Dev't Partners Commend Ghana's Economic Performance

Accra, Dec. 16, GNA - The World Bank Country Director, Mr. Mats Karlson and Ghana's Development Partners have commended the government for the prudent economic measures that have led to significant improvement in most of the country's economic indicators.

They, however, cautioned the government to continue to work within its budget in order not to erode the fiscal gains made this year.

The Development Partners made these comments during the Mini Consultative Group Meeting held in Accra on Friday December 12, 2003.

The meeting convened by the Ministry of Finance and Economic Planning was to provide the government an opportunity to brief Ghana's Development Partners on the performance of the economy. The main focus of this meeting was, however, on the on-going restructuring and policy reforms in the Energy Sector.

A statement the Ministry of Finance issued in Accra said, "the meeting brought together about 65 heads of missions of Ghana's development partners, ministers, officials of the Bank of Ghana and other high-ranking public officials.''

The World Bank Country Director said the development partners have observed how the growth path was accelerating, the fiscal management was paying off, inflation was moving downward toward a single digit, improvement in the agricultural sector as well gains in the Ghana Poverty Reduction Programme.

In an overview of the Monetary, Exchange Rate and Balance of payment situation, Dr Paul Acquah, Governor of the Bank of Ghana said fiscal objectives for 2003 would be achieved, including most probably, the zero net domestic borrowing target.

He said this year fiscal deficit was cut, with a robust tax revenue growth, debt relief and disbursement from donors was close to amounts pledged by donors, and budgetary spending and planned reductions in arrears remained within targets.

For 2004, the Government said BOG would set up a Central Securities Depository in Ghana. The Depository would have the capacity to bring together in one location, securities listed on the Ghana Stock Exchange, over the counter securities, Government securities, mutual funds and unit trust.

He added that the bank was introducing a number of reforms in the wholesale market for government securities, including a primary dealers code of conduct.

"These reforms together should bring to the domestic financial market increased efficiency and transparency, reduce transaction costs, ensure broad-based participation of individuals on both competitive and non-competitive basis with greater security of title, and increase secondary market activity".

Dr. Samuel Nii-Noi Ashong, Minister of State, for Finance and Economic Planning gave an over-view of the economy and the direction of economic policy and assured the development partners that next year, the government would continue to work within the budget even through it is an election year.

"As we gear towards the election, it is an assurance the Minister makes on behalf of the Government that the excesses of the 1992, 1996 and 2000 will not be repeated running up to the elections of 2004''.

"It will indeed be a tragedy for Ghana to reverse the gains we have painfully achieved over the last three years because of partisan considerations, only to return in 2005 to commence yet another round of cleaning up the mess,'' he emphasized.

Dr Paa Kwesi Nduom, Minister of Energy in a presentation gave the assurance that the Energy Sector Reform programme was on course to make the sector more efficient and financial viable.

The reforms, he said, were also to create an environment for private sector participation, adding that the sector required considerable funding for the reforms to be successful and invited the development partners to invest in the sector.

Mr Giancarlo Izzo, Italian Ambassador to Ghana said the Ghanaian economy was ready for such support to enable small enterprises to make their contribution to the country's development.

He said economic freedom through the contribution of enterprises was necessary for democracy to thrive.

Mr Izzo appealed to banks that would take part in the scheme to revise their interest rates downwards to facilitate an increase in the number of SMEs and growth in the economy.

Mr Sam Dzotepe, Business Development Manager, Africa Project Development Facility collaborating partners in the scheme, said there could be no meaningful development without support for SMEs.

He said APDF would lend its support to SMEs by helping them prepare good feasibility studies, teach them financial and production management so as to generate the cash to pay back the credit granted to them.

Dr Samuel Nii Ashong, Minister of State at the Ministry of Finance and Economic Planning said government is working out a plan to bring all interventions in support of SMEs under one canopy to ensure the necessary synergy.