Movement For Development Hails Hon Kwabena Duffour


Movement for Development, a Non Governmental Organisation has commended Hon Dr. Kwabena Duffour, Minister for Finance and Economic Planning for his remarkable contribution in the management?of the economy over the past four years of his administration.


Through the adaption of comprehensive program of fiscal consolidation and macroeconomic stability by his office, imbalances inherited from the previous administration have been addressed. Fiscal deficit according to the movement has been reduced, inflation?kept at a single digit, comfortable levels of international reserves?maintained and exchange of the domestic currency?stabilized.

G.D.P which stood at 8.8% between 2009 rose to 14.4%, making Ghana the fastest growing economy in the sub-sahara, with? G.D.P pprospects since 2012 remaining positive backed by the? Ghana statistical services provisional figure of 7.1%.

The movement maintained that provisional data on the budget for the year gives an overall fiscal deficit of GH8.1 billion, equivalent to 11.2% of G.D.P, against a target of GH4.7billion or 6.7% of G.D.P.The deficit they indicated was caused by excess spending on wages arising form the implementation of the single spine Pay policy, increases in debt servicing cost and rising subsidies of fuel and utilities, which together amount to 3.1% of G.D.P.

Unbudgeted payments also contributed 2.2 %of G.D.P to the deficit?without which?would have been 5.9%.
Inflation standing at 18.1% in December 2008 and 20.7% in June 2009 as a result of spill-over of the 2008 inflationary pressures dropped to 9.3% in November 2012. “Inflation has since remained?a single digit for 30 consecutive months through sound monetary policy” the movement noted.
Speaking at a press briefing in Kumasi, the executive secretary of the movement?Emmanuel Opoku Mensah underscored?Bank of Ghana to have maintained tight monetary policy through successive adjustments in its policy rate?to help stabilize prices and promote ecomomic growth.The Bank he noted raised the policy rate from 17% in 2008 to 18% in 2009. As the inflationary pressures subdued. The policy rates generally declined, boosting credit to the private sector in real terms. The interest rate on 91- days? Treasury bill declined from 24.7% at the end of 2008 to 10.3% at the end of 2011.

Emmanuel?Opoku Mensah further disclosed that?since the last quarter of 2011. The Bank of Ghana has been adjusting the policy rate and reviewing their reserve requiremtns to stem the pressures on the foreign exchange market. As?at the end of November 2012, the policy rate stands at 15% and the 91-day Treasury bill, 2.3 percent. Commercial banks’ lending rates however have remained stubbornly high, declining slowly from 27.3% in 2008 to 25.7in November 2012.

The Banking sector he brought to light has similarly witnessed s substantial growth in asset size over the last four years and has become stronger in terms of solvency, liquidity and profitability. The recapitalization?? requirement of Banks ended in Decembrer 2012?with all Banks complying with the minimum requirement?of GH60million. Commercial Banks non-performing loans with peaked at 16.1% in 2010 has also declined to 13.1% at the end of November 2012

The Lowering of global growth projections and the associated global uncertainties could adversely affect the domestic economy through the trade and finance channels. On the domestic front, he indicated that liquidity injections to responfd to the fiscal pressures would potentially feed into exchange rate pressures and pose challenges to macro stability.
The Secretary of the Movement has therefore called on government to continue pursuing measures aimed at fiscal consolidation and sustaining the macroeconomic stability. This he stressed requires that?utility and fuel subsidies?are renewed early in 2013 and the sustainability of the wage bill carefully assessed.

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