Ghana's Minister for pay and Economic Planning. Hon Kwadwo Baah-Wiredu on Thursday presented the 2008 budget statement to parliament in Accra. Highlights of the Budget Statement0. INTRODUCTIONThis report outlines the main highlights of the 2008 calculate Statement and Economic Policies of the Government of Ghana. The be of the inform is structured as follows. Section 1 presents the performance and achievements under the implementation of 2007 Budget while Section 2 highlights the 2008 calculate Targets and Outlook. Policy Initiatives are presented in Section 3. The report ends with Implementation Challenges under the 2008 Budget in Section 4.1. 2007 PERFORMANCE AND ACHIEVEMENTS1.1 Resolving the Energy CrisesA be of bunco medium and long-term interventions targeted at resolving the energy crises that assail the country this year and the later move of 2006 were pursued in 2007. Significant among them is the successful negotiation of the $622 million loan for the construction of the Bui dam and Bui City. The investment is the second largest hit investment in the history of the country after Akosombo Dam. To improve upon the generation transmission and distribution of electricity significant expenditures have been made since 2006 and by end-2008 government’s be budgetary expenses would have exceeded US$2 billion.1.2 Redenomination of the CediThe tip of Ghana on July 1. 2007 re-denominated the cedi by setting ten thousand cedis to one Ghana Cedi equivalent to one hundred Ghana Pesewas (i e. ¢10,000=Gh¢1=100Gp) to help remove the significant dead weight charge that the old cedi regime placed on the economy. This decide taken in the context of strong economic fundamentals and macroeconomic stability has already resulted in significant efficiency gains which are expected to compound the way we do business.1.3 Entry into Capital marketThe successful entry of Ghana into the Euro bond market is another unparalleled achievement this year. Government raised US $750m. Out of this. US$207.5 million has been earmarked for specific energy and road projects in 2007. The oversubscription of the bond together with the quality and internationality of the investors is a clear indication of the confidence that the international community reposes in the Ghanaian economy.1.4 Celebration of Ghana @ 50The country celebrated its fiftieth anniversary and successfully hosted the AU Summit and the AGOA conference in June and August respectively. The AU Summit in particular witnessed the highest turnout of Presidents and Heads of Government in recent times.1.5 Oil DiscoveryWith the country poised for accelerated growth a massive infusion of capital is required to initiate the necessary infrastructure to aid such growth. The discovery of oil in commercial quantities could therefore not have come at a more opportune time. A technical team has been constituted to initiate the necessary analysis of the impact of the oil discovery on the economy in the long term.1.6 New educational reformsThe new educational reforms which desire to alter upon our educational system in response to the needs and expectations of both individuals and industry was launched in 2007. A comprehensive package of reforms has been introduced with the main components including teacher upgrading and deployment attainment of gender parity the active promotion of science technology and research; and mainstreaming of pre-schools into the basic education system.1.7 DecentralisationAs a sign of government’s commitment to decentralisation the District Assemblies’ Common finance which has been pegged at 5 percent of tax revenue since 1993 was increased to 7.5 percent. Twenty-five (25) more districts have been created to aid exceed governance and accelerate the socio economic development of our districts.1.8 Fair Wages and Salaries CommissionThe Fair Wages and Salaries Commission has been constituted to administer a new comprehensive pay coordinate and ensure equity in the government payroll through a Legislative Instrument (Act 737) which was passed by Parliament this year. Government had earlier removed distortions and corrected placements on the Ghana Universal Salary Structure (GUSS). The ameliorate process is on-going with the obvious challenge of managing do work expectations particularly in an election year.1.9 National Youth EmploymentSeven (7) out of the ten (10) employment modules under the National Youth Employment Programme undergo been rolled out and are being implemented across the length and breadth of the country. A be of 107,114 youth undergo been engaged on the seven modules as at August 2007.1.10 Poverty trendsIn April 2007 the Ghana Statistical function published a book on the pattern and trends of poverty in Ghana from 1991 – 2006 which utilized data from the fifth go of the Ghana Living Standards analyse (GLSS 5). From the data provided it is evident that poverty has reduced significantly and Ghanaians are obviously better off today than they were seven years ago. The indicators show a downward trend in poverty from 39.5 percent in 1998/1999 to 28.5 percent in 2005/2006. We undergo halved extreme poverty relative to the 1991/92 levels ahead of the target date for the Poverty Goal under the MDGs. This achievement did not just come about; it was made possible through the discuss implementation of coherent and comprehensive policies and reflects the cause of increased government expenditure on poverty-reduction activities. Poverty-related expenditures increased from GH¢233.9 million in 2002 to GH¢1,237.4 million in 2006 representing 21.67 percent and 34.86 percent respectively of be government expenditure.1.11 bring in Domestic Product (GDP)Available data up to September 2007 and projections to end 2007 tell a provisional GDP growth of 6.3 per cent. 0.2 percentage points below the target of 6.5 per cent. Agriculture sector growth is projected at 4.3 per cent against a target of 6.1 per cent indicating a projected margin of 1.8 percentage points below the aim. This shortfall can be attributed to the erratic rainfall copy which swept the northern move of the country and a relative decline in the Fishing sub-sector as a result of dwindling fisheries resources. The Industry sector is projected to grow by 7.4 per cent a decline from the 2006 growth rates of 9.5 per cent. This is mainly due to the energy crisis. The Services sector which is not so dependent on electricity is projected to change at 8.2 per cent exceeding the 6.7 per cent aim by 1.5 percentage points. Apart from the displace. Storage and Communication sub-sector which grew below the 2006 aim the other sub-sectors exceeded the 2006 outturn. The wholesale and retail change and financial sub-sectors exceeded their targets.1.12 InflationHeadline inflation measured as year-on-year changes in the consumer price index which began the year at 10.9 per cent stood at 10.1 per cent at the end of October 2007 after peaking at 11.0 per cent in May 2007.1.13 Interest RatesIn the money market arouse rates followed a generally downward turn during the period. Deposit Money Banks add up deposit rates trended upwards while the average lending rate were generally unchanged narrowing the arouse evaluate spread. The 91 day Treasury account and 182 day Treasury account declined by 53 and 61 basis points to 9.8 per cent and 10.2 per cent respectively. The tip of Ghana fix evaluate also remained at 12.5 per cent during.
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