The government says it will aggressively pursue socio-economic infrastructure development in an effort to replace old and decaying infrastructure and build new ones to enable the economy to live up to its middle-income status.
In support of that, it has announced plans to attract foreign investment, make indigenous private businesses internationally competitive and encourage the youth to venture into entrepreneurship, while providing employment for the growing population.
“Our efforts to attract foreign investment, create international competitiveness for indigenous private businesses, encourage the entrepreneurship of the youth and provide gainful employment for our growing population are contingent upon such expansion and modernisation of our socio-economic infrastructure,” the Minister for Finance and Economic Planning, Mr Seth Terkper, said in Accra Tuesday when he presented the 2013 Budget Statement and Economic Policy of the government to Parliament.
The budget is on the theme; “Sustaining Confidence in the Future of the Ghanaian Economy”, and the minister told Parliament that the government had already achieved significant successes, including macroeconomic stability and growth on the basis of what he termed the “strong, real and external sector performance, low rates of inflation and the build-up of substantial foreign exchange reserves”.
“We have achieved these goals against the backdrop of the global financial crisis; we have also acted decisively to implement policies that address the challenges that occasionally confront our forward march,” he added.
To buttress the achievements, Mr Terkper noted, “In contrast with the gloomy global picture, Ghana recorded relative economic stability and appreciable growth rates.”
“Gross Domestic Product (GDP) which was about GH¢30 billion in 2008 expanded to GH¢71.8 billion at the end of 2012,” he added.
That, he said, testified that output from all sectors of the Ghanaian economy, not just oil and gas, had “grown in leaps and bounds”.
As a result, the government anticipated that the economy would achieve a growth rate of between 8.5 and nine percent at the end of 2012 when the final GDP estimates were updated by end of April 2013.
For the first time in many years, the budget presentation, which lasted about an hour and a half, was without the Minority side raising placards to taunt the budget, in apparent reference to their resolve to boycott certain parliamentary businesses, particularly those involving the President.
Outlining further details of the achievements, Mr Terkper said Ghana’s 2012 provisional growth rate of 7.1 per cent was still high, given that it was on top of the growth rate of 14.4 per cent recorded in 2011 when the GDP first reflected the impact of crude oil production in commercial quantities.
“Moreover, the 2012 provisional growth rate compares favourably with the global growth of 3.2 per cent and sub-Saharan Africa growth of 4.8 per cent. As we are all aware, the global economy remained fragile in 2012 following four years of weak and uneven recovery, notably the persistent Euro-zone debt crises and the uncertainty surrounding fiscal issues in the United States.”
Mr Terkper admitted that the journey to attain macroeconomic stability over the past four years had not always been smooth because the country was still vulnerable to several external and domestic shocks, adding, “These require decisive and immediate correction at all times.”
On the strength of the cedi, the Finance Minister noted, “During the first half of 2012, the cedi came under speculative attack and despite an election year, the Bank of Ghana and the MOF implemented measures to stabilise the foreign exchange and reserve situations.”
Meanwhile, he said, the Bank of Ghana and the Ministry of Finance would continue to install early warning mechanisms and programmes to carefully identify and manage all sources of fiscal and monetary risks to the budget and financial framework.
Infrastructure projects
On other infrastructure projects, the Finance Minister said the government was on course with the implementation of key infrastructure projects under various loan financing arrangements committed in 2011 and 2012.
“Works are far advanced on the Western Corridor Gas Infrastructure Project under CDB of China; the Bui Hydro Dam Project by EXIM China is expected to be completed this year; the water projects by EXIM Turkey and Korea are to commence this year, as well as the Tamale Project, the Flyover Project and some portion of the Eastern Corridor Road Project supported by the Brazilian PROEX facility,” he said.
He said the ministry was also working diligently with the beneficiary MDAs to finalise the relevant project preparation document to ensure the timely preparation of those and other projects in the pipeline.
According to him, the completion of those projects would significantly reduce the infrastructure deficit in critical areas of the economy.
Water for Schools
He said as part of efforts to address the deficit in water provision in schools, the government had decided, as a priority over the medium term, to ensure that all primary, junior and senior high schools in the country had access to clean and potable water.
The Finance Minister said the Ministry of Works and Housing would collaborate with the Ministry of Education to undertake a needs assessment of water and sanitation facilities in all existing schools and draw up a programme to meet those needs.
Infrastructure Development through PPP
Mr Terkper revealed that the country faced an infrastructure funding gap of US$1.5 billion a year.
As a result, the government would increase its efforts at involving the private sector in public infrastructure development.
In connection with that, he said, a PPP Law was being developed to provide the framework for the increased involvement of the private sector to meet the current infrastructure deficit.
Water Resources, Works and Housing
Under phase II of the Atorkor-Dzita-Anyanui Emergency Sea Defence Works, Mr Terkper said, the Groyne System being constructed to protect the 1.5km stretch of the coast was about 95 per cent complete.
“Similar works were done on the 1.5km stretch of revetment to protect the Accra-Tema rail line from the effects of sea erosion under the Sakumono Sea Defence works,” he added.
He said on the Kpong Water Supply Expansion project, substantial work had been completed on the booster station and reservoir at Dodowa.
“Thirty-seven kilometres out of 73km transmission pipelines were laid, while work on the Water Treatment Plant is 45 per cent complete. Overall progress of the project is 37 per cent complete,” he said.
He said construction works to expand the Kumasi water supply system from the current production capacity of 24mgd to 30mgd was 90 per cent complete, while the Mampong water supply project to add 1.76 million gallons a day of water to the supply was ongoing.
Roads and Highways
He said under the Trunk Road Development Project, the following major roads were completed during the period: Achimota-Ofankor, Nsawam Bypass, Nkawkaw Bypass 1, Akatsi-Akanu, Akatsi-Agbozume and Techiman–Apaaso.
In addition, contracts were also awarded for the following major trunk road projects and works were in progress: Asikuma Junction–Hohoe, Dodo-Pepesu Nkwanta, Nkwanta–Oti Damanko, Fufulso-Sawla, Ayamfuri-Asawinso and Agona Junction to Elubo.
Under the Feeder Road Development Project, he said 104 bridges were launched. Out of these, 82 had been completed and opened to traffic, while the rest were at various stages of completion.
Some of the completed bridges are on the following roads; Tetegu Junction–Tetegu, Dodo Amafrom–Dodofe, Osuboi–Ponponse, Nsutapong–Chakachakam, Eshiro Junction–Eshiro–Kwesigyan, Potsin Junction–Awobrem, Abochie–Nyankaman, Torya Junction–Torya, Drabonso– Dawia, Ahenkro–Boaman–Amoako, Wenchiki–Bumbrugu, Zabzugu–Kuntumbiyilli, Bolgatanga–Naga, Bui–Zanlerigu, Karni–Kulkarni, Kundugu–Bawasabele.
Story by Charles Benoni Okine & Samuel Doe Ablordeppey
