ghananlpcommunity/ghana-gov-speeches-sentences huggingface dataset:
The net result of this strategy should reduce the rollover/refinancing risk and broaden the range of instruments offered in the domestic market.
It is important to recognize that re-profiling does not add to public debt and it remains our expectation that this august House, especially, will be united in supporting Government efforts to re-profile a significant proportion of our national debt stock.
Liability Management and the Re-Profiling Programme Mr.
Speaker, the re-profiling programme of domestic debt, which involved extension of tenor and issuance of longer dated bonds, has been largely successful.
We issued the first 15-year bond in April and issued a second 7-year bond.
Provisional interest savings arising from Government implementation of the liability management programme by re-profiling domestic debt is estimated at GH¢612 million for 2017.This re-profiling will not add to thedebt stock by year-end but rather replaces existing debt as per the gross financing requirements.
Speaker, over the past few years, as a result of a culmination of a chronically high and rising public debt and unsustainable debt burdens, risks such as roll-over and refinancing our debt has confronted us as a country.
Speaker, for example, on a weekly basis, about GH¢1 billion of already contracted domestic debt was maturing.
In fact, that means about GH¢4 billion of domestic debt matures per month at a time when our tax revenue per month is just about an average of GH¢ 2.2 billion.
This then meant that we would have had a problem of refinancing this maturity.
We would have had to stop salary payments and all government expenditures for the 2017 fiscal year, in order to pay back this debt.
Even that one would still would not have been enough as it barely covers 50 percent of the maturing bill.
Consequently, Government chose the option of reprofiling the maturing domestic debt because the domestic debt more so than the external debt posed the greatest risk to the debt portfolio at this time.
Therefore, the strategy for 2017 was to issue long-term bonds which have an elongated tenure instead of 91-day Treasury bills which are issued on a weekly basis and as such mature on a weekly basis.
The reprofiling replaces these short-term maturing bills with a new long-term domestic loan.
Consequently, we issued about GH¢9.0 billion to reprofile the maturing domestic debt.
This amount is different from the regular budget financing of the deficit.
As this amount is replacing already existing debt and future maturing debt, it means that, the reprofiling transaction does not add on to the domestic debt.
The benefits so far have been instrumental for macroeconomic stability.
There has been a reduction in the mix of short to long-term loans.
The stock of the 91-day bill declined on a cumulative basis by about 7.95 percent and 13.95 percent for first and second quarters, respectively.
On the other hand, the 182-day bill also declined cumulatively by about 17.57 percent and 34.27 percent for first and second quarters, respectively.
This is good news as it would reduce the pressure to refinance the monthly GH¢4 billion maturities of domestic bond.
A major expected impact from the reprofiling operation is a reduction in interest rates.
Over the period under review, interest rates on all marketable instruments have declined significantly despite the relatively high monetary policy.
The 91-day T Bill rate has fallen significantly from 16.73 percent in 2016 to around 11.93 percent in June 2017.
The 182-day T-bill rate has also declined from 17.64percent in December 2016 to around 12.9 percent as at end of June 2017.
The 1 year, 2 Year, 3 Year and 5 Year Bonds all declined from 21.00 percent, 22.50 percent, 24.00percent and 24.75percent as at end 2016 to 15.00percent, 17.00percent, 18.50percent and 18.75percent respectively.
The reprofiling has also led to an extension of Tenor with the Issuance of the first 15-year bond and is currently the longest dated Domestic Bond.
As at last year, the longest dated domestic bond was 10 years.
In addition, a second 7-year bond was issued in April 2017.
The yield curve at the primary issuance of domestic bonds has also improved significantly compared to the trend in recent years.
Following the reprofiling exercise, the savings from interest cost is estimated at GH¢612 million.
Speaker, this is a significant performance, considering that interest payments have been increasing in recent times.
Energy Sector Legacy Debt Mr.
Speaker, the huge pile up of arrears in the Energy sector continues to impact negatively on our economy.
It stifles the capacity of players in the power sector to keep our lights on; it denies the banks liquidity, and, in all, frustrates economic activity and growth.
That was why streamlining the Energy Sector legacy debt was made a priority policy initiative in the 2017 Budget Statement.
As indicated, revenue streams from the Energy Sector Levies Act (ESLA) will beused to ensure certainty of cash flows for the payment of all corresponding debts.
Speaker, in this regard, two Joint Lead Managers (JLM) have been appointed to establish a Special Purpose Vehicle (SPV) to issue a domesticmedium-to-long term Energy Bond by securitizing the ESLA receivables.
Implementation of the Credit Risk Assessment Framework Mr.
Speaker, as stated in the Budget Statement and Economic Policy of government, the financial state of SOEs continues to be of concern.
Government has started the implementation of Credit Risk Assessment Framework (CRAF) in observance of the provisions of the PFM Law.
This framework helps to determine, largely, the ability of SOEs to repay their debt obligations.
In this regard, SOEs seeking government support in the form of guarantee and/or on-lending facilities are evaluated through the CRAF framework before any request is granted.
The implementation of this measure is to ensure that SOEs will remain creditworthy over the medium to long term after the restructuring of the energy sector debts.
SECTION FOUR: REVISED 2017 MACRO-FISCAL FRAMEWORK Mr.
Speaker, since the presentation and approval of the 2017 Budget Statement and Economic Policy by this august House in March, there have been some developments, both externally and domestically which have necessitated a revision in the 2017 Fiscal Framework.
Consistent with section 28(2)(D) of PFM Act, we present the revised budget for the rest of the 2017 fiscal year.
The revised assumptions for the 2017 Mid-Year Review, relate specifically to non-oil tax revenues and non-oil related expenditures.
Speaker, following the performance of non-oil tax revenues for the first six months of the year, the assumptions underlying the projections for some tax types, namely, Corporate Income Tax (CIT), Import VAT and Import Duty are being revised.
Together, these amount to GH¢1.5 billion (0.7 percent of GDP).
Speaker, these revisions have mainly been informed by lower than anticipated Corporate taxesand lower import volumes for the first sixmonths of the year.
Even though the trend is expected to improve, we still find it prudent to revise the projections downwards.
Speaker, unlike the practice in the recent past where government expenditures have actually increased in the face of declining revenues we are now in a regime where spending is based on recognised revenues and expected receipts.
To ensure that we do not compromise our fiscal consolidation objectives and targets, expenditures are planned to match the downward revision in revenues.
The downward revision in revenues and expenditures as well as reclassification of inflows from the sale of shares have resulted in the revision of the fiscal deficit target from 6.5 percent of GDP to 6.3 percent.
These revisions are consistent with our fiscal and debt sustainability objectives.
Speaker, being mindful of the high debt burden which has arisen largely because of high fiscal deficits in the past, the revision of the fiscal deficit further demonstrates our commitment to fiscal discipline.
Speaker, going forward we will strengthenthe implementation of revenue measures to ensure that we meet our revised revenue targets.
To ensure that the fiscal objectives and targets are not compromised, we will make the necessary downward adjustment to discretionary expenditures in the event that we are not able to meet our revenue targets.
Revisions to Total Revenue and Grants, and Expenditure Mr.
Speaker, Total Revenue and Grants has been revised downwards by 0.9 percent of GDP from GH¢44.5 billion to GH¢43.1 billion.
As earlier stated, the revision to total Revenue and Grants emanates from revisions made to Corporate Income Tax, Import VAT, Import duty as well as the reclassification of expected non-tax revenue inflows from the sale of government shares of GH¢500 million as financing.
Speaker, total Expenditure has also been revised downwards by 1.1 percent of GDP from GH¢58.1 billion to GH¢55.9 billion, as shown in Appendix Table 5 .
The key revisions to expenditures include: 0.4 percent of GDP (GH¢867.0 million) adjustment to Goods and Services; 0.3 percent of GDP (GH¢553.2 million) reduction in total transfers to Other Government Units, which comprise all statutory and earmarked funds; and 0.3 percent of GDP (GH¢683.0 million) adjustment to Capital expenditure.
Speaker, despite the measures being taken to ensure that we maintain fiscal discipline, government remains strongly committed to growing the economy and delivering services to our people through strategic allocation and efficient use of resources.
Our flagship programmes such as the Free SHS, NHIS, School Feeding, LEAP, Planting for Food and Jobs etc.
will be protected.
Overall Balance and Financing Mr.
Speaker, following these adjustments, the overall fiscal balance is expected to improve from a deficit of GH¢13.2 billion (6.5 percent of GDP) to GH¢12.8 billion (6.3 percent of GDP).
Total financing of the deficit will comprise a net foreign repayment of GH¢1.3 billion while Net Domestic Financing (NDF) will amount to GH¢14.1 billion.Mr.
Speaker, the resulting primary balance from the adjustments in revenue, expenditures, and financing is a primary surplus equivalent to 0.2 percent of GDP.
Gross Domestic Product Mr.
Speaker, even though the projected real GDP growth of 6.3 percent for 2017 has not been revised, the nominal GDP has been revised downwards from GH¢203.41 billion to GH¢202.01 billion, reflecting mainly the revision of the deflator downwards.
Speaker, based on the above considerations, the revised macroeconomic targets are summarised below: Overall GDP growth rate is maintained at 6.3 percent with nominal GDP revised slightly to GH¢202.01 billion from the original projection of GH¢203.41 billion; non-oil GDP growth rate maintained at 4.6 percent; end-year inflation rate is maintained at 11.2 percent; overall fiscal deficit has been revised downwards from 6.5 percent of GDP to 6.3 percent of GDP; primary balance has been revised from a surplus of 0.4 percent of GDP to a surplus of 0.2 percent of GDP; and Gross Foreign Assets to cover at least 3 months of imports of goods and services, remains the same as originally programmed.
Speaker, these revisions are consistent with government’s resolve to grow the economy and create jobs while maintaining macroeconomic stability through fiscal discipline and prudent economic policies.
We will strengthen our collaboration with the private sector to address issues such as tax, energy, and cost of credit that impede their growth and expansion.
Speaker, as a demonstration of our commitment to fiscal discipline, government has taken a decision to introduce a numerical fiscal rule to guide the implementation of fiscal policy.
In this regard, we will bring to this house an amendment to the PFMA to limit the fiscal deficit within a range of 3 to 5 percent of GDP for any fiscal year.
SECTION FIVE: IMPLEMENTATION HIGHLIGHTS OF THE 2017 BUDGET Mr.
Speaker, please permit me to now provide you with updates on implementation of some of the major programmes for the 2017 fiscal year.
Planting for Food and Jobs Programme Mr.
Speaker, in fulfilment of our promise to Ghanaians, we launched the ‘Planting for Food and Jobs’ programme to increase production, ensure food security as well as create jobs.
As at June, 2017, about 185,907 farmers, out of a total of 200,000 farmers targeted for the 2017 cropping season, were registered.
The farmers are being provided with seeds, fertilizers and extension services to improve their yields.
During the same period, a total of 56,028 bags of improved seeds of maize, rice, soybean and sorghum, as well as 22,904 sachets of onions, tomatoes and pepper were distributed to beneficiary farmers across the 10 regions of Ghana.
An additional 16,808 bags of improved seeds of maize, rice, soybean and sorghum, and 22,968 sachets of onions, pepper and tomatoes will be distributed before the end of the year.
Speaker, over 1,896 hectares of maize, rice, soybean, sorghum, onion, pepper and tomatoes are under cultivation.
An additional 569 hectares will be cultivated before the end of the year to bring the total to 2,465 hectares.
Speaker, fertilizer is also being provided at a subsidized rate of 50 percent to participating farmers.
I am happy to announcethat, the reports we are receiving suggest that the fertilizer is getting to its intended beneficiaries and at the reduced price.
Beneficiary farmers pay 25 percent of the subsidized price before collection and 25 percent after harvest.
As at June 2017, a total of 61,568.05mt (1,231,361 bags) out of 156,000mt (3,120,000 bags) was supplied, representing 39.47 percent of the target.
Distribution of fertilizer is on-going especially in the 3 northern regions.
Speaker, a total of 822 agricultural extension personnel trained by the Agricultural Colleges, who had been unemployed, were recruited and posted to 187 districts across the 10 regions of the country.
Speaker, Government has initiated the following actions to improve the marketing of agricultural produce: Linkage to institutional buyers (MDAs, Grains and Legumes Development Board (GLDB), Poultry Farmers, Licensed Agents, etc.
); Restructuring of Grains and Legumes Development Board (GLDB) to absorb operations of National Buffer Stock Company (NAFCO) and facilitate the purchase of produce from farmers; Restoration of existing warehouses – COCOBOD sheds, NAFCO warehouses to provide storage space for agricultural produce; Provision of warehouses in designated districts; and Aggregator-led business model - Involvement of aggregators in nucleus out-grower schemes to help address bottlenecks in produce marketing by farmers.
Speaker, plans are also afoot to address the challenges associated with the supply of agriculture inputs and machinery.
Government is procuring various agricultural machinery such as tractors, power tillers, slashers, mechanical planters, boom and vineyard sprayers, motorized sprayers, combine harvesters, irrigation kits, green houses, and grain dryers, which will be distributed to the farmers before the end of the year.
Speaker, the incidence of the fall army worm invasion which was first reported in April 2016, posed a challenge to increased food production.
Atotal of 112,812 hectares of crops were infested, out of which 14,411 hectares were severely affected.
The most affected crops were maize and cowpea.
Government responded by setting up a National Taskforce and sub-committees to create awareness and take steps to control the spread of the menace.
Over 74,000 litres of various chemicals were procured and distributed to all the 216 districts in the country to control the infestation.
Farmers are being educated on early detection of the fall army worm invasion.
Speaker, the Ministry will continue to sensitize and create awareness among the farmers and the general public and also manage the pest in abandoned heavily infested fields, which could serve as breeding grounds for re-infestation.
The Ministry is also establishing a national pest surveillance system.
The President’s commitment to supporting farmers to feed the country and improve their own lives is very much on course.
Cocoa Mr.
Speaker, Ghana’s cocoa output, which was over 1 million tonnes in 2010/11 crop year, declined to an average figure of 830,000 tonnes per annum in the past five years.
It is the objective of the Government to reverse this declining trend and increase production to more than 1 million tonnes per annum, within the next four years.
Speaker, in this regard, Ghana Cocoa Board has rolled out the artificial pollination programmes which are aimed at increasing productivity of cocoa farmers from an average yield of 450kg/ha to over 1,000kg/ha.COCOBOD has trained and deployed 10,000 hand pollinators to assist farmers.It is projected that 24,000 hectares of farms will be pollinated in 2017 with an expected increase to 30,000 hectares in the next three years.
Speaker, in view of the effects of climate change and the associated harsh weather conditions, COCOBOD is promoting irrigation among cocoa farmers.
This has the potential to increase cocoa production and to ensure high survival of transplanted cocoa seedlings.
Irrigation systems are being set up around the cocoa stations and piloted on cocoa farms around the cocoa stations for effective monitoring and evaluation.
Private sector companies with experience in irrigation in cocoa farms are leading the process with close collaboration of Cocoa Health and Extension Division (CHED) and Seed Production Division (SPD).
Speaker, in light of estimated 22 percent of the country’s current cocoa tree stocks classified as over-aged/moribund or CSSVD infected, COCOBOD with support from Government continued the Cocoa Rehabilitation Programme.
Speaker, COCOBOD also reformed the Mass Cocoa Spraying to involve greater private sector participation and farmer ownership.
Speaker, Ghana and Côte d'Ivoire produce about 60 percent of the world's cocoa and face common challenges in production and marketing of the beans.The individual country specific solutions are not sufficient to remedy these challenges.
Speaker, under the determined leadership of His Excellency Nana Addo Dankwa Akufo-Addo and his Ivorian counterpart, the Ghana-Côte d'Ivoire Cooperation has been renewed and energized leading to a meeting in April 2017 in Abidjan and followed by a second meeting in Accra in June 2017.
The meetings have set out the framework of the cooperation and worked out details of its implementation.
The implemented decisions and initial successes so far include a common strategy, anti-smuggling initiative, a funding arrangement to undertake critical projects in both countries increasing use of cocoa butter equivalent (CBEs) formation of a new producer organization.
Education Mr.
Speaker, a Ghanaian student is eligible to benefit from the Free SHS policy if he/she writes the Basic Education Certificate Examination (BECE) from 2017 and is placed by the Computerized School Selection and Placement System (CSSPS) into a publicly funded second cycle institution.
Beneficiaries of this Government scholarship will enjoy it for a period of three years.
Foreigners are excluded from the Free SHS.
Speaker, to ensure that the poor and the vulnerable are not left behind, students from disadvantaged backgrounds will be considered for placement.
To prepare them adequately for a successful SHS programme, special in-school tuition will be provided for them.
Additionally, 30 percent of vacancies in elite schools will be reserved for students from Public Junior High Schools.
Speaker, government is taking the necessary steps to ensure that the quality of education is not compromised as a result of the implementation of the Free SHS programme.
In this regard, a number of interventions have been outlined as part of the implementation of the programme.
Notable amongst them are the following: Provision of four core textbooks for all first year students; Rationalization of teacher deployment and training at the SHS level; Optimization of instruction time by extending the school day as well as the number of instructional days; Establishment of robust school inspection and accountability systems; and One hot meal a day for day students.
Health Restoration of Health Trainee Allowance Mr.
Speaker, the government planned to restore health trainee allowance in 2017 starting with the 2017/18 academic year.
All health trainees in public training institutions will receive allowance starting September 2017.
The Ministry of Health has made provision of Gh¢149million to pay for the four months ending December 2017.
This will enable the health trainees concentrate on their education, reduce hardship especially on students from vulnerable and poor families and avoid disruptions in the school curriculum system.
Restructuring of the National Health Insurance Scheme Mr.
Speaker, the NHIS has undergone several changes since its inception.
At the time this government took office, the scheme was facing challenges in claims management (e-claims), delays in processing of claims, coupled with other challenges in the administration and management of the NHIA.
The government promised to restructure the NHIS and make it more efficient and effective.
Speaker, a committee has been put in place to review the report and put together a plan for restructuring the scheme.
Leap Implementation Mr.
Speaker, presently the LEAP programme has 213,048 household in all 216 districts in all ten regions of Ghana.
Out of the 213,048beneficiary households, 193,920 beneficiaries are registered and receive payment on the Ezwich platform operated by the Ghana Interbank Payment and Settlements System.
The remaining beneficiary households are in the process of being registered onto the Ezwich platform.
Total payment made from January to 31st July 2017 isGH¢56,317,670.94.The Government is currently working on a productive and financial inclusion strategy to facilitate the graduation of LEAP beneficiaries from the cash transfer programme.
School Feeding Programme Mr.
Speaker, the concept of the Programme is to provide children in selected public kindergartens and primary schools in deprived areas of the country with one hot, nutritious meal per school day, using locally grown foodstuffs.
The immediate objectives of the programme are: Increasing school Enrolment, Attendance and Retention Reduce Hunger and malnutrition Boost Domestic Food Production The long-term goal is to contribute to poverty reduction and food security in Ghana.
Currently, the programmer feeds 1,671,777 children in 5,530 schools in all 216 districts and provides employment for over 4,730 caterers.
Speaker, achievements for the year include, the development of an effective linkage of the programme with farmer based organisations; development of a new caterer engagement contract, bye-laws and constitution, to govern caterer associations and operations and a strategic plan to enhance collaboration among stakeholders at the district level.
Speaker, the energy sector, particularly the electricity sub-sector, has been a major challenge to the growth of the economy in the past years before we took over the administration of the country.
The difficulties and unstable electricity supply had created significant constraint on industrial production and socio-economic activities in the country.
Besides stabilizing the electricity supply, Government has made significant progress with respect to the interventions that were promised in the 2017 Budget Statement.
Government has taken steps to deal with the financial difficulties in the sector.
Cabinet has approved the implementation of the Cash Waterfall Mechanism (CWFM), which, together with the Energy Legacy Debt restructuring programme, is intended to resolve the perennial cash flow difficulties in the energy sector.
Steps are being taken to implement the CWFM immediately.
Speaker, we inherited a power sector which had contracted so many power purchase agreements (PPAs) well beyond the country’s demand with the potential to exacerbate the already dire financial crisis in the sector.
As promised by His Excellency the President in the 2017 State of the Nation Address (SONA), Cabinet is deliberating on a Strategy Paper submitted by the Ministry of Energy towards rationalizing the PPAs to ensure some least-cost power generation capacity additions.