Ghana will target economic growth of 8 percent in 2014 and will seek to trim its budget deficit to 8.5 percent of gross domestic product, Finance Minister Seth Terkper announced at a forum to discuss the 2014 budget presented to parliament. ?
He said, the discovery of oil and its exports in addition to gold and cocoa production have contributed immensely to the development of the nation?s economy. ?Mr. Terkper acknowledged that Ghana would overshoot its 9 percent deficit target this year, posting a gap of 10.2 percent of GDP, adding that this and a failure to achieve 2013 growth targets was as result of a fall in commodity prices and an energy crisis.
“This budget makes proposals for programmes that will improve the lives of our people in the context of our new emerging status,” Terkper said. ?He indicated that the budget as presented to the house of parliament will definitely require some sacrifices … but surely it will deliver the Ghana the government promised.
He explained that there is a 2014 inflation target of 9.5 percent, plus or minus 2 percentage points, after the country failed to maintain inflation under 11 percent in 2013 as planned. One challenge facing economic managers, he said, is to convince investors that the government is taking sufficiently radical action to curb the deficit and stabilize its macro economy. To help address the issue of complain of a high cost of living, government will establish a Ghana Infrastructure Fund to focus on strategic projects with private and multi-lateral funds.
“The intention of government is to consolidate the use of such commercial financing facilities to finance projects that can repay commercial loans that the government contracts directly or guarantees,” he said. Mining and oil are the two biggest sources of public revenue and officials argue that, in the medium term, higher oil production will help alleviate fiscal challenges. He averred that Ghana will target oil production from its offshore Jubilee field of 120,000 barrels per day (bpd) in 2014 versus an average of 102,503 bpd for the first nine months of 2013.
The government, he indicated, also plans to reintroduce a mining windfall tax bill after consultations, he said. A 2012 bill to impose a 10 percent profit tax was not considered by parliament. ?Ghana issued a second eurobond, worth $750 million, in July that aimed to refinance debt and pay for infrastructure. Debt equalled 52 percent of GDP at end-September,? Terkper said. ?He told participants at the forum that the 2014 Budget statement and Economic Policy of the governement is expected to announce plans to transform Ghana into a fully-fledged middle income economy.
Agriculture’s share of the national domestic productivity or gross domestic product (GDP) has been dwindlng over the medium term, with abysmal yearly performances. Agriculture’s share of GDP declined from 25 per cent in 2011 to 23.1 per cent in 2012, with its performance standing at 2.6 per cent in 2012 as against a target of 4.8 per cent growth rate. ?The budget and economic policy of the government is programme-based as opposed to the activity-based budgeting, which encouraged several projects running at the same time. ?He revealed that the ordinary Ghanaian can only realise the benefit of projects when they are completed.
?This is exactly what we want to use government resources for; as counterpart funding to release ongoing projects,” the source explained. ?The budget he indicated also targets social safety nets by increasing allocations to some of the existing social interventions such as the livelihood empowerment against poverty (LEAP), NHIS and those in education and transportation.