Business News of Thursday, 24 February 2005
The 2005 Budget has projected a 5.8 per cent growth in Real Gross Domestic Product (GDP), a target that was achieved in 2004, Minister of Finance and Economic Planning, Mr Kwadwo Baah-Wiredu told Parliament on Thursday.
Mr Baah-Wiredu, who was presenting the 2005 Budget Statement, said agriculture, was expected to grow at a 6.5 per cent and make a contribution of 41 per cent to GDP.
The following are the highlights of the 2005 Budget
- Industry is to grow at 5.8 per cent to contribute 24.5 per cent to GDP.
- Services Sector would contribute 5.4 per cent.
- Inflation is expected to be at 13.5 per cent by the end of December 2005.
- Gross international reserves would be maintained at four months' of import.
- Domestic Primary surplus equivalent to 2.4 per cent of GDP.
- Overall budget deficit would be equivalent to 2.7 per cent.
- Internal Revenue Service is expected to increase its share of revenue mobilisation from 30.7 per cent in 2004 to 32.1 per cent.
- The Value Added Tax Service (VAT) would maintain its 26 per cent share while that of Customs, Excise and Preventive Service would fall marginally at 35.6 per cent from 37.7 per cent in 2004
- Priority areas would be Human Resource Development through education;
- Private Sector Development; envisaging agriculture based human development and infrastructure development.
- Government has allocated 150 billion cedis to the Ministry of Works and Housing as seed money to construct low-cost houses throughout the country.
- It is expected that 2,000 housing units would be provided over a two-year period
- Selected commodities to be supported include maize, rice, mango, citrus, soybean and cashew.
- 350 million cedis would be given to all districts for investments in these selected areas.
- Protein intake would be improved through support for aquaculture and the breeding of small ruminants.
- Up to 15 billion cedis allocated for the Council for Scientific and Industrial Research (CSIR) to undertake Apicultural Research.
- 50 billion cedis from the HIPC resources would be disbursed into the rural electrification fund.
- National Reconstruction Levy down to 7.5 per cent from 10 per for Part A companies, five per cent from 7.5 per cent for Part B companies; 3.5 per cent from five per cent for Part C companies while all other companies would pay 1.5 per cent from 2.5 per cent.
- National Health Insurance Scheme to be operational by second quarter.
- Corporate tax reduces from 32.5 per cent to 28 per cent.
- Implementation of ECOWAS Common External Tariff.
- Extension of exemption of listed securities from capital gains tax.
- Government to support commercialisation of research.
- Establishment tomato processing and promotion centre at Techiman.
- Introduction of a National Assets Register.
- Reduction in personal income tax burden.
- Improvement and expansion of mass transport services to other regions.
- Rehabilitation of Accra-Tema railway line and introduction of train services.