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UPDATES: Finance Minister presents #Budget2019 Statement to parliament

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Finance Minister Ken Ofori Atta presenting the 2019 Budget Statement and Economic Policy of the Government of Ghana to Parliament.

The budget represents the third of four budget statements of the government. It, therefore, offers us an opportunity to take a mid-term review of the performance of the Government in managing the economy and how we intend to accelerate the programme of growing the economy, protecting the vulnerable, and creating jobs and prosperity for the Ghanaian people over the next financial year.
That’s according to Ghana’s Finance Minister, Ken Ofori Atta on Thursday, November 15, 2018.

The 2019 Budget is on the Theme: “A stronger economy for jobs and prosperity”

Exiting the IMF programme is a great achievement towards fiscal sovereignty but not from eternal fiscal discipline; expenditures on SHS is expensive but a responsible investment that provides incalculable future returns on our greatest asset – our children – the next generation of Ghanaians who will inherit the future that we create today.

“We are now on course to exit the IMF programme by the end of this year. It has been a collective effort by all of us––Government, for exercising the kind of macro-economic competence and discipline that was evidently lacking in the past; and, the people for their patience, understanding, and keeping faith with their government.”

“The programme may have had its critics because of the constraints it imposed. But it was a necessary pill because by 2014, the government then had lost its fiscal discipline and had very little choice but to seek the bailout. We are grateful to the IMF and are determined to maintain a combination of economic discipline and vibrancy that will ensure that we will not have to be rescued in that manner in the future.”

The fiscal deficit was reduced from 9.3 percent of GDP in 2016 to 5.9 percent of GDP in 2017 (the first time since 2006 that a government has met the deficit target), it is at 2.8 percent of GDP in June 2018 within the target of 4.5 percent of GDP in December 2018;

Inflation declined from 15.4 percent in 2016 to 11.8 percent in 2017 and now stands in single digits at 9.8 percent (September);

The Bank of Ghana Monetary Policy Rate saw a year-on-year reduction from 25.5 percent by end-2016 to 20 percent by end-2017 and currently stands at 17 percent. This is the longest 18-month reduction in the monetary policy rate since 2001;

Interest rates on the 91-day treasury bills declined from 16.8 and now stands at 13.4 percent;

Ghana’s trade position with the rest of the world has strengthened.

The trade account recorded a deficit of US$1.4

Improved significantly to a surplus for the first time in two decades to US$1.1 billion as at June 2017 and another surplus of US$1.1 billion as at June 2018;

Our gross international reserves increased from $6.2 billion in December 2016 (3.5 months of imports) to US$7.3 billion as at June 2018 (3.9 months of imports);

Ghana’s debt to GDP ratio which increased from 32 percent in 2008 to 73.1 percent in 2016 declined for the first time since 2007 from 73.1 percent of GDP in 2016 to 67.3 percent in June 2018; and

For the first time in almost a decade, Standard and Poor’s (S&P) upgraded Ghana’s Sovereign Credit rating from B negative to B with a stable outlook, in September 2018. 20.

These are remarkable achievements which we are determined to build on in order to improve the lives of Ghanaians.

A budget that delivers on the hopes and expectations of Ghanaians;

A budget that speaks to the needs of hardworking Ghanaians;

A budget that enables us to face the future with confidence;

A budget that reflects Government’s commitment to building human capital through improvements in health and education;

A budget that continues to deliver on job creation;

A budget that provides opportunity for wealth creation;

A budget that follows through on our promise to protect the public purse;

A budget that small businesses will be happy about;

A budget that enjoins our citizens to uphold the Republic and to at all times fulfil their civic duties as citizens of the Republic;

A budget that promotes our commitment to the Sustainable Development Goals (SDGs), and takes fundamental steps towards Ghana Beyond Aid.

This will be the first budget in Africa and second in the world, after Mexico to fully integrate the SDGs framework, enabling us to track our financial performance in order to ensure progress on these important targets that affect lives of our fellow Ghanaians.

Mr. Speaker, our 2018 “Adwuma” Budget aimed to build on our 2017 “Asempa” Budget achievements and put the country back to work; to grow the economy, create jobs and improve the lives of Ghanaians.

Economic growth remains strong, and we are on track to achieve our key macroeconomic targets for 2018 and the medium term.

This is progress we can all be proud of. 23.

MMDA’s

“In 2019, the central Government will partner MMDAs to enhance revenues mobilised at the local Government level. This
partnership will be in the following areas:

● property registration, and property data management;
● the use of a simplified inexpensive tool for property valuation;
● the setting up of a system for the generation and distribution of bills; and
● the setting up of a system for the efficient collection of property rates and other rates.

In additions, the Ministry of Finance will strengthen its oversight over public revenue management in our MMDAs.

An electronic payment platform will be put in place to automate the collection and administration of rates in all local government entities and to give central government a comprehensive view of the finances of MMDAs.

Internally Generated Funds of MDAs: improved governance of internally generated funds of ministries, departments, agencies and all statutory and constitutional bodies is still top of government priority.

The Budget Statement and Economic Policy of the Government of Ghana for the 2019 Financial Year provided for in the new Fees and Charges Bill that will be placed before Parliament before close of the year, the fees and charges of all MDAs and regulators will come under greater scrutiny of Central Government.
At the moment, some MDAs receive their fees and charges through commercial banks that lodge these revenues in full at the BoG.
The BoG then transfers the appropriate amounts to the relevant MDA.
In 2019, government will expand this arrangement to all fees and charges on behalf of the MDAs and regulators.
Government’s digitisation and Cashless initiative continues. All Government Entities will be able to receive electronic payments by the end of next year.
This is a pre cursor to all Government Entities making payments electronically on the journey to the Government going cashless. This will greatly increase transparency and efficiency of cashflows to and from
Free SHS:

“The Akufo-Addo Government has eased the burden of hundreds of thousands of Ghanaians and invested in the future of our children with the introduction of the Free Senior High School program. For the first time in our history, the whole of Ghana is enjoying Free SHS.”

“Under free SHS, students are entitled to; Free Meals (Both boarding and day) Free boarding accommodation Free textbooks.

“The Akufo-Addo Government has eased the burden of hundreds of thousands of Ghanaians and invested in the future of our children with the introduction of the Free Senior High School program. For the first time in our history, the whole of Ghana is enjoying Free SHS.”

“Under free SHS, students are entitled to; Free Meals (Both boarding and day) Free boarding accommodation Free textbooks.

The Free SHS in 2017 provided over 90,000 additional teenagers an opportunity to get senior high school education and improve their opportunities for work in the future.

In 2018, as a result of the innovative double track system, we have been able to accommodate 181,000 more students who otherwise could not have access to secondary education.

The introduction of free SHS has also provided immediate cash benefits to the parents: For a parent with a boarding SHS student, you save GH¢2,015.22 For a parent with a boarding TVET student you save GH¢ 2,115.22 and over a 3-year period a parent with a boarding SHS student would have saved nearly GH¢ 6,045. (or about 60 million old Cedis).

The savings is about 120 million old Cedis if you have 2 children going through the free SHS.

“We increased the school feeding programme from 1.6 million children to 2.1 million children, and also increased the amount spent on each child by 25 percent. 268.

Social Intervention Programmes:

In the area of LEAP, we have added more than 150,000 households to the programme thereby improving their livelihoods.

Furthermore; we have increased the share of the DACF to persons with disabilities from 2 percent to 3 percent.

We have more than doubled the Capitation Grant (From GH¢4.5 to GH¢10.0)

We have Restored Teacher Training Allowances. We have Restored Nursing Training Allowances.

We have reduced Electricity tariff – 17.5 percent for households and 30 percent for businesses.

“Days of ailing NHIS behind us National Health Insurance Scheme renergised All arrears of NHIS since 2014 paid”

“We have cleared the GHC 1.2 billion arrears inherited under the NHIS and the NHIS is working again.”

“We have provided food crop farmers with subsidised (50 percent subsidy) fertiliser under the planting for food and jobs program. This has resulted in increased output and lower food prices.”

“88,00 gov’t jobs created.  NABCO is largest job creation policy in Ghana”

“We have provided jobs to 100,000 graduates under the Nation Builders Corps (NABCO) across every constituency in Ghana Expanding Social Security Coverage to the Informal Sector.”

Retirement income security is a right of every Ghanaian and not only formal sector workers.

His Excellency, the President has demonstrated his commitment to expanding social security to cover the informal sector by charging the Board of SSNIT to ensure the inclusion of informal sector workers.

I am pleased to announce Mr. Speaker that SSNIT is working with Government to develop a policy framework to provide informal sector workers with a voluntary fully funded personal pensions scheme to be launched in 2019.

Ghana Beyond Aid:

We are on track to successfully complete and exit the IMF ECF programme. We have clearly demonstrated our competence in managing Ghana’s economy in the past two years that we have been in Government.

We will remain steadfast in this resolve. To this end we are putting in place a number of legal and institutional measures to ensure we do not revert to the bad days of macroeconomic mismanagement.

One of the key measures we are institutionalising is the Social Partnership among Organised Labour, Ghana Employers Association, and Government which we believe will provide avenue for the partners to deliberate on significant development matters and providing relevant solutions.

Further, the 6 Strategic Pillars in the 2019 budget put us in a position to advance boldly towards Ghana Beyond Aid.

In this budget we are: making an unprecedented push in infrastructural expansion; modernising agriculture, increasing production, and reducing our dependence on imports for food; forging ahead with a bold and comprehensive industrialization plan that adds value to our agriculture and natural resources, and leverages our rising population of educated youth; strengthening our domestic revenue mobilization and taking strong measures to enforce efficiency in public expenditures and protect the public purse; and building on and strengthening our social interventions in order to ensure that no one is left behind as we transform our economy and march boldly to a Ghana Beyond Aid.

“Mr. Speaker, the future is indeed very bright as we embark on big ticket projects and programmes as part of our resolve to transform the economy and better the lives of Ghanaians.”

We are implementing the Sinohydro project which will provide additional US$2bn in road, rail, and other infrastructure; the Aker oil Field will start producing in 2021 and will eventually add about 100,000 barrels of oil per day to Ghana’s crude oil production.

In addition, ExxonMobil is coming on board soon to explore and produce crude oil in the Deep Water Cape Three Points; o the Ghana Integrated Aluminium Development Corporation (GIADEC) will be established to develop an integrated aluminium industry; Ghana is attracting international car manufacturing giants such as Nissan, Volkswagen, SinoTruk to set up auto assembly plants to produce vehicles.”

“The President constituted a Committee to draw up a Ghana Beyond Aid Charter.

The Committee comprises representatives from a wide cross-section of Ghanaians, including Government, organised labour, the private sector and employers, and the youth.

Work on the Charter and on the detail contours of the Ghana Beyond Aid agenda is well advanced, and the Committee will present its report to the President before the end of the year.

Following that there will be consultations with Ghanaians before revising the Committee’s work for eventual submission to Parliament for debate.

MASLOC:

“In this budget, we have invested in MASLOC so that small businesses up and down the country can have additional cheaper access to credit. We were also challenged that in looking at the past and into the future we could not ignore the urgency of today—the development and delivery of electricity, inputs for agricultural expansion, health care and better roads and infrastructure.”

“2019 is a budget that better enables us to balance the decisions of the past and the needs of today with the pillars and foundation needed to build a better tomorrow.”

“We also recognize that building national prosperity is not the exclusive domain of Government.”

“If, we are to win in pushing Ghana Beyond Aid then every single one of us must own it; be citizens in developing our nation and not just mere spectators with strong opinions only as our contribution. I thank all the productive communities of Ghana and all Ghanaians for the epic sacrifices and contributions you make every day. I particularly”

Health Sector:

The Government would secure 275 ambulances for each of the 275 constituencies.

The University of Ghana Medical Centre (UGMC) phase one has commenced; while Parliament has approved a-50 million dollar-loan for Phase Two.

Ho Regional Hospital to be upgraded to a Teaching Hospital status, while Hohoe Municipal Hospital to become a Regional Hospital.

The Government intends to construct 15 Community-based Health Planning Systems (CHPS), in the following regions: Brong Ahafo – five, Eastern- three, Western-three, Ashanti – two and Greater Accra – two.

Additionally, the Western Region is to benefit from a district hospital and five polyclinics, while four district hospitals in the Easter Region are to be equipped with state-of-the-art medical equipment.

They are at Aburi, Kyebi, Atibie and Mampong.

Incentives for business

Government has announced plans to pay more attention to production of goods and services; instead of increasing taxation to rake-in revenue, and ensure reduction in electricity tariffs.

It would also review the Income Tax Band from above GHc10,000 at 35 per cent to above GHC20,000 at 30 per cent.

It will also implement the withholding tax policy on small scale mining, support the textile industry by extending the tax stamp policy to imported textile products.

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