 1.6 percent in September 2016 received positive sovereign rating reviews from international ratings Agencies: Fitch, B/stable; Standard & Poor, B-/positiv completed the 4th IMF/ECF program review, and achieved positive developments in the oil & gas sector – favorable ITLOS ruling, and Sankofa producing 1st oil three months ahead of schedule.
Mr. Speaker, our commitment is to solidify these gains for as long as we remain managers of the economy. To ensure irreversibility, we are implementing the following measures to tackle some of the long-term structural issues:
capping of the statutory funds at 25 percent of government tax revenues operationalization of the Treasury Single Account (TSA) to consolidate all government funds at the Bank of Ghana tightening of expenditure controls in GIFMIS to minimize inefficiencies and budget overruns strict enforcement of the PFM Act, as well as the Public Procurement Act, to ensure efficiency in public procurement, and adoption of the competitive tender process, which is eliminating wastage and giving Ghanaian taxpayers real value for their money.
We have successfully refinanced the first tranche of the energy sector legacy debt through the issuance of the first ever energy bond by E.S.L.A. Plc. I am pleased to announce that this successfully raised GHS4.7 billion, (over $1 billion) the highest ever in Africa. We have also introduced the ‘Cash Waterfall Mechanism’ to prevent new debt accumulating.
Mr. Speaker, I am proud to report to this august House that after a few months of intense preparation, the Akufo-Addo Government has: rolled out the destiny-changing free Senior High School policy across all public schools to ensure equal opportunities for every Ghanaian child rolled-out the National Digital Property Addressing System to provide a unique address for all properties in Ghana Launched the National Identification Scheme; and Restored the teachers and nurses training allowances.
Mr. Speaker, this year, we have restored macroeconomic stability, which is protecting the value of money in the pockets of ordinary Ghanaians and giving businesses the predictability space to plan and invest, thereby sowing the seeds for economic growth and jobs creation. The broad agenda for next year is to translate the stability achieved into shared growth with aggressive policies aimed at creating more opportunities for jobs.
The President is determined to reverse the trend of the last few years where businesses operated merely and mainly to service loans, pay taxes and electricity bills. In line with this, for 2018, we will continue to stabilize the economy, offer reliefs, including reducing electricity tariffs to make the private sector truly competitive and create more employment.
Our job creation agenda will be driven by investments in (i) Human Capital, (ii) Strategic Infrastructure, (iii) Agriculture and (iv) Agribusiness, (v) Entrepreneurship and (vi) Innovation Programmes.
Specifically, we will vigourously continue with and heavily invest in our key policy initiatives and flagship projects, such as: Planting for Food and Jobs Stimulus Package for distressed industries One District One Factory Zongo Development Fund National Entrepreneurship and Innovation Programme Free SHS National Identification Scheme, and National School Feeding Programme
Mr Speaker, we have prioritized investments in these areas to ensure that we establish a fair and inclusive society, which creates life-transforming, productive opportunities for every able Ghanaian.
We are confident that these priorities will not only deliver jobs, but will improve the security and wellbeing of Ghanaians and communities across the country by increasing agricultural growth and development, providing decent work through skill and entrepreneurship development and industrialization, as well as increasing opportunities for all through the provision of quality education and health delivery.
Mr. Speaker, our policy priorities for 2018 and beyond promise two vital ingredients for any serious progressive society: opportunity and prosperity. For us the fight against poverty and unmepl
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