Business News of Friday, 4 January 2013

Source: Daily Graphic

Major economic events of 2012

The year just gone by has seen some major activities that cut across several sub-sectors of the economy.

Anchored on the medium term development blueprint, the Ghana Shared Growth and Development Agenda (GSGDA), the year 2012, saw the implementation of key projects in the areas of agriculture, social services and infrastructure, electricity, infrastructure rehabilitation and expansion, oil and gas projects, investments in water and sanitation; as well as railways, roads and ports.

The private sector also delivered its part of the bargain with major projects that would serve the natural interest, while bringing returns to the investors.


Against the inflows that the government received from domestic economic activities and development partners, the expenditures on the various projects were estimated to lead to a real overall GDP growth of 9.4 per cent; (real non-oil GDP growth of 7.6 per cent); average inflation of 8.7 per cent; end-period inflation of 8.5 per cent; overall budget deficit equivalent to 4.8 per cent of GDP; and gross international reserves of not less than three months of import cover for goods and services.


On electricity, 2012 saw the continued implementation of the Ghana Electricity Development and Access Programme, which underpinned the electricity for all programme of the government.

The project involved the rehabilitation of energy distribution infrastructure in the country, including the refurbishment of old sub-stations and the construction of new ones, the replacement of certain obsolete equipment as well as the installation of certain modern and digitised electricity infrastructure to improve efficiency and check losses.

Oil and Gas

It was in 2012 that the construction of infrastructure to convey natural gas from the Jubilee Oil Field at Cape Three Points in the Western Region started. Construction works at the site for the gas processing plant located at Atuabo in the Jomoro District is currently progressing steadily. It is being funded by part of the $3 billion China Development Bank (CDB) loan, which has been signed by Parliament, with subsidiary agreements for the various projects being approved by the house one after the other.

Water and Sanitation

The government started the implementation of a project to provide 4,000 new boreholes countrywide as part of a plan to provide 20,000 boreholes over the next five years.

In addition, the government also sourced donor funding to provide 670 new boreholes, rehabilitate 400 existing boreholes, construct 20 new hand-dug wells, four small community pipe systems and 18 small town pipe systems, as well as rehabilitate 13 existing small town pipe systems.

The works for the Esakyire, Konongo-Kumawu-Kwahu Ridge Water project and Kumasi water expansion project, started in 2011 and continued in 2012.

However, the government could not finalise its attempt to source funding to complete the 4,720 government affordable housing projects at Borteyman, Kpone, Koforidua, Asokore-Mampong, Tamale and Wa, which were started by the previous administration.

Railways, Roads and Ports

Besides, drawing works for port expansion and tabling of various subsidiary agreements for a China Development Bank (CDB) loan, including the $800 million for port expansion and the construction of landing bays for fishing for about six coastal towns, not much was executed in the areas of ports and harbours.

The year 2013 is most likely to mark the beginning of serious implementation works to be funded by the CDB loan. These include the port expansion works.

On railways, the government created the Ghana Railways Authority, which is currently recruiting staff to start the implementation of ambitious railway infrastructure, rehabilitation and construction that is expected the oil the industrial revolution that beckons the economy?????.

The rehabilitation works include the Western Railway lines, linking them to the middle belt of Ashanti Region as well as the rehabilitation of the lines that link the Western Region to the Port city of Tema.


Agriculture used to be the mainstay of the economy of Ghana, accounting for more than 50 per cent of its GDP. However, this changed a couple of years ago after the economy was rebased, shrinking agric’s contribution to the economy to about 34 per cent.

Being a pro-poor sector, agriculture still enjoys a lot of the attention of governments. In 2012, the government advanced additional GH¢30 million to the Savanna Accelerated Development Authority (SADA), a major vehicle to change the face of agriculture and infrastructure of the three northern regions and parts of the middle belt.

According to the 2012 Budget, “in addition government will create an investment fund window for long term investment in the SADA zone; the government will raise an additional amount of GH?200 million as seed money for the SADA Investment Fund.”

The government also expanded the Agriculture Subsidy Programme to include liquid fertilisers (bio-fertiliser) and improved seeds, during which the Ministry of Food and Agriculture subsidised about 165,000 metric tonnes of chemical and liquid fertilisers.

The year also saw the continued implementation of the Youth in Agriculture Programme, particularly the cultivation of about 60,000 hectares of Block Farm across the country for the production of staples such as maize, cassava, rice, yam, sorghum and cowpea by 100,000 farmers.


Toward the fourth quarter of the year, the government also completed the biometric registration of the public sector workers to clean ghost names off government payroll.

Officials at the Ministry of Finance and Economic Planning (MoFEP) told the Daily Graphic that the biometric registration exercise was to collate a photo biometric register of government workers for the 10 regions to minimise payroll fraud and reduce government expenditure on personnel emoluments.

The 2012 budget estimated savings of about GH¢512 million from the biometric registration exercise and payroll audit.

The biometric data registration of government employees identified a lot of anomalies, including about 100 staff members on the payroll of the Ghana Education Service that have been assigned to two different persons.

The situation, some of which dates as far back as 2003, means either the 100 personnel work with different names, hence receive double salaries or there are 100 more personnel who have been receiving salaries wrongly.


Under the new pay reforms at the ministry, ministries, departments and agencies manage their own payrolls, and only forward vouchers to the Controller and Accountant General’s office to effect payment.

In the year just gone by (2012), personal emoluments were projected to end the year at about GH¢5 billion, 10.6 per cent higher than the 2011 budget estimate and about seven per cent of the total value of goods and services produced within the country, also known as gross domestic product (GDP).

This will be as a result of the full implementation of the Single Spine Pay Policy (SSPP) for public sector workers.

The government also implemented what is called the fiscal decentralisation programme which has been on the drawing board for decades. The policy allows local assemblies as well as ministries, departments and agencies to draw their own budgets, which are brought together in one composite document for a particular district or municipality.

This allows for decentralised spending and tracking of projects and expenditure.

To make for smooth implementation and close monitoring, the government has set up a Fiscal Decentralisation Unit within the Ministry of Finance and Economic Planning.

Millennium Compact

In February 2012, the country saw the successful completion of the $547 million United States Millennium Challenge Account (MCA) grant programme. Implemented by the Millennium Development Authority (MiDA) of Ghana, the programme saw a near 100 per cent disbursement of the funds to various infrastructural and agricultural projects.

The execution of the integrated compact saw the simultaneous development of three key activities, namely agriculture project; transportation project and rural development project.

Under agriculture, some of the achievements included the training of 67,000 smallholder farmers on agronomic and business practices; the rehabilitation and construction of four irrigation schemes that has now put 2,465 hectares of land under irrigation to ensure a sustainable exports sector.

The programme also implemented a pilot programme to register 2,500 rural land parcels for which a total of 1400 titles have been issued.

To cure post-harvest losses, the Millennium Challenge Account grant funded the construction of modern 1000 tonne privately managed Perishable Cargo Centre at the Kotoka International Airport in Accra, with storage and cold rooms to handle fresh agriculture produce.

In furtherance of efficient post-harvest handling, the programme also funded the construction of three public pack houses at Akorley, near Dodowa, and at Mariakrom and Otwekrom in the Akuapem South Municipal Assembly and the Gomoa East District respectively, to serve the needs of disadvantaged small holder farmers growing mango, papaya and pineapple for local and export markets.

There was also a component of the programme that channelled much-needed credit to farmers; provided information and communications technology solutions to all rural banks in the country for automation through wide and local area networks.

A total of 357.4 kilometres of feeder roads were also completed in the Northern, Eastern, Central and Volta regions to make for easy transportation of farm produce across the country and for export.

Perhaps, the one project that still endures in many minds is the Motorway Extension-Mallam express road, the N1 or the George Walker Bush Highway, which was about the last project to be completed under the compact.

Working over the last 30 months, we have completed the upgrading of 14.1 km into a three-lane dual carriage highway, costing US$173.2 million.

GSE’s parallel market for companies

In its quest to offer more companies the opportunity to use the capital market to raise funds for expansion, the Ghana Stock Exchange (GSE) started the process towards the establishment of a parallel market to be exclusively focused on businesses with potential growth.

To be christened the Ghana Alternative Market (GAX), the new market would accommodate companies at various stages of their development, including start-ups and existing enterprises, both small and medium.

Managing Director of the GSE, Mr Ekow Afedzie, said the move had come about as a result of the struggles many companies in the country went through in raising funds to expand.

According to him, the structure of the GAX was such that, listing on the market would afford companies the opportunity to secure long term capital, broaden their investor base and provide liquidity for their shareholders and investors.

Interbank electronic platform launched

The banking industry also recorded a significant milestone following the introduction of the interbank electronic platform that enables banks to carry out a number of services, including the ability of their customers to use one another’s automatic teller machines (ATMs).

The interbank switching and processing system, also known as “gh-link”, inter-connects switches of financial institutions and systems of third party institutions.

Chief Executive Officer of the Ghana Interbank Payment and Settlement Systems (GhiPSS), Mr Archie Hesse, said at the launch of gh-link in Accra that the success story was part of the programme to transform the country to become an electronic payment society.

He said globally, every country was leaning towards electronic payments because of the immense benefits they brought and that Ghana could not be left behind.

LESDEP trained 40,000

The Local Enterprises and Skills Development Programme (LESDEP) also said it had assisted 40,000 people in 2012 to upgrade their entrepreneurial skills and the programme was even more committed to helping more people in that regard in 2013.

The programme is a public-private partnership under the Ministry of Local Government and Rural Development to create local enterprises that will drive the creation of jobs and the economic growth of the country.

The training in technical and entrepreneurial skills helps the beneficiaries to establish their own businesses or improve upon the performance of existing enterprises.

The National coordinator of LESDEP, Mr Adam Gariba, disclosed this to the Daily Graphic in an interview, and noted that his outfit planned to train about 60,000 youth in 2013. The programme currently operates under 27 skills development modules which are based on the needs of the unemployed throughout the country.

Fund for housing in the offing

During the year under review, the Securities and Exchange Commission (SEC) also began the development of regulations to guide the establishment of a fund meant to help raise money from within the country to finance the construction of houses for the people.

It will be known as the Real Estate Investment Funds which will be floated on the Ghana Stock Exchange (GSE) for the public to buy.

The Director General of SEC, Mr Adu Anane Antwi, announced this at a seminar for members of the Institute of Financial and Economic Journalists (IFEJ).

He said “we are doing this because we believe that we can use the capital market to raise funds to undertake housing projects that can benefit all of us.”

Govt sets up PPP projects

The government’s efforts to speedily build the country’s infrastructure through partnerships with the private sector had a shot in the arm on March 27, 2012 following the approval of US$30 million from the World Bank to kick start the project.

The credit, the first phase of the PPP credit, is to improve the legislative, institutional, financial, fiduciary and technical framework to generate a pipeline of bankable PPP projects. Such bankable projects are essential to attract the private sector partnership with the government.

The government in 2011 adopted a new Public Private Partnership (PPP) policy with which it wanted to attract private sector investments into bridging the yawning gap in the country’s infrastructure, estimated at about US$1.5 billion annually for the next 10 years.

The World Bank Country Director for Ghana, Liberia and Sierra Leone, Mr Yusupha B. Crookes, said “Ghana is an important partner of the World and we are glad to be providing some of the funds needed to make this initiative possible.”

Grains Council to build 25 warehouses – in support of proposed GCX

The Ghana Grains Council (GGC) also continued the works on its planned 25 warehouses with the capacity of storing 30 tonnes of grains each in the three northern regions.

Six of such warehouses, which were inaugurated in Tamale, were part of a grand programme of the GGC, a private sector body, to certify warehouses which could be used as points of aggregation for farmers and traders.

Besides serving as guarantee markets for farmers, the warehouses will also play an important role in a well-functioning commodity exchange which the Ministry of Trade and Industry is pushing to establish by the close of the year.

The deputy Minister of Trade and Industry, Dr Joe Annan, extolled the achievements of the GGC and said they had a very important part to play in establishing a successful warehouse receipt system.