BUDGET: Govt committed to accelerate economic growth

Accra, Nov. 16, GNA - Mr Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning, on Thursday declared Government's commitment to work towards accelerated growth and lift the development agenda of the country with the main aim of meeting the Millennium Development Goals (MDGs) for the attainment of a middle income status by 2015.

"Against this backdrop, Government will continue to source new financing at the least cost possible, to support the financing needs for productive public investments," Mr Baah Wiredu stated in the Government's fiscal policy for 2007 as outlined in the Budget. Mr Baah-Wiredu explained that as at the end of September 2006, Government had contracted 19 new concessional loans from multilateral and bilateral sources totalling US$482.0 million to undertake projects in various sectors.

The sectors include Water, Communication, Sanitation, Transport and Agriculture whiles commitments by creditor category showed that 65.0 per cent of the total amount contracted was from multilateral institutions, with the remaining 35.0 per cent coming from bilateral sources. Reading the 2007 Budget at the floor of Parliament amidst screams, shrieks and bawls from either the Majority in support or the Minority in opposition to with occasional shouts of Order! Order! Order from the Speaker, Mr Baah-Wiredu said the Government had adhered to the strategy of borrowing at the least cost possible.

Mr Baah Wiredu explained that new loans were contracted with a minimum grant element of 35 per cent stressing that from an average rate of 80 per cent in 2004, the grant element, which defines the concessionality of a loan, declined marginally to 76.2 per cent by September 2006.

On Grants, he said the Government's strategy was to seek more grants than loans to control the growth in public external liabilities, noting that significant progress had been made in terms of the number and quantum of annual commitments.

"As at the end of September, 2006, a total of 34 grants amounting to US$ 774.9 million had been contracted. This represents about 221.6 per cent increase over the 2005 amount of US$240.96 million". In terms of aid type, programme grants five out of the 34 amounted to about US$ 235.0 million, representing about 30.3 per cent of the total grant committed.

=93The sectoral distribution of these commitments demonstrates government's commitment to improve the infrastructure base to drive its growth and development objectives' he said.

In the Transport Sector, Mr Baah Wiredu said the Driver and Vehicle Licensing Authority (DVLA) registered a total of 42,181 new motor vehicles during the period under review as compared with 36,501 vehicles registered during the corresponding period of 2005, indicating a 15.6 per cent growth.

In proportional terms, private motor vehicles accounted for 34.2 per cent. The others were as follows: commercial vehicles (26.8 per cent); motorcycles (21.9 per cent), buses and coaches (8.3 per cent), rigid cargo and articulator trucks together (6.5 per cent), while agricultural equipment, such as combine harvesters, construction equipment and mining equipment together accounted for 2.2 per cent. Mr Baah Wiredu said a total of 1,349,644 tonnes of cement were produced during the first eight months of 2006, against 1,276,571 tonnes produced during the corresponding period of 2005, thus indicating a 5.7 percentage point growth in cement output.

On employment, sample job market data on vacancies showed an increase of 12.5 per cent at a total of 6,788 job vacancies were advertised in the Daily Graphic compared with 6,033 vacancies announced during the same period of 2005, suggesting an increase in job openings advertised.

He said cumulative job vacancies from January to September 2006 indicated that the vacancies on sectoral basis showed that around 85 per cent of the vacancies came from the services sector. Within the services sector, education accounted for 28.4 per cent of the total vacancies, wholesale and retail trade 11.03 per cent and Transport, Storage, and Communication 9.2 per cent.

Mr Baah Wiredu said the industrial sector, led by manufacturing accounted for 14.2 per cent with agric accounting for less than 1 per cent, "the lack of reliable information on employment not withstanding, these trends in job vacancy announcements reflected, in part, the signalled and revealed demand for labour services by various establishments in the last few years".

He said for the first nine months of the 2006 fiscal year, the overall Budget balance showed a deficit of A25,059.5 billion (4.4 per cent of GDP) compared with a deficit of A23,643.0 billion (3.8 per cent of GDP) in the corresponding period of 2005. The domestic primary balance also recorded a deficit of A23,739.7 billion (3.3 per cent of GDP) compared with a surplus of A2653.3 billion (0.7 per cent of GDP) in the same period of 2005.

He said the details of the fiscal performance for the first nine months of the implementation of the 2006 Budget, and the projections to the end of 2006 showed that total receipts amounted to A231,929.7 billion, against the out-turn of A223,723.7 billion registered for the same period during 2005.

This shows a 34.6 per cent increase over the out-turn for the corresponding period of 2005. The relatively high out-turn of total receipts recorded is mainly due to receipts from the Multilateral Debt Relief Initiative (MDRI) totalling A21,826.4 billion. He said for the year 2006 as a whole, total receipts are projected at A241,357.1 billion, showing an out-turn of 4.9 per cent below the budget estimate of A243,468.2 billion. 16 Nov. 06