Government has presented to Parliament, a proposal to secure up to US$1.5 billion long-term financing for GETFUND on the back of a portion of VAT receivables as prescribed in Act 581, and which will be issued in three (3) tranches of US$500.00 million.
Finance Minister Ken Ofori-Atta disclosed this before Parliament when he presented the 2019 Budget Statement on Thursday November 15, 2018.
The amount he said will be used for critical education infrastructure, especially to complete the numerous uncompleted buildings in secondary and tertiary institutions around the country.
Government will also commence work to upgrade 10 Technical Universities Polytechnics and 13 Technical Institutes with modern equipment and also train selected lecturers of these institutions.
On technical and vocational education he said ‘’To further develop the TVET sub-sector, we will commence the construction of 20 state-of-the-art TVET Centres as well as upgrade and retool 34 Vocational Training Institutes in 2019. In addition, two new centres in foundry and machining will be constructed.’’
On Science and technology the Minister said ‘’Mr. Speaker, as part of its drive to promote Science, Technology, Engineering and Mathematics (STEM) education across all levels, Government will in 2019 roll out the BSTEM programme in 7,000 basic schools across the country; construct 10 STEM Centres; initiate the development of a knowledge cloud to make educational materials content accessible to all; and provide multimedia laboratories as well as internet connectivity to cover many more schools.’’
In the area of Youth and Sports Mr Ofori-Atta said ‘’Mr. Speaker, in 2018, Government also cut-sod for the construction of a multi-purpose Youth Resource Centres in every region of the country. Construction work has started at all the sites and are at various levels of completion. The centres will provide space for youth engagement, recreation, centres of learning and sports. 151. Mr. Speaker, Under the Zongo Development Fund, five Astro turfs (with spectator stands and dressing rooms) were 97 97 | The Budget Statement and Economic Policy of the Government of Ghana for the 2019 Financial Year constructed at Madina, Kyebi and Walewale. In addition, five recreational parks were completed for use at Bolgatanga, Salaga, Yeji, Tafo-Kumasi and Akim Oda.’’
As part of efforts to mitigate accommodation and housing deficit in the military, the government has taken steps to continue the Social Security and National Insurance Trust (SSNIT) Housing Projects at various Garrisons in Accra, Tema, Ho, Tamale and Sekondi Takoradi, and expects completion in 2019, Minister of Finance Ken Ofori-Atta has said.
Delivering the budget statement today [Thursday] November 15, 2018, the Minister disclosed to the House that the first phase of the four 16 units Housing Projects under the Barracks Regeneration Project will be completed and commissioned before the end of this year.
The second phase will commence in 2019, he announced.
The second phase of the Security Agencies Housing Project comprising 368 housing units for the Ghana Navy has been completed. The Phase III comprising 320 housing units for the Ghana Police Service has commenced and will continue in 2019.’’
In August this year, Vice President Dr. Mahamudu Bawumia announced that as part of the $2 billion barter trade bauxite venture signed with Chinese Sinohydro Group, 10,000 housing units are expected to be constructed for security personnel across the country.
He said this at a sod-cutting ceremony for the construction of 320 housing units at the Ghana Police Training School, Tesano, Accra.
“10,000 housing units for the security agencies are also expected to be constructed under the Infrastructure for Bauxite barter arrangement between the Government of Ghana and Sinohydro Corporation/the Chinese Government negotiated by the Vice President as part of his official visit to China last year.” He said.
“The 10,000 housing units for the security services under the Sinohydro project will be the largest single undertaking of its kind since independence, Vice President Bawumia announced at the ceremony, held at the National Police Training School at Tesano, Accra on Monday 13th August 2018.” He added
The 320 housing units costing $45million to be constructed by Amandi Holdings will contain 112 two-bedroom apartments, and 208 three-bedroom apartments and the project is expected to start this year.
Government has pledged to invest heavily in road infrastructure railways and air transport, from a variety of funding sources.
Finance Minister Ken Ofori-Atta disclosed this when he presented the 2019 budget statement on Thursday November 15, 2018.
“Mr. Speaker, infrastructure, both hard and soft, is the backbone of economic development and growth, as well as a source of jobs and wealth for a majority of people. In a rapidly changing global marketplace, traditional infrastructure like electricity and power, transport and logistics, water and sanitation, roads, highways, and railways have combined with new, mostly soft infrastructure like digitization of government services to enable emerging economies like ours leapfrog the development path to prosperity. Mr. Speaker, this Government, is committed to embarking on an integrated infrastructural development programme across the country that will move goods, food items and people from one location to another that will create jobs and prosperity and ensure value for money for Ghana as well as position Ghana as the transportation, energy and logistics hub in the region.”
“Mr. Speaker, to ensure efficient management of infrastructure, we will soon submit a bill to set up the Ghana Asset Management Corporation. Mr. Speaker, with your permission I will like to inform Ghanaians on what we have done so far on infrastructure and the massive investments commencing in 2019. Mr. Speaker, in 2019, we will invest massively in the development of road and infrastructure, from a variety funding sources and the following projects have been identified to commence in 2019. Mr. Speaker, in addition to the above, in 2019 Government in partnership with the private sector through PPP arrangements will undertake various projects including Accra–Takoradi Highway Dualisation, Accra – Tema Motorway and Accra – Kumasi Highway Dualisation.”
On Railways he said the development of Railway infrastructure, government, in 2018, commenced the rehabilitation of the existing 56 km narrow gauge line from Kojokrom to Tarkwa through Nsuta corridor to restore passenger rail and freight services for the first time since 2007. This will be completed in 2019.
Work also commenced on rehabilitation works on the 70.8km narrow gauge sections of the Eastern Railway Line from Accra to Nsawam and Accra to Tema. He noted that the Achimota to Tema section is 90 percent complete, and Achimota to Accra Central and Achimota to Nsawam will be completed by end of 2018. Rehabilitation will continue to Koforidua in 2019, he added.
“Mr. Speaker, the following feasibility studies commenced and will be pursued in 2019: a. rail link on BOT basis between the Tema Port and Ouagadougou, Burkina Faso; b. Development of Metro / Light Rail Transit Systems in Accra and Kumasi such as the recently signed Accra Sky Train project; c. Trans-ECOWAS line from Aflao through Cape Coast to Elubo; and d. Re-development of the Central Line from Kotoku in the Greater Accra Region to Huni Valley in the Western Region. Mr. Speaker, the Railway Location Workshop, also at Essikado, is being modernized and equipped, and will be completed in 2019 to become a one-stop workshop to serve the railway, mining, petroleum and agricultural industries. We are confident, 2019 will witness the relaunch of the railway system in Ghana.”
On air transport he said “Mr. Speaker, work on Tamale Airport Phase II received regulatory approvals for the construction of a new Terminal building and will serve the Sahelian region. In 2019, the contract agreement will be finalized, and construction works.commenced. The project is expected to be 65 percent complete by the end of 2019. 130. Finally, Mr. Speaker, Cabinet has given approval for the establishment of a Home-Based Airline with private sector participation to provide regional and inter-continental services for efficient movement of people, goods and services as well as promote tourism. Strategic investors will be engaged, and the airline is expected to commence operations in 2019.”
“To complement the multi-modal transport system and support the movement of people and goods within the sub-region, the Ministry commenced work on the Kumasi Airport Phase II Project to upgrade it to a real international airport. The works include extension of the runway from the current 1,981 metres to 2,300 metres, construction of new terminal building to handle 1 million passengers per year and other ancillary works. The project is expected to be 30 percent complete by the end of 2018. Implementation will continue in 2019.”
‘’Government also facilitated the construction of the Anloga fish landing site to enhance the productivity of fishers. In addition, detailed construction designs and Environmental Impact Assessment studies were completed for landing sites at Teshie, Axim, Winneba, Mumford and a fishing harbour complex at James Town. Actual construction on these landing sites as well as the Phase II of the Anomabo Fisheries College will commence in 2019. Government has completed the first phase of the Elmina Fishing Port Rehabilitation and Expansion project which includes upgrading the existing fishing port as well as the construction of a new port with a basin area and a quay wall for vessels to moor and offload. The second phase of the project which will commence in 2019 will entail the construction new facilities such as shed for the fish market, fishing net mending and the construction of a new slipway for bigger vessels with a boat refurbishment area.”
Government’s expenditure on Wages and Salaries for 2019 is forecasted at GH¢19.4 billion representing about 26.5 percent of Total Expenditure, the Finance Minister has announced
The Minister who presented the budget statement for 2019 on Thursday November 15, 2018 said ‘’the wage bill is anticipated to reduce to 5.6 percent of GDP from the 5.9 percent projected outturn for 2018.
‘’Expenditure on Goods and Services is projected at GH¢6.3 billion, representing 1.8 percent of GDP. The annual growth of 38.8 percent reflects a full provision made to cater for the Government’s priority programmes, including the flagship Free SHS policy.
A total amount of GH¢18.6 billion has been estimated for Interest Payments of public debt. Of this amount, domestic interest payments will constitute about 77.8 percent and amount to GH¢14.5 billion.
He went on state that ‘’government in 2019 will continue to implement the Earmarked Funds Capping and Realignment Act, 2017 (Act 947) to reduce budget rigidities and create fiscal space to fund growth enhancing expenditures.
‘’In this regard, transfers to Statutory Funds as well as all other earmarked funds, are estimated at GH¢13.8 billion, equivalent to 4.0 percent of GDP, compared to 3.5 percent in 2018. 102. Capital Expenditure is projected at GH¢8.5 billion, equivalent to 2.5 percent of GDP and a growth of 55.7 percent over the 2018 projected outturn. Of this amount, domestically financed Capital Expenditure is estimated at GH¢3.2 billion or 0.9 percent of GDP. An amount of GH¢5.3 billion has been budgeted for Foreign Financed Capital Expenditure and this will be funded by a combination of Project Grants and Loans.’’
‘’Total Expenditure (including clearance of Arrears) is estimated at GH¢73.4 billion, equivalent to 21.3 percent of GDP, representing a growth of 27.0 percent above the projected outturn for 2018.
The total revenue and grants for 2019 he said is estimated at GH¢58.9 billion, 17.1 percent of the rebased GDP, up from a projected outturn of GH¢46.8 billion, 15.7 percent of rebased GDP in 2018. 93.
‘’Domestic revenue is estimated at GH¢57.8 billion, representing an annual growth of 25.5 percent over the projected outturn for 2018. Of this amount, non-oil Tax Revenue will constitute about 74.2 percent of domestic revenue and amount to GH¢42.9 billion. This estimate reflects the impact of expected improvements in tax compliance and reforms in revenue administration.
‘’Non-Tax Revenue, excluding oil, will amount to GH¢6.5 billion (1.9 percent of GDP) in 2019, equivalent to 11.3 percent of Total Domestic Revenue. Of this amount, GH¢4.4 billion is expected to be retained by institutions as internally generated funds (IGF).
‘’In addition, as a result of the IGF capping, an amount of GH¢282.2 million is expected to be paid into the Consolidated Fund. 95. Receipts from upstream petroleum activities are projected at GH¢5.4 billion in 2019, equivalent to 1.6 percent of GDP, and representing 30.3 percent growth over the projected outturn for 2018. 96. Grants disbursements from Development Partners are estimated at GH¢1.1 billion, up from the projected outturn of GH¢773.2 million in 2018.’’
On Budget Balances and Financing Operations for 2019 he said: ''Mr. Speaker, based on the estimates for Total Revenue & Grants and Total Expenditure, the 2019 fiscal operations will result in an overall budget deficit of GH¢14.5 billion, equivalent to 4.2 percent of GDP. Financing of the fiscal deficit will be from both domestic and foreign sources. Net Foreign Financing will amount to GH¢9.7 billion, including a planned sovereign bond issuance of GH¢9.6 billion. Total Domestic Financing is estimated at GH¢4.8 billion.
This will result in a Primary Surplus of 1.2 percent of GDP.
''Mr. Speaker, the Benchmark crude oil price for 2019 has been projected at US$66.76 per barrel in line with the Petroleum Revenue Management Act (Amendment), 2015 (PRMA, Act 893). The gas price for 2019 is also projected at US$3.99 per MMBtu. The 2019 Benchmark Revenue crude oil output is 63.4 million barrels (173,764 barrels of oil per day).''
Government has settled GHc 5 billion as part measures employed to clean-up a heavily indebted energy sector.
In presenting the 2019 Budget Statement today [Thursday] November 15, 2019, the Minister said: ‘’Following the establishment of the ESLA bond programme in 2017, Government has steadily settled over GH¢5 billion in legacy debts and aged payables towards the goal of a financially viable and competitive power sector. An audit exercise is currently underway to validate the aged payables that were not considered under the ESLA bond. Once confirmed, government will intervene with a combination of cash and bonds to pay off the valid debts. This measure will improve the liquidity position of the energy sector SOEs and ensure long-term financial viability.’’
According to him, a total amount of GH¢3.5 billion was programmed to be collected in energy sector levies in 2018. At the end of September 2018, an amount of GH¢2.3 billion was collected and lodged into the established, and other, ESLA accounts.
The Minister said from January to August 2018, a re-tap on the 10- year ESLA bonds was effected with GH¢615.0 million and GH¢264.0 million respectively, bringing the total value of ESLA bonds issued to GHC5.8 billion. Energy-sector SOE debts, amounting to approximately GH¢5.6 billion have been settled to date from the proceeds.
On Petroleum the Minister said ‘’…the 2018 Budget announced the development of a petroleum risk management programme to mitigate the economic impacts of global crude price volatility. In the last year, a strong recovery in global crude prices has brought to bear the full brunt of Government’s 2015 price deregulation policy.
‘’The Ministry of Finance, Ministry of Energy, and the NPA have worked closely over the past months to develop a strategy to reduce volatility in pump prices by limiting consumers’ expenditure against upward price movements.
On Mineral Royalties he said the 2018 Budget announced Government policy of securitising future mineral royalties to support current developmental needs. In September, Parliament passed the Minerals Income Investment Fund Bill into law. The objective is to hold and manage the equity interests of Government in mining companies and receive mineral royalties and rents due Government. Accordingly, the Fund will set up a SPV to raise funds by way of an Initial Public Offering (“IPO”) through a dual listing on the Ghana and London Stock Exchanges. Government expects to raise up to US$750.0 million from the IPO. The transaction advisors for the IPO have begun work in earnest.’’
The nominal public debt stock as at end September 2018 was GH¢170.8 billion, comprising external and domestic debt of GH¢86.6 billion and GH¢84.1 billion, respectively, the Finance Minister Ken Ofori-Atta has said.
Presenting the 2019 Budget Statement before Parliament today [Thursday] November 15, 2018, the Minister said the overall rate of debt accumulation in 2018 is 19.8 percent, driven primarily by the cost of the clean-up of the financial sector, involving resolution of the seven (7) defunct banks.’
‘’The rate of debt accumulation would have been 11.5 percent without the clean-up exercise. 78. Mr. Speaker, public debt (including financial sector bailout) as a percentage of GDP stood at 70.7 percent at the end of September 2018 compared with 69.2 percent during the same period in 2017.
He added: ‘’The public debt stock (excluding the financial sector clean-up cost) as a ratio of GDP is 66.5 percent. In terms of the rebased GDP, the public debt to GDP ratio is 57.2 percent (including financial sector clean-up cost) and 53.9 percent (excluding clean-up cost).’’
Finance Minister Ken Ofori-Atta has described the performance of the ruling New Patriotic Party (NPP) as monumental.
The Minister told Parliamentarians on Thursday November 15, 2018 that the performance of government has helped the private sector to create more jobs.
‘’…Our policies have improved the business environment and the private sector has responded by increasing jobs.’’
The Minister told the House that ‘’…based on SSNIT data, the private sector added 208,620 formal jobs in the first 10 months of 2018, an increase on the 197,000 formal jobs registered in 2017. we have resourced the Ghana statistical service and the ministry of employment and labour relations to develop a more robust system to track employment on a quarterly basis.’’
Government is also doing its part on job creation. over the period 2017 and 2018, the ministry of finance granted financial clearance to various agencies to recruit 88,719 Ghanaians into critical sectors of agriculture, health, and education to enable us to improve service delivery. in addition, the Nation builders corps (NABcO), a three - year transitional job opportunity for young graduates has enrolled 100,000 young graduates to support the delivery of critical public services.’’
He added: ‘’…this is a monumental achievement as it is the largest single jobs and skills development programme in the last 50 years.
‘’The testimonies from the beneficiaries and their families have reaffirmed government’s commitment to transform our society.
Government is looking forward to institute measures to ensure irreversibility of the macroeconomic gains we have made, as it plans to exist the International Monetary Fund (IMF) programme.
According to the Minister of Finance, Ken Ofori-Atta, notwithstanding exiting this current programme after successful completion, we will
continue with our prudent management of the economy and buttress that with legal and institutional measures to ensure irreversibility of the gains made so far.
‘’However, as a member in good standing, we will continue our productive policy and technical collaborations with the IMF,’’ he added.
‘’Ghana can look forward with renewed confidence. This seminal 2019 budget, which comes at the mid-term of our administration aims to consolidate the gains from tough reform measures taken so far and surge boldly forward in growing our economy especially as we successfully exit the ECF programme with the IMF, our trusted advisors in the past three years. Under the ECF programme, we jointly made some difficult decisions, which have enabled us to improve our macroeconomic situation.
‘’…we would like to acknowledge the role and contributions of the IMF in our achievements in macroeconomic stabilisation and growth. As a member of the IMF, Ghana will continue to engage the IMF through Article IV consultations and 36 36 | The Budget Statement and Economic Policy of the Government of Ghana for the 2019 Financial Year other arrangements even after its exit from the current ECF Programme.
‘’ As we complete and exit the programme in December 2018, we are also instituting measures to ensure irreversibility of the macroeconomic gains we have made. Consequently, we will, among others: ● legislate a fiscal responsibility rule to cap the fiscal deficit to no more than 5% of GDP as part of measures to promote budget credibility and fiscal sustainability; ● strictly enforce the PFM Act to promote efficient and effective public financial management; ● continue with the zero central bank financing arrangement with the BoG to curb fiscal dominance as part of measures to rein in on inflation; 37 37 | The Budget Statement and Economic Policy of the Government of Ghana for the 2019 Financial Year ● maximize domestic resource mobilization and increase Tax Revenue-to-GDP ratio to levels in line with our peer Lower Middle-Income countries; ● implement expenditure efficiency and rationalisation measures to increase efficiency in public spending and free more fiscal space for growth oriented and job-creating programmes; ● enforce the Public Procurement Act and ensure sole sourcing is minimized to promote competition and efficiency in public spending, thereby, promoting value for money; and ● institute risk management framework to mitigate macrofiscal risks. In view of this a Fiscal Risks Unit has been established at the Ministry of Finance.