The Mahama-led government has asked the people of Ghana, through their representatives in Parliament, to approve a whopping GH¢865.78 million to finance the country’s development projects this year.
The Minister of Finance, Seth Terkper, who made the request on behalf of the president, whilst presenting the country’s 2015 Mid-Year Review and Supplementary Estimates in Parliament yesterday, maintained that the government was seeking for the amount to enable it complete the on-going projects and also finance government machineries.
He told the Members of Parliament (MPs) in Accra that despite the net adverse impact of the fall in crude oil prices (and earlier gold and cocoa prices as well as major disruption in gas supply), the positive trend in performance of the economy is beginning to show.
“I am glad to note that our decision to enter into the IMF programme for Balance of Paymentssupport to build on the progress in the implementation of the government’s Home Grown Policies is beginning to yield dividends. Nonetheless, we will not be complacent at this stage,” he said.
These revised estimates, according to him, have been necessitated by domestic and longstanding global developments discussed in this statement.
The minister recalled that following the successful conclusion of negotiations on April 4, 2015, the Board of Directors of the IMF approved a 3-year Extended Credit Facility (ECF) Programme for Ghana, based on concrete prior actions the government was able to meet.
The overall purpose of the programme is to achieve fiscal consolidation for sustained macroeconomic stability as prelude into a robust growth era.
Informing about the progress made so far on the IMF Programme, Mr. Terkper stated: “Ghana received an amount of US$114.75 million immediately after the Board’s approval. This was the first tranche of the total amount of US$918 million expected to be disbursed in eight equal installments over the 3-year period as balance of payments support.
“The remaining seven (7) disbursements will be made after the observance of the performance criteria and completion of reviews under the Programme. Following the anticipated approval by its Board, we expect the release of the second tranche by the IMF soon.
“Given that these disbursements are performance-based, it is refreshing to note that at the conclusion of the first review of the Programme in June, the IMF Mission was satisfied that the Programme is on track.
“All the performance criteria were met except for the ceiling on central bank financing to the government, which was technically missed by a small margin. The Government is keenly observing this particular programme benchmark, given its implications for the overall financinglevels that have been recorded this year”, he stated.
Mr. Terkper was quick to say the bold measures they have taken since 2013 have restored confidence in the economy, resulting in the gradual and envisaged improvements in revenue performance and foreign exchange inflows.
“The sources of these foreign exchange inflows include budget support from our development partners, especially the World Bank, European Union and the African Development Bank”.
The renewed confidence and inflows are important for the stability of the Cedi. It is expected to remain relatively stable, given further inflows, such as the second tranche of the IMF support; additional development partner inflows; the Eurobond issue and proceeds from the cocoa syndicated loan.
Other more gradual flows expected from crude oil, gold and other exports will also boost reserves and contribute to the stabilisation of the Cedi, according to him.
Mr. Terkper assured Ghanaians that the government would not adopt a passive approach to issues relating to the value of the currency, stressing: “We will continue to focus on this subject matter with short term as well as structural measures, as is characteristic of our transformational approach.
“Our short term measures will focus on intensifying reporting and monitoring of foreign exchange inflows, retention and use under our laws and agreements to ensure compliance and provide better information to the markets; enhancing monitoring of foreign exchange transactions, including speculative activities; continuing with Bank of Ghana SWAP and futures arrangements as well as more even utilization of its reserves; and rationalizing MDA/MMDA imports”. END
By Masahudu Ankiilu Kunateh
Source : http://thechronicle.com.gh
The Chronicle (Ghana)