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Suffering@Ghana: Kufuor's Speech
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General News of Friday, 23 May 2008

Source: GNA

Suffering@Ghana: Kufuor's Speech

"Good Evening Fellow Ghanaians,

"Over the past few years, the entire world has been witnessing severe phenomenal developments and trends, some of which are traceable to natural causes and others to market forces. These are cumulatively generating turbulence with complex and far-reaching effects on practically all the nations of the world, including our own Ghana.

"Some of the impact is engendering rapidly escalating costs in the commodity markets around the world. A typical example is the uncontrollable rising costs of petroleum products and food.

"The whole world is concerned about these abnormal developments. Indeed, in many parts of the world, including some neighbouring countries in our sub-region, these harsh trends have led to dislocation of economies, rioting and strikes.

"At the just ended UNCTAD XII, which took place here in Accra last month, UN Secretary-General Ban Ki-Moon devoted much time to discussing the global food problem. Since then, he has set up a task force to take the necessary steps to assist countries most affected by the turbulence in the market.

"Thank God, because of its current strength and resilience, our national economy has managed to withstand the terrible shocks of the market so far.

"For this, credit must be given to the able, disciplined and far-sighted management of the economy of our country by the government backed by the Central Bank, over the past 7 years.

"The resilience stems in part from the strategic importance of achieving the completion-point of the HIPC initiative in 2004, and thereby freeing Ghana of indebtedness to the tune of about USD8billion from both bi-lateral and multi-lateral creditors.

"The economy's resilience stems also from the stabilization of the currency, and the rapid and substantial build up of reserves, which have increased the import cover from the low level of 2 weeks in the year 2001, to the current level of over 2 months.

"We must also not overlook the robust recovery of credit worthiness, which is recognized internationally. This was confirmed clearly last year by the over subscription of Ghana's Euro bond issue by USD3.2billion.

"In this regard too, we should pay tribute to our sister country Nigeria for according Ghana, during the first term of this government, supplier's credit for the import of crude oil covering 30,000 barrels per day on a 90-day credit basis, and currently, 60,000 barrels per day on a 30-day basis.

"Fellow Ghanaians, but for these pragmatic and far-sighted arrangements, our socio-economy would have long succumbed to the unfortunate circumstances that have befallen many countries within Ghana's development bracket.

"This is the background from which government has decided to engage the nation on the measures which I am bout to announce to mitigate the effects of the rising costs of petroleum products and food in the country.

"Over the past two years, the nation's crude oil import bill has risen from USD500million in 2005 to USD2.1billion as at the end of last year and is moving to USD2.5billion. And this is for the same quantity of oil. In November last year, the current budget was prepared on an estimated crude oil price of USD85 per barrel. Within the first quarter of this year alone this estimate has been overshot to beyond USD125 per barrel. As I speak to you now, the price is USD135 per barrel. The experts project that the price may rise as high as USD200 before the end of the year.

"Fellow citizens, obviously, this trend is throwing the budget out of gear, and nobody could have predicted this. This is the main cause of the swelling costs of transportation, utilities and food, which are making life difficult for everybody.

"In the face of these challenges, government has constituted a taskforce, which has been studying the situation on a continual basis so as to recommend such actions as would be necessary from time to time, until stabilization and normalcy are achieved. It is as a result of this that government has decided on the following measures for which the Minister of Finance has been directed to urgently seek parliamentary approval.

" First, import duties on rice, wheat, yellow corn and vegetable oil are removed. Importers are therefore enjoined to reduce prices accordingly. Indeed, it should be a criminal offence to attempt to re-export these items, which are being declared tax-exempt purposely for the benefit of the local market.

"The excise duty and debt recovery levy on premix oil are removed to assist our fishing communities.

"The excise duty and debt recovery levy on gas oil, kerosene and M. G. Local (Marine Gas Oil), are also being reduced. Dealers in these products and transporters should, therefore, reduce prices and fares accordingly to the benefit of consumers and passengers.

"Government has also decided to increase its support for the production cost of electricity to bring relief to domestic consumers.

"Government will subsidize the cost of fertilizer and ensure effective distribution to farmers to assure a good harvest.

"Fellow citizens, Government is already in consultation with its development partners to import and stock-pile additional supplies of rice and wheat to enhance food security.

"Fortunately, agriculture has done well over the past year as a result of which local staples like maize, yam, plantain, cassava and cocoyam are available in reasonable quantities even during this lean season.

"In addition to on-going policies and programmes, government is stepping up attention and investments in the sector. In this regard, it is directing the management of the Afforestation Programme to increase the planting of foodstuffs in the TUONJA demarcated areas around the country.

"The Aveyime rice project has been re-launched with vigorous planting of the nucleus farm. Local farmers are being encouraged to go into satellite farming in cooperation with the nucleus farm to boost locally produced rice.

"Further, the Ministry of Agriculture is directed to step up the supply of tractors at subsidized rates to farmers. It is also to accelerate the provision of small irrigation dams, and through its extension services oversee the supply of improved seeds and ensure an adherence to best practices among farmers.

"The Millennium Development Authority is also directed to accelerate the pace of implementation of the Millennium Challenge Account Programmes in all the selected districts.

"These measures need the support of all sections of our community for effective implementation. I am therefore appealing to all of you to rally behind government to ensure that our society goes through these difficult times with minimal stress.

"Fellow Ghanaians, even though these measures will involve cutting down on some of our development projects, I want to assure the entire nation that there will be no cut back on the policies designed to protect the vulnerable of society. Some of these are the School Feeding programme, the Capitation Grant, the National Health Insurance Scheme, the Metro Mass Transport, the National Youth Employment Programme and the Micro-Finance and Small Loan Scheme (MASLOC).

"Fellow citizens, in Ghana's current situation, the adage that there is a silver lining to every dark cloud holds true. Providence has been kind to us in the recent oil find, which has provided us with a bright light at the end of the tunnel. Pumping of the oil is programmed to start within the next two years. A carefully studied regulatory system to ensure transparent management is being prepared for parliamentary approval. Therefore, these difficulties of today should only be temporary. Let us therefore rally together confidently and look ahead into the future with hope and optimism.

"Thank you and may God bless us all.(End full text)."

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