Finance Minister Ken Ofori-Atta
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Read full NPP's first budget statement in Rich TEXT Document, exactly as finance Minister, Ken Ofori-Atta presented at Ghana parliament house March 3, 2017.

Table of Contents - 2017 NPP Budget by Ken Ofori-Atta

















1. Rt. Hon.  Speaker,  Honourable  Members of Parliament,  on the  authority  of President Nana  Addo Dankwa  Akufo-Addo, I beg to move that  this Honourable House approves the Financial  Policy of the  Government of Ghana  for the  year  ending  31st December

2. On the  authority of the  President,  and  in accordance with Article 179 of the 1992  Constitution, permit  me to present to this august House, the maiden Budget  of the President of the Republic of Ghana.

3. This presentation is an abridged version of the 2017 Budget  Statement and I would like to request the Hansard Department to capture the entire Budget Statement and Economic policy.

4. I  also submit before  this august House the following reports: The  2016 Annual Report on the Petroleum Funds, in accordance with Section 48 of the Petroleum Revenue Management  Act, 2011 (Act 815), as amended; The 2016  Annual  Debt  Report,  in accordance with Section
72  of  the  Public  Financial  Management  Act,  2016  (Act 921); and The 2016  Energy Sector Levies Report, in accordance with  Section 6 of the Energy Sector Levies Act, 2015 (Act 899).

5. Mr.  Speaker,  let  me   first  thank   you  and   the   house  for approving my nomination as Finance Minister. My profound gratitude  to  both  sides  of  the  isle.  Thanks for  the  dry run  of  3 hours 45 minutes; I pray that  I will be let off sooner this time.  Mr Speaker,  I  also  stand here  humbled  by the  President’s  courage and  confidence to elevate me to this very weighty  and  high office of  Finance  Minister  of  the  Republic  of  Ghana,  a  nation   with  a manifest  destiny  for  greatness,  a  nation   with  very  high expectations  for  President  Akufo-Addo’s  government,  a  nation that  is 60 years old, remains a diamond in the rough and therefore needs more  than a shine.

6. Mr. Speaker, it is at this providential point in our history that I have been given this grave but exciting   responsibility   to participate  in sending  Ghana  beyond  aid and  to realise  our  birth right as the  Black Star of Africa. I, Mr. Speaker,  accept this  role with all the solemnity and reverence that it deserves.

7. Mr. Speaker, I would like to assure this house as I also did with the  Finance  Committee  that  I will work  with members with utmost candour and respect. You are first and foremost the legislative, the representatives of our people and I have been privileged  to witness the  sacrifices you have  gone  through to be here.  Ayekoo. Secondly, Mr. Speaker, I am  standing in the  rather large  size  shoes of a legacy  of family members such as Dr. JB Danquah, Mr. William Ofori-Atta, Honourable Amoako-Atta, Dr. Jones Ofori-Atta (my father), President Nana  Addo Dankwa Akufo
-Addo  and  Honourable  Atta  Akyea.  

I  have,  Mr. Speaker,  been brought up to respect this house and  I will also like to honour  my forbears. Finally Mr. Speaker, let me  freely admit, that  this battle ahead is  indeed  the  Lord’s  and  I  humbly  confess  before this august house and  the  nation,  of my inability to  accomplish  this enormous task without  the  help  and  the  leading  of the  Almighty; through Jesus Christ we can resolve these challenges and establish a righteous and just Society for all.

8. Mr. Speaker, nine (9) days ago, the President presented the State of the Nation  Address to this august House. His address, in addition to presenting the state of the economy, also broadly outlined   the  vision  and   policy  direction  of  his  Government.  A vision  of  hope,  of  jobs  and   wealth   creation,  and   of  a  robust economy that supports a thriving private sector. With this Budget, I  present  to you  the   policies,  strategies and actions  we  will undertake to deliver the President’s vision.

9. Mr. Speaker,  let us acknowledge  that  we  have  inherited  a challenged economy in which we are all stakeholders  in: considerable  debt  overhang and  rising  interest  payments caused by excessive borrowing; expenditure  overruns and  accumulated  arrears caused  by excessive sole sourcing, lax fiscal policies and weak commitment controls, revenue underperformance caused by leakages, loopholes and tax exemptions; slowdown in economic growth caused by energy challenges and a lack of an enabling environment for the private sector; limited  capital  investment, among others, due to rigidities from earmarking of  revenues  that severely limit the fiscal space and undermines the prioritisation of government policies; and urgent  need  to collaborate with our work force  and  build a shared partnership to enhance training and improve productivity.

10. The  country’s  debt  stock has reached a level of about 73 percent of GDP at end-December 2016, which is in excess of the debt  sustainability  threshold  of 70  percent. This  has resulted  in high  debt  service  costs with  interest  payments  alone  taking  up nearly  42  percent  of  tax  revenue.  This,  together  with Compensation  of  Employees  and  Statutory Payments,  is  more than  total  domestic  revenue,  leaving  no  fiscal  space for growth enhancing policies/programmes/expenditures.

11.Total  expenditures  at  end-December  2016  stood at  30.3 percent of GDP against a target of 26.4  percent of GDP, with an outstanding stock of arrears of nearly GH¢7 billion. This is at variance  with the  Performance Criteria  on  the  non-accumulation of  arrears  for  the   2016   fiscal  year   under   the   IMF-supported Extended Credit Facility (ECF) Programme.

12. Mr. Speaker,  the  large  fiscal  slippages  resulted  in a fiscal deficit  of 8.7 percent of GDP on cash basis and  10.3  percent on commitment   basis.   This   is   a   sharp  deviation   from   the   IMF program fiscal target of 5.3 percent of GDP. We intend  to reverse this trend and restore fiscal discipline.

13. Mr. Speaker, the rate  of economic growth  has slowed down in recent times,  with 2016  growth  estimated  at  3.6  percent,  the lowest  in over  two  decades. Of particular  concern is  the  erratic performance of the  Agriculture  Sector and  the  continuing energy challenges  which  have  negatively  affected the  industrial  sector. The effect of this is a struggling private  sector and  rising unemployment.

14. Mr. Speaker, while inflation  and interest rates have  recently been  on  the  decline, we  still have  to  fix the  underlying macroeconomic fundamentals to ensure that  this trend  is sustainable.

15. Mr.  Speaker,  the   economic  challenges  we  face   require deliberate but urgent, well thought out strategic steps and the backing and  total  support of the Ghanaian people. I am confident that  we have  the human resource, especially in this House and  in our  Diaspora  Community,  the  experience,  and  most importantly the resounding mandate of the people to guide and inspire us.

16. This budget presents a clear roadmap on how we will move this  economy from  its  current state into  a full-fledged  middle income economy – a Ghana beyond  Aid.

17. Mr. Speaker, our goal is to build the most business-friendly and  people-centred  economy in Africa,  which  will translate  into job  creation  and  prosperity  for  all Ghanaians.  We will strike  the right balance between fiscal consolidation and growth, by making credible  policy choices that  will create the  fiscal space to implement growth  enhancing initiatives. Mr. Speaker, we intend  to build a partnership with labour  that  will result in a social contract to  mark  an  era  of peace in which  we  will mutually  enhance the productivity  of our labour force.

18. This commitment however, is hampered by five constraints which we need  to overcome:
· low revenue collection;
·expenditure overruns and corruption;
·high wage  bill;
·rigidity of  fiscal  structure caused by heavy  earmarking  of tax revenue; and
·high debt  service payments

19.This  budget presents a  proposal  to  address these issues permanently  and  I hope  I can  secure the  support of this  august House in that regard.

20. Revenue   administration   remains   a  challenge.   To  boost revenue streams,  we  will strengthen tax  administration,  reduce tax exemptions, plug revenue loopholes and leakages and combat tax evasion especially at our ports. We will broaden the  tax base whilst   reducing   and   abolishing   some  taxes  and   levies.   The National  Identification Scheme, a priority project  of this administration, which we intend  to re-launch this year, will support our efforts to rope  in the  economically active  but  undocumented citizens and  the  informal  sector of  the  economy thereby broadening the tax base and accelerating financial  inclusion.

21.Mr. Speaker, we will adhere to and maintain good  economic governance principles of fiscal discipline, accountability and transparency. To reiterate what  the President said, we will protect
the public purse by guaranteeing value for money  in all public transactions, and  exercising prudence and  discipline in our fiscal management to deliver on the aspirations of the Ghanaian people. Inefficiencies and  waste in government spending will not  be tolerated and  there  will be strict enforcement of all relevant laws and  regulations, especially the new Public Financial  Management Act, 2016 (Act 921).

22. Government  will  pursue  an   effective  debt   management strategy  to  ensure debt  sustainability.  We will also  adopt global standards  of  risk  and   treasury  management  to  ensure accountability  in the  use of state resources. In  addition,  we  will work to reduce the amount of government borrowing and the resulting  crowding  out  of the  private  sector. Mr. Speaker,  as an example,  In  the  2016  budget statement,  the  entire  allocation  for the  Ministries of Roads and  Highways, Trade  and  Industry, Food and  Agriculture, Water Resources, Works and  Housing, Youth and Sports and  Ministry of Transport amounted to a total  of GHC2.2 billion.  Interest  payments  in  2016   (GHC10.8  billion)  would  be nearly   5  times  what   was  allocated  to  the   six  key  ministries combined. This is how pernicious our debt  stranglehold is.

23. Mr. Speaker,  the  Budget  will set the  pace for job creation and  accelerated growth  by empowering the  private  sector. To accomplish this, we will shift  the focus of  economic
management from  taxation to production. This will reduce the cost of doing business and create a conducive climate for investment and  job creation.   In this regard, a number of taxes that    impede   growth will be  reviewed, and  if  necessary, abolished. Government will reverse the recent low growth  trend by boosting agriculture and industrial productivity.

24. Mr. Speaker, the 2017 Budget will set  in  motion   the following key policy priorities and flagship projects: establishment of the  Infrastructure for Poverty  Eradication

Project (IPEP). Under this project, every constituency will be allocated the cedi equivalent of US$1 million to combat poverty and  improve   the  lives  of  rural  dwellers  and  deprived communities;
implementation of the “One District One Factory”

programme; establishment of the  Zongo  Development Fund  to support the provision of critical infrastructure and services; roll-out  of  the  National  Identification  Scheme to  facilitate the  efficient  delivery of public and  private  services and help formalise the economy;

roll-out  free  SHS to  ensure equal  opportunities  for all and enhancement of human capital for the country; roll-out  of a national  digital  addressing  system  to  provide unique addresses for all properties in Ghana; and restoration of teachers and nurses training allowances.

25. Mr. Speaker, despite significantly missing the  2016  the  set targets,  I  want   to  assure my  fellow  Ghanaians,  investors  and external stakeholders that  we are committed to continue with the Extended Credit  Facility (ECF) Programme with the  IMF. We will, however, review some of the targets and  structural reform benchmarks to  accommodate  our  priorities  of  tax  reliefs  and other  positive measures to boost the private sector.

26. Mr. Speaker, Government will implement measures that  will unleash  the creative abilities   of   Ghanaians, and facilitate increased economic activity which will lead to the improvement in people’s lives.

27. Mr. Speaker,  there  are  exciting  times  ahead and  there  is every  good  reason to  be  optimistic  that  our  country  is  ready  to work again.  Our government looks forward  to a partnership of progress with our honourable colleagues across the aisle.

28.   Mr. Speaker we must as a nation  come together to confront our  reality.  The  President  did  mention  nine  days  ago  that  he was in a hurry… Mr. Speaker, we must all be in a hurry, we must trigger  a national sense of urgency  to deal  with our deficit.  It’s
continual presence curtails our capacity to leverage our many opportunities and  resources that  we have  as a nation.  Let me stress, Mr. Speaker, we cannot borrow our way out of these challenges. This will be tantamount to creating and  sharing poverty, which only leads to a loss of our fiscal sovereignty; so like the  President,  we  must all be  in a hurry to  grow  our  way into Prosperity. This budget, Mr. Speaker, seeks to do this.

29.  Mr. Speaker, my presentation today will follow this outline:

· I  will present a  short brief  on  how  the  Global  economy performed in 2016, the medium-term outlook and the

expected impact on the Ghanaian economy;

· This will be followed  by the Macroeconomic  Performance for 2016 against the target sets;
· I will then  present the  President’s Macroeconomic Targets for 2017 and the Medium-Term Targets;
· In addition, I will briefly talk about some key sector deliverables for 2017;
· And then provide you with the key policy initiatives for 2017; and

· I will finally conclude with highlights of the key messages in the Budget.


Global Output
30. Mr. Speaker,  the  global  economy is  expected to  witness some improvement  in growth  in 2017  and  the  medium  term after a  lackluster  performance in  2016. The  January  2017 Update of the IMF’s World Economic Outlook (WEO) projects a global  growth   of  3.1  percent  in 2016. This  is  expected  to improve  marginally  to 3.4 percent in 2017  and  further  to 3.6 in 2018.

31. For emerging  markets and  developing  economies  growth is expected to remain  unchanged at 4.1 percent in 2016, and is projected to recover to 4.5  percent in 2017  and  further  to 4.8 percent according to the WEO.

32. The downside risks to the global outlook, according to WEO, include,  increased  restrictions  on  global  trade   and  migration and   its   negative   impact   on   productivity.   In   addition,   high corporate debt, declining  profitability, weak  bank  balances, and thin policy buffers in emerging market economies may lead  to capital flow reversals and depreciation of the local currency.

Commodity Prices

33. Mr.  Speaker,  oil  prices  have  picked   up  in  recent weeks resulting mainly from an agreement among major producing countries  to  reduce supply.  Crude  oil prices  are  expected to
average $55 per barrel  in 2017, about 28 percent increase over the 2016 levels.

34.    Gold prices are expected to decline  from an average of US$1,249  per  fine  ounce in  2016   to  US$1,219  in  2017   due largely   to   an   expected   strengthening   of   the    US   dollar. According   to  the  Commodity  Markets Outlook  by  the  World Bank, Cocoa  price  is projected to average about US$2,940 per tonne in 2017 up from US$2,850 in 2016

Implementation of ECOWAS Common External Tariff (CET)

35.Mr.  Speaker,  Ghana   joined  nine  other   member state  to implement  the  ECOWAS Common External  Tariff  (CET) effective 1st February, 2016.  The ECOWAS CET is considered a major  platform  for  the  establishment  of  Customs Union that will facilitate free  trade  and  advance greater economic integration  within  the  region.   The  tariff  is  expected to  help address  problems   such  as   cross-border   smuggling   and dumping in the sub-region. Government is currently  monitoring and evaluating the impact of the new regime  on various sectors of the economy.

Implications of Global Developments for Ghana’s Economy

36. Mr. Speaker, we address the risk  of  commodity price volatility, Government will work towards diversifying the economy. We  will add   significant  value  to  our  exports and support local  manufacturing of imported goods, which  can  be produced locally in partnership with the private sector.



37. Mr. Speaker, growth  has remained subdued over the period. The  2016  GDP,  based on  the  provisional  outturn for  the  first three  quarters of the year, is estimated at 3.6 percent, with the non-oil  real  GDP estimated  at  4.6  percent,  same as target. At the  sectoral level,  the  Industry Sector,  specifically,  mining  and quarrying  underperformed due to a contraction in upstream petroleum output, which constitutes the bulk of the Mining and Quarrying   Subsector.  All the   subsectors  in  the Agriculture Sector,  however,  recorded positive  growth  rates. The Services Sector continues to dominate the  sectors with a share of 54.3 percent in 2016.

38. Mr. Speaker, inflation, which remained  elevated  for  most part of 2016, began to slow-down towards the end  of the year. Inflation began the year at 19.0 percent, peaked at 19.2 percent in March and ended the year at 15.4 percent.

Monetary and Credit Developments

39. Mr. Speaker, the key monetary aggregates and credit to the private  sector recorded slower growth  in 2016, in line with the tight  monetary policy stance. The broad  money  supply (M2+), at  the  end  of  December  2016,  recorded an  annual  growth  of

22.0 percent compared with 26.1 percent in the same period  of 2015. This was mainly  driven  by a  moderate growth  of  19.5 percent  in  Net  Domestic  Assets  (NDA) and a  Net  Foreign Assets (NFA) growth  of 29.8 percent in December 2016.

40. Growth in total  outstanding credit  to the public and  private institutions  moderated further  in December  2016,  a reflection of a higher incidence of non-performing loans and the tight monetary  policy  stance.  The  annual  growth   in  total   credit slowed to 17.6 percent at the end of December 2016  from 24.9 percent recorded in 2015.

Stock Market Developments

41. Mr. Speaker, annual changes in the Ghana  Stock  Exchange
Composite  Index  (GSE-CI) remained  negative,  generally reflecting investor preference for higher  yielding money  market instruments. The  GSE  Composite Index (GSE-CI)  lost 15.3 percent  (305.82  points)  year-on-year  in  December 2016 to close  at  1,689.09  points  from  1,994.91  points in December 2015. Total market capitalization stood at GH¢52,690.99 million at the end of December 2016, showing a year-on-year decline  of 7.8percent. Interest Rate

42. Mr. Speaker, interest rates in 2016  exhibited mixed performance. The  Bank  of Ghana  Policy  Rate  was kept  at  26 percent until  October 2016   as risks  to  inflation  and  growth were  assessed as balanced. The policy rate, however, was reduced to 25.5 percent, as inflation  pressures eased while domestic growth  conditions continued to deteriorate. Yields on short-term Government securities decreased, while those of medium to long-term GOG bonds increased in line with Government’s   policy   to   properly   align   the   yield  curve   and extend the maturity  profile.

Exchange Rate

43.   Mr.  Speaker,  the   Ghana   cedi   remained  relatively   stable against   the   major   currencies   in  the   currency  market,   on account of tighter  monetary policy and  improved foreign exchange inflows. However, this trend  was reversed in the run- up to the  December elections, as demand pressures mounted. The  Ghana   cedi   recorded  a  cumulative  depreciation  of  9.6 percent and  5.3 percent against the US dollar and  the euro, respectively, but appreciated by 10.0 percent against the pound sterling in the interbank market in 2016.
External Sector

44.   Mr. Speaker, the balance of payments (BOP) turned  surplus for the  first time  since 2011  due  to improved current account balance.  Accordingly,  there   was a  build-up  in  gross foreign assets,  which  supported the  relative  stability  in the  exchange rate.   The  BOP  surplus  was US$247  million,  compared  to  a deficit  of US$129  million in 2015.  The trade  balance improved from  a deficit  of US$3.1bn  in 2015  to a deficit  of US$1.7bn  in
2016  due  to  increased  exports receipts  by 7.2  percent and  a decline  in imports by 5.3 percent.

45.   The  gross foreign   assets at  the  end  of  December  was estimated at US$6,161.80 million, from  US$5,884.70 million at the  end  of  December 2015, representing a  build-up of US$277.07 million. This was sufficient to provide  cover  for 3.5 months  of   imports   of   goods  and   services,   same  as  in December 2015.

Fiscal Developments

46.   Mr.   Speaker,   the   main   objective   of   fiscal   policy,   as envisioned  in  the   2016   Budget,  was  to  consolidate Government’s finances by reducing the fiscal deficit from 6.3 percent of GDP in 2015 to 5.0 percent of GDP in 2016.

47.  Provisional data for 2016, however, indicates that  the envisioned  fiscal  consolidation  was not  achieved.  As  a result, total  domestic  revenue and  grants was 11.1  percent below target (an  actual of GH¢33.7  billion,  against  a target GH¢37.9 billion),  while  total  Expenditure  (including   outstanding expenditure   claims)   exceeded  the   target  by  16.2   percent. These slippages  resulted  in  a  fiscal  deficit  on  commitment basis of 10.3  percent of GDP. On cash basis, the  fiscal deficit was 8.7 percent of GDP against a target of 5.0 percent of GDP. The  primary  balance  for  the  period,  recorded a  deficit  of  1.4 percent of  GDP,  against  a  targeted surplus  of  1.2  percent of GDP.

48. Mr. Speaker, the  shortfall in total  Revenue  and  Grants was broadly attributed to the impact of energy  challenges on households and  firms, lower than  anticipated receipts from  oil due  to both  lower-than-programmed benchmark crude  oil price and  production, and  non-realisation of proceeds from  both  tax and  non-tax categories. In addition, tax  compliance was relatively weak.

49. Mr. Speaker, total  expenditures (incl. outstanding obligations) amounted  to  GH¢51.1   billion  at  end-December 2016. Outstanding obligations of GH¢5 billion, comprise MDA obligations with MoF, which  had  not  yet been  captured on the GIFMIS as well  as outstanding payments  to  Statutory Funds. The outstanding obligations relate  mostly to Compensation of Employees, Goods and Services, and domestically financed Capital Expenditure.

Petroleum Receipts in 2016

50.   Mr Speaker, in 2016, GNPC lifted six parcels of crude  oil (consisting of the 31st to 35th  Jubilee and  1st TEN liftings) on behalf  of the  State,  and  exported a total  of 21,580  MMscf of gas to Ghana  National  Gas Company (GNGC). Total crude  lifted was 5,856,921  barrels  of  oil (4,860,462  barrels  of  Jubilee  oil and 996,459 barrels of TEN oil). Receipts from crude  oil liftings for 2016  included revenues from  the  sale of 4,824,417 barrels of  oil from  the  30th  (lifted  in December  2015)  and  the  34th Jubilee liftings, which amounted to US$207.79 million (GHȻ811.68  million). The proceeds from  the  35th  Jubilee and
1st TEN liftings  in December  2016  were  received  in the  first quarter of  2017.   Mr.  Speaker,  actual  petroleum  receipts  for
2016  fell short of the 2015  performance by 29.1 percent due to the continuous decline  in crude  oil prices, the decline  in Jubilee production and lower TEN production.

Public Debt Development

51.   Mr. Speaker, total public debt  stock as at end 2016 stood at almost 73 percent of GDP up from 71.63  percent in 2015.  This was due to the larger  than  expected fiscal deficit and financing requirement in 2016.  Domestic and external debt  stood at 31.7 percent  of  GDP  and   40.8   percent,  respectively.  In  nominal terms, the public debt  stock as at end 2016  stood at GH₵122.3 billion (US$29.2 billion), with domestic and external debt  of GH₵53.4 billion (US$12.8  billion) and  GH₵68.9 billion (US$16.5 billion), respectively.

Energy Sector Levies

53.   Mr. Speaker, the  Energy Sector Levies Act, 2015  (Act 899) was enacted to “consolidate existing energy  sector levies to ensure  efficient   utilisation  of  proceeds  generated  from   the levies,   impose   a  price   stabilisation   and   recoveries   levy  to facilitate   sustainable   long   term   investments   in  the   energy sector, and to provide for other  related matters”.

54.   Mr. Speaker,  the  law requires  the  utilisation  of the  energy sector levies mainly for the  clearance of legacy  debts of SOEs operating  in the  energy  sector,  to  support power  generation and  power  sector infrastructure,  subsidy  for  premix  fuel,  and
the stabilisation of petroleum prices.

55.   A total  amount of  GH¢3.2  billion was programmed to  be collected as total  Energy Sector Levies (ESL) for the year 2016. Actual collections at the  end  of the  year was GH¢3.3 billion. A breakdown of  the  utilization  of  the  levies  is  provided  in this Budget  Statement.

56.   Mr. Speaker,  a  few  challenges  have  been  encountered in the utilization  of the proceeds and we will have  to come to this august House for an amendment of the Act.


57. Mr. Speaker, Government’s  policy objectives for the medium term among others will be to: build the most business-friendly and industrialized economy  in  Africa,  capable  of  creating  decent  jobs  and prosperity for all Ghanaians; modernize agriculture, improve production efficiency,
achieve  food  security,  and  profitability  for our  farmers with special emphasis on value-addition;
develop leadership skills, quality education, entrepreneurship, job skills and creative skills; and
ensure a functioning social protection system which addresses the  needs of  the  weak,  marginalized, vulnerable and socially excluded; among others.

58. Mr. Speaker, to achieve our broad macroeconomic objectives, our policy direction will be to:
· restore and sustain macroeconomic stability;
· shift the  focus of economic management from  taxation to production;
· manage the economy competently; and
· make the machinery of  government work to deliver the benefits of progress for all Ghanaians.

59. Mr. Speaker, prudent monetary and  external sector policies will also be pursued by the  Bank of Ghana  to complement the fiscal policy stance to ensure price and exchange rate stability.

60. Mr. Speaker,  we are confident  that  the above highlighted policies which are  discussed in detail  in the  Budget  Statement will contribute to the achievement of  the following macroeconomic targets for 2017:
· overall real GDP growth of 6.3 percent;
· non-oil real GDP growth  of 4.6 percent;
· end-year inflation of 11.2 percent;
· average inflation of 12.4 percent;
· overall fiscal deficit of 6.5 percent of GDP;
· primary surplus of 0.4 percent of GDP; and
· Gross Foreign Assets to cover at least 3 months of imports of goods and services.

61. Mr. Speaker, we believe strongly that our medium-term policies, anchored on fiscal discipline, a broadened tax base, elimination of  wasteful expenditures, prudent debt management strategies, complementary  monetary policy,  and sustainable external balance will ensure even better macroeconomic outcomes in the  medium-term. Consequently, the  macroeconomic targets for the  medium-term (2017-2019) include the following:
·overall real GDP growth  to average 7.4 percent;
·non-oil real GDP growth  to average 5.6 percent;
·inflation  to be within the  target band  of 8±2 percent in the

2018-2019 period;

· overall  fiscal  deficit  to  reduce to  3 percent by the  end  of 2019;

· current account deficit  projected  to decline  to 4.8  percent of GDP in 2018  and  further  to  2.7  percent of GDP in 2019;

· Gross Foreign  Assets to cover  not less than  3.5 months of

import of goods and services in the medium-term.

62.   Mr. Speaker,  consistent  with  Section  16  of  the  PFM  Act,

2016   (Act  921),  we  have   also  set the  following  targets  on primary  and  secondary  fiscal  indicators  to  monitor  the  fiscal health  of the  economy towards the  achievement  of our  fiscal policy objectives in 2017:

· non-oil primary deficit of 0.8 percent of GDP;
· public  debt  stock equivalent to towards trend  70.9  percent of GDP;
· capital spending of 12.6 percent of total expenditures; and
· (domestic) revenue-to-GDP ratio of 21.4 percent

Resource Mobilization  for 2017

63.  Mr.  Speaker,  total   Revenue   and   Grants,  including programmed receipts from  petroleum for the  2017  fiscal year, is   estimated   at   GH¢44.9   billion   (22.1    percent  of   GDP), indicating a 33.5  percent increase over the  provisional outturn in 2016.  Total non-petroleum Revenue  and  Grants is estimated at  GH¢42.6  billion (21.4  percent of non-oil  GDP) representing
29.2 percent increase over the provisional outturn in 2016.
64.   Mr. Speaker, total  receipts from  petroleum is estimated at

1.2 percent of GDP and amounts to GH¢2.4 billion, representing a 231.2  percent increase over the outturn in 2016.

65.   Domestic revenue is estimated at GH¢43.4 billion or 21.4 percent of GDP and  is expected to be 33.5 percent higher  than the provisional outturn in 2016.

66.   Mr.  Speaker,  total   tax  revenue  is  estimated  at  GH¢34.4 billion,  representing  6.9  percent of GDP. Of this  amount,  non- petroleum  tax  revenue is  estimated  to  grow  by 32.4  percent and  this amounts to GH¢33.8 billion equivalent to 16.9 percent of non-oil GDP.

67.   Taxes on Income and  Property is estimated to increase by

47.7 percent to GH¢13.4 billion in 2017, accounting for 39.1 percent of total tax revenue. Of this amount, Royalties from petroleum is estimated at GH¢616.8 million.

68. Taxes on Goods and Services are estimated at GH¢13.9 billion, representing 13.3  percent increase over the  provisional outturn in 2016  and  40.3  percent of  the  estimated  total  tax revenue for 2017.

69. International Trade taxes, are estimated at GH¢7.1 billion, representing 3.5 percent of GDP and 20.6 percent of total  tax revenue. This  estimate  represents a  61.1  percent increase  over the provisional outturn for 2016.

70. Mr. Speaker,  the significant  growth of  this tax  type emanates mainly from  additional GH¢1.0 billion in tax  measures that  will be realised as savings from  the  reduction in the  amount of import exemptions that will be granted in the 2017 fiscal year.

71. Mr.  Speaker, Non-tax revenue, is estimated at GH¢6.7 billion (3.3 percent of  GDP),   representing  15.3  percent of domestic revenue. An amount of GH¢3.4 billion is expected to be retained  by MDAs  for the funding of their  activities  and  the  rest lodged  into the Consolidated Fund. Of the total amount estimated for Non-tax revenue, an amount of GH¢1.7 billion is estimated as non-tax petroleum revenue.

72. Mr. Speaker, grants from Development Partners is estimated at GH¢1.5 billion, equivalent to 0.8 percent of GDP.

Resource Allocation for 2017

73. Mr. Speaker, total expenditure, including  provision made for the clearance of arrears and outstanding commitments in 2017 is estimated at  GH¢58.1  billion, equivalent to 28.6  percent of GDP. The estimated expenditure for the year represents a 13.7 percent increase over the provisional outturn for 2016.  Of this amount, GH¢3.7 billion, equivalent to 1.8 percent of GDP and  6.4 percent of total  expenditure will be used for the  clearance of arrears and outstanding commitments.

74. Mr. Speaker, provision has been  made for the clearance of up to 20 percent of the outstanding  claims  from  previous  years whiles we await  the  outcome of a special forensic audit  of these outstanding claims.

75. Mr. Speaker, Compensation of Employees is estimated at GH¢16.0 billion (7.9 percent of GDP). Of this amount, GH¢14.0 billion, equivalent to 6.9 percent of GDP.

76. Expenditure on Goods and Services is estimated at GH¢3.5 billion, representing 1.7 percent of GDP.

77. Total Interest  Payment  estimated  at  GH¢13.9 billion, represents 23.9 percent of total expenditure and  is equivalent to 6.9 percent of GDP. Of this amount, domestic interest payment constitutes  80.5 percent of  the total Interest  Payment  and amounts to GH¢11.2 billion.

78. Mr. Speaker, the  existing legislation that  have  underpinned the estimation of Grants to other  Government units over the years is being reviewed  to break the cycle of rigidities in the Budget. Consequently, Grants to other  Government units, comprising statutory  payments   into   the   National   Health   Insurance   Fund, Ghana  Education Trust Fund, the District Assemblies Common Fund, Road Fund, Energy Fund, transfer to the Ghana  National Petroleum Company, retention of internally-generated funds by MDAs  and  other   earmarked Funds has  been   constrained  to  a ceiling  of  25  percent of  tax  revenues. The  total  allocation  for grants to Other Government Units is  GH¢9.7 billion.

79.  Mr. Speaker,  in  addition  to  the  significant  tax  incentives granted in this year’s Budget, an amount of GH¢241.2  million has been  budgeted in Social  Benefits  to assist  lifeline consumers of electricity  and transfers for social protection.

80.A total  amount of  GH¢7.1  billion  has been   allocated  for capital expenditure. Of this amount, 38.9  percent will be financed from domestic sources and the remaining from foreign sources.
Overall Budget  Balance and Financing for 2017

81. Mr. Speaker, based on the revenue and expenditure estimates, the  2017 budget will result in an overall budget deficit of GH¢13.2billion, equivalent to 6.5 percent of GDP.

82. Financing  of  the  deficit  will be  from  both  domestic  and foreign  sources. Net Domestic Financing is estimated at GH¢14.6 billion,  equivalent  to  7.1  percent of GDP,  and  includes  financing from divestiture proceeds of GH¢1.8 billion. Net foreign  financing is estimated to constitute a net repayment of GH¢1.3 billion, equivalent to 0.6 percent of GDP. An amount of GH¢300.7  million, equivalent to 0.1 percent of GDP is estimated to be saved in the Ghana  Petroleum and  Contingency Funds while the  Sinking Fund is expected to be drawn-down by GH¢716.1 million.

Projection of 2017 Petroleum Receipts and allocation

83. Mr. Speaker, the  estimated Benchmark Revenue  (BR) price for crude  oil is US$56.142 per  barrel  for 2017  with a benchmark output  of  43,875,920  barrels  (120,208  bopd)   and   32,512,497 MMBtu for oil and gas, respectively

84. The petroleum revenue for 2017  is estimated at US$515.64 million, with BR projected at US$242.08 million.

85. Mr Speaker, the second 3-year  cycle  for the  review  of the petroleum revenue distribution formula, as stipulated in the PRMA, has elapsed.  We  would  like  to  request  this  august  House to maintain the existing distribution formula  as follows:

·30 percent of the net Carried and Participating Interest to GNPC;
·70 percent of net receipts (after  GNPC’s) to the ABFA;
·30 percent of net receipts (after  GNPC’s) to the Ghana

Petroleum Funds;

·30  percent of the amount allocated to the Ghana Petroleum Funds to the Ghana Heritage Fund; and
70  percent of the amount allocated to the Ghana Petroleum Funds to the Ghana Stabilisation Fund.

86. We would also  like  the House to approve the  following priority areas for the spending of the  ABFA for 2017-2019, in line with the PRMA:

Agriculture; Physical Infrastructure and Service Delivery in

Physical Infrastructure and  Service  Delivery in Health;
and Road and Rail Infrastructure Development.

The Medium Term Debt Strategy and Debt Sustainability Analysis

87. Mr. Speaker, the  debt  strategy for the  medium term would be  to manage the  public  debt  at  the  lowest  cost and  at  prudent levels of risk to bring our debt  to GDP ratio to 65 percent over the medium term.

88. Consequently,  in accordance with  the  requirement  of  the Public Financial  Management Act, 2016 (Act 921), my Ministry will conduct and  publish  a  Debt  Sustainability  Analysis  (DSA) and update the MTDS to guide the borrowing plan and operations. The reports will inform policy decisions, leading  to the reduction in the debt  burden and insulation against other  fiscal vulnerabilities.


89. Mr. Speaker,  the  sectoral policies  are  designed to achieve our broad  objectives of jobs and wealth  creation and macroeconomic stability while ensuring compliance with the PFM Act. Permit  me  to update this august House on the performance of  some key  sectors of  the  economy and  the
outlook  for  2017  and  the  medium  term.  I  will begin  with  this

August House;


90.  Mr.  Speaker,  Parliament  continued  to  discharge  its mandate through the consideration of 181 Papers including  25
Bills, four Legislative Instruments (L.Is), eight Constitutional Instruments (C.Is), 19 Loan Agreements and 39 Committee Reports. Out of the 25 Bills laid, 18 were passed into law.

91.  Parliament  also  facilitated  the  establishment  of  the Scrutiny  Office  to  provide  expert  analysis  of  policy  measures on Bills, the budget, loan agreements and international financial transactions brought before the  House for approval.   In 2017, the  Office will be strengthened to undertake pre-legislative scrutiny of bills through research and  information pursuant to the PFM Act.

92.  Mr. Speaker, Parliament will complete the  review of its Standing Orders to open  up committee meetings to the  public and empower committees to undertake independent investigations,  and  summon witnesses  and  government officials to appear before it.

93.   The  Parliamentary  Training  Institute  established  in  2016
will be strengthened to undertake and  promote research in parliamentary  democracy. A Strategic  Plan  for the  take-off  of the Institute will be developed in 2017.


94.   Mr Speaker,  the  government recognizes  agriculture  as the main  anchor of the  country’s economy. Unfortunately we have witnessed a steady decline  in the  sector and  production levels have fallen consistently over the years. In the medium term, we intend   to  modernize  the  sector to  improve   productivity   and achieve food security and profitability for our farmers.

95.   Mr Speaker,  in 2017  government will launch  the  “Planting for Food and Jobs” campaign.

96.   The  campaign  is  designed  to  encourage all citizens  (both urban  and rural) to take up farming  as a full or part-time activity. It is intended to structure it along the lines of the erstwhile “Operation Feed  Yourself” (OFY) programme in the  1970s. The campaign  will involve  the  production  of  maize,  rice,  soybean, sorghum and  vegetables. Other crops will be adopted in subsequent years.
97.   The campaign will be anchored on five pillars namely:

· Provision of improved seeds;
· supply of fertilizers;
· provision of dedicated extension services;
· marketing and
· E-Agriculture and Monitoring.

98.   This  initiative  is  expected to  increase  the  production  of maize  by 30 percent from  current production levels, rice by 49 percent,  soybean  by 25  percent and  sorghum by 28  percent. This will create 750,000 jobs in both  direct  and  indirect employment.

99.   The  Ministry  will import  improved  seeds to  augment any shortfall for the “Planting for Food and Jobs” campaign.

100.  Mr. Speaker, in 2017, the Ministry will continue the Fertilizer Subsidy   Programme  to   help   increase   the   productivity    of farmers. To this  effect,  we intend  to  distribute  nationwide,  an expected 180 thousand metric  tonnes of subsidized fertilizer.


101.  Mr. Speaker the  fisheries  subsector employs  a significant number of our people especially along  the  coastal areas. Over
the  past years,  efforts have  been   made to  also  boost both marine   and   inland   fishing  and   support  aquaculture development. However  we believe  that  we need  to modernize the artisanal fishing methods to ensure sustainable fishing and also improve  production levels.

102.  To modernize and  transform the  industry, the  Ministry will complete  phase  one   of  the   Anomabo  Fisheries  College   to enhance research and  knowledge-base in fisheries technology for  all  operators. It  will also collaborate with  relevant institutions  and  the  private  sector to  develop  modern landing sites and  storage facilities at  James Town, Cape  Coast, Axim and Mumford.

103.  Mr. Speaker the country’s industrial sector faces significant challenges. The principal  ones of which  are  lack  of access to finance, high interest rates, inadequate and poor quality raw materials for industrial processing, poorly developed domestic trade  and an unreliable and expensive power source.

104.  The   goal   of  government  over   the   medium   term   is   to address these challenges in ways that  enable industry to thrive and  become a major  source of jobs especially for the  youth.  A number of major  policy interventions will be  initiated  this year
as part of this strategy.

105.  In 2017, the Ministry will roll out its district level component of  the  National  Export  Strategy to  develop one  export commodity in every district.

106.  In  2017,  the  Ghana  Commodities  Exchange (GCX) project will establish a state-of-the-art, transparent, and  professional market institutions to create an orderly, transparent and  ready market for goods that are produced by farmers in the country.


107.  Mr. Speaker,  Tourism,  Culture  and  Creative  Arts  remains one   of  the   most  underdeveloped   sectors  in  our   economy despite the immense growth  potential and opportunities for job creation.

108.  When developed, the  sector can  positively impact the  lives of  many  individuals,  families,  communities  and  small enterprises in our country  and providing needed jobs for our teeming youth.  Our objective is to transform the country  into a major Meeting, Incentive Conference and Exhibition center (MICE).  To  facilitate  this  we  will  aggressively  develop  our
tourist sites to bring them  to world class standards.

109. In 2017, the  Government will kick start the  Marine  Drive Tourism  Investment  Project  covering   the  over  240  acres  of land from Osu Christiansborg Castle to the Arts Center.  This project  will transform the beach area  into a tourism enclave to create jobs for our teeming youth.

110.  The  Ministry  will partner the  private  sector to  develop  the Efua Sutherland Park into an ultra-modern world class Park. Specifically  for  2017,  Mr. Speaker,  we  will use IT to  promote and market tourism via the single portal window.

111.  Mr. Speaker, the Ministry will also undertake a food festival to showcase the  diverse rich Ghanaian foods through cooking competition throughout the country.


112. Mr.  Speaker,  this  government  intends  to  ensure that Ghanaians  enjoy  reliable,  efficient   and   affordable  power   to provide  comfort in their  homes and  support the  development and growth  of their businesses.

113.  In 2016, significant efforts were  made to address some of
the  challenges  in the  sector. This  include  an  increase  in the total installed generation capacity by 880MW. In 2017, Government will continue  to  increase  the  installed  generation capacity   of  the   country   to   meet  the   growing   demand  for electricity.  A total  of 1227MW  of installed  capacity  scheduled to  be  added  include:   370MW  AKSA project,  107MW  GPGC project, 350MW CenPower Project and 400MW Early Power Project among others.

114.  Mr. Speaker,  ECG and  NEDCO will continue  with  system upgrade projects to improve  the quality of power supply to customers. Furthermore,  steps would  be  taken  to ensure that outstanding   issues   surrounding   the   implementation   of  the Ghana   Compact  II   are   addressed,  to  allow  for  its implementation, in order to achieve the desired objectives.

115.  Mr. Speaker with  regards to  oil and  gas,  Government will work  with  the  Jubilee  Partners to  address the  shortfall  in oil and  gas production  resulting  from  the  2016  damage on  the turret  bearing on FPSO Kwame Nkrumah  and will adopt a three phase approach to  convert the  FPSO  Kwame  Nkrumah   to  a permanently spread-moored. First gas from the TEN field to the Gas Processing Plant (GPP) is expected in the first half of 2017. GNPC is engaging with the partners to develop an integrated technical and commercial schedule that  will target gas start-up
in the 2nd  quarter of 2018.

Railway Development

116.  Mr. Speaker,  this  government believes  that  rail  will be  a major   catalyst  to  drive  the  growth   that   we  envisage  in  the coming  years. Rail transportation  provides  safer,  cheaper and faster way of moving  goods and  people to facilitate trade  and support economic activity. Our vision is to open  up the country and  provide  new  opportunities  to  our  people  to  do  business and trade  among themselves.

117. In that  regard, government will complete the  Sekondi  to Takoradi  via Kojokrom  section  and  continue  with  the  section from Kojokrom to Tarkwa through Nsuta. This will help improve the operational performance and revenue of Ghana  Railway Company Limited (GRCL) and  enable the  Company wean  itself from  Government support. In addition, it will enhance the performance  and   competitiveness  of  the   manganese  mine located on the corridor.

118.  Work  will commence on  The  Western Line  which  starts from  Takoradi   and  terminates  at  Kumasi  having  two  branch lines  namely;  Dunkwa  to  Awaso  and   Kojokrom  to  Sekondi, covering  a  distance  of 340km.  The  corridor  when  completed, will facilitate  the  haulage  of  manganese,  bauxite,  cocoa and
other  bulk commodities. The Feasibility Studies and  Front  End

Engineering Design (FEED) have already  been  done  on the Line.

119.  We will also initiate  discussion to secure funding  for other major projects, such as, the Central Spine which stretches from Kumasi to Paga covering  a distance of 700km.  The corridor  is a greenfield and  will be  developed in sections. The sections are Kumasi to Buipe and  Buipe to Paga. A prefeasibility study was undertaken on the  line, and  in 2017, we plan  to undertake full feasibility  studies  to  enable  the  Ministry  to  invite  developers and source funding for the development.

120.  The  Eastern  Railway Line will cover  a  distance  of  330km and   starts  from   Accra   to  Kumasi  with  a  branch  line  from Achimota to Tema.  When the  line becomes operational, it will decongest the  port  and  facilitate  the  movement of cargo and passengers to Kumasi and its environs.

121.  The  Central  Railway  Line will cover  a  distance  of  200km and  spans from  Kotoku  on the  Eastern Line to Huni Valley on the  Western Line. It will have  a  branch line  from  Achiase  to Kade and  we plan to undertake feasibility study on the line and extend it to Kibi.


122.  Mr. Speaker,  government recognizes  that  the  dream of all Ghanaians, is to own a home  or at least to have  decent rental accommodation. There  are, however, major  constraints to this dream. These include:
· The high cost of buying and renting  a home;
· Undersupply of annual requirements of housing units;
· Lack of long term financing for real estate development; and
· Lack of appropriate financing arrangement.

123. To  reduce  the   housing  deficit,  government  will  use appropriate mix of public  policy and  public  private  investment to deliver quality, affordable, housing solutions that  meets the needs and financial  capacity of ordinary Ghanaians.

Water and Sanitation

124.  Mr. Speaker, major  water  project  to be undertaken in 2017 would  include,  the  continuation  of  the  Greater   Accra Metropolitan Area (GAMA) water  extension projects as well as those of Kumasi and Cape Coast. The Kpong, Akim Oda and Ho water  expansion  projects,  Tono  Water  Treatment project   for
the  Upper  East  Region  in Navrongo,  as well as those of  the Yendi  and  Damongo  will be  undertaken whilst  the  Wa project will be completed. Preparatory works for the  Sunyani  and Techiman   as  well   as  the   Sekondi-Takoradi   water    supply projects will be finalized.

125.  In  addition,  Mr. Speaker,  will complete  the  ongoing  1,000 boreholes projects and also initiate  the construction of at least
2,000 boreholes across the  country  as part  of the  drive to get us closer to the desired goal of ‘Water for All’.

126.  In  20I7,  the  Ministry  will pursue a  Comprehensive  Sludge

Management Programme (CoSMaP)  targeted at  constructing

2No. Faecal Sludge  Treatment Plants in Sekondi-Takoradi and Tamale Metropolitan Areas with the objective of stemming the disposal of faecal matter into water  bodies and drains. The Ministry will also provide appropriate uniform  and identification for 4,500 Environmental Health Officers nationwide to ensure visibility   and   enforcement  of  environmental   sanitation   and basic hygiene  bye-laws.

Roads and Highways
127.  The  Ministry  maintained  its  focus on  routine  and  periodic maintenance activities to protect the huge  investment made by Government in the provision of the road  infrastructure. In 2016, routine      maintenance      activities      were      undertaken     on
10,723.49km  (90  percent of  the  approved work  plan)  of  the trunk  road   network;  16,183km  (72  percent  of  the  approved work  plan)   on  the   feeder  road   network;  and   9,384km   (94 percent of the approved work plan) on the urban  road network.

128.  Mr Speaker,  inspite  of the  major  investments  made in the road  sector,  we  continue  to  have  major  challenges.  The  past few years  has recorded a significant  increase in the  award  of contracts,  leading   to  a  large  portfoli  of  projects  that   are  in excess of what  our budget can  accommodate. This has led to delayed payments and the resultant penalty  payments, accumulation  of  arrears  and   unacceptable  poor   quality  but costly road construction.

129.  There  are  also   the  issues of limited  contractor capacities leading  to substandard work, encroachment of right of way and lack   of  maintenance   and   care.      In   2017   government  will undertake a  review  to  of  existing  projects  to  bring  them   to more   sustainable  levels  and  within  available  funding. Monitoring  will be  strenghtened and  efficiency  measures followed.   New  peojects  will only  be  accomodated after   this
review and within the allowable fiscal space

130.  In   the   meantime   maintenance   work   will  be   continued. These  will  include   11,900km,   22,950km   and   10,200km   of routine  maintenance activities (grading, pothole patching, shoulder maintenance, vegetation control)  on trunk, feeder and urban  road networks respectively.

131.  The Ministry will also undertake minor  rehabilitation works on 60km  of trunk roads, 350km  of feeder roads and  100km  of urban  roads.

132. In 2017, 195km  of trunk roads and 25km of urban  roads will be  constructed. Some  of  the  key  roads programmed for construction include;

· Construction of Bridge on the Volta River at Volivo

· Nsawam - Apedwa  Road(Kwafokrom – Apedwa  Road)

· Tamale – Yendi Road

· Bolgatanga – Bawku - Polmakom

· Nkwanta - Oti Damanko Road

· Oti Damanko - Nakpanduri Road
· Berekum  – Seikwa Road

· Enchi - Dadieso Road

· Kasoa Interchange and Ancillary Works

· Dualisation of Ho Main Roads

· Construction of Ho Bypass

· Construction of Obetsebi Lamptey  Interchange

· Construction of Pokuase Interchange

· Kumasi Roads and Drainage  Extension Project


133.  The mandate of the Ministry is to provide  equitable access and quality education to all Ghanaians to make  them  functional citizens in order  to contribute to the  growth  and  development of the country.

134. Over the medium term, Government aims is to shift the structure and  content of Ghana’s education system away  from merely passing examinations to building character, nurturing values and raising literate, confident and engaged citizens who can think critically.

135.  To overcome this challenge, Government will also redefine basic education to include  secondary education, covering technical, vocational and agricultural education.

136. As  part   of  this  initiative,  Basic  Education  Certificate Examinations  (BECE) will be  used as a  tool  for placement  of students into second cycle schools and not for certification.

137.  To  improve   the  quality  and  relevance  of  education,  and further  make  the  products of our  school  system  competitive, Government will review  the  Basic level curriculum to focus on the four R’s (Reading, wRiting, aRithmetic and Recreation to include  life skills and creative skills). Government intends to ensure that  all our  children  have  these basic  skills  when  they exit the Primary School  system.


138.  The  health  sector continues  to  grapple  with the  challenge of  bridging  the  equity  gap  in  access to  healthcare  between urban  and  rural  as well as the  rich  and  poor,  production  and distribution of health  personnel, high under  five and maternal mortality   rates and   neglect  of  the  mental  health   subsector resulting in huge unmet need  for mental health  services.

139.  In 2017  there  will be  improved coverage of antenatal care services   and   delivery  by  skilled   attendants  is   expected  to increase from the 2016  targets of 78 percent and 53 percent to
80 percent and 55 percent, respectively. The target for fully immunized children  will be  maintained at  above  90 percent in 2017.


140.  Gender and Social Protection

Mr. Speaker, following the conclusion of the Millennium Development Goals (MDGs) in 2015, Ghana  joined the  world in developing the Sustainable Development Goals (SDGs) which was endorsed by the United Nations at its 70th  session in September, 2015.  The SDGs is adopted globally to end poverty, protect the planet and ensure prosperity for all.
In order  to fight extreme poverty  and vulnerabilities and ensure that  no  group  is disadvantaged and  left  behind  in the development process, government is committed to improve  on social protection policy implementation and systems.
The Ministry of Gender, Children and Social Protection will facilitate  the  passage of  the  Affirmative  Action  Bill and  the Domestic Workers Bills. We will refocus the  LEAP programme and    adopt   effective    means   of    targeting    and    enrolling
beneficiary  households.  The  School  Feeding   Programme will also  be  reviewed   to  make   it more  transparent and  effective and linked to the agriculture sector initiatives.


141. Mr. Speaker, the  youth  will drive the  discovery of new technologies,  innovation  and  growth  in the  future.   Our focus over the  medium term  is to create an enabling environment to build the  capacity of our youth  to take  on more  active  roles in our  country’s  future  and  its  development.  A number of policy initiatives we are rolling out are targeted at the youth.

142.  In the area  of sports development feasibility studies will be completed  to  facilitate  the   expansion  of  the   infrastructure stock and  transform the  National  Sports College  into a Centre of Excellence, through Public Private  Partnership (PPP) arrangements. Additional  efforts will be made to support other disciplines starting from our school.


143.  Mr.   Speaker,   despite   the    major    macroeconomic   and structural challenges we face  as a nation, we believe  that  with the  appropriate  policy  interventions,  we  will set the  stage for
job-creation opportunities, ease hardships and  secure a bright future    for   our   families,   businesses   and    industries.   The following   policy   initiatives   are   therefore  designed   to   help improve  the business environment, instill fiscal discipline and promote investment in critical  infrastructure especially in rural and deprived  communities.


Tax Incentives

144.  Mr.   Speaker,   a   number  of   tax   measures  have   been introduced  in recent years  in an  attempt to  deal  with revenue shortfalls. Some  have  proven  to be nuisance taxes. They have low revenue yielding potential and at the same time impose significant burden on the private  sector and on the average Ghanaian. As part  of our commitment to reenergize the private sector,   Government has  decided  to  review   these  taxes  to provide  relief for businesses. The following  specific measures shall be implemented in the short to medium term:
· abolish the 1 percent Special  Import Levy;
· abolish the 17.5 percent VAT/NHIL on financial  services;
· abolish  the  17.5  percent VAT/NHIL  on  selected  imported medicines, that are not produced locally;
· initiate steps to remove import  duties on raw materials and
machinery for production within the  context of the  ECOWAS Common External Tariff (CET) Protocol;
· abolish  the   17.5   percent  VAT/NHIL  on  domestic  airline


· abolish the 5 percent VAT/NHIL on Real Estate sales;
· abolish excise duty on petroleum;
· reduce special petroleum tax rate  from  17.5  percent to 15 percent;
· abolish duty on the importation of spare parts;
· abolish levies imposed on kayayei by local authorities;
· exempt from taxation, the gains from realization of securities  listed  on  the  Ghana  Stock  Exchange or  publicly

held  securities  approved by  the  Securities  and   Exchange

Commission (SEC);

· reduce National  Electrification Scheme Levy from 5 percent to 3 percent;
· reduce Public Lighting Levy from 5 percent to 2 percent;
· replace the 17.5 VAT/NHIL rate  with a flat rate  of 3 percent for traders; and
· implement tax  credits and  other  incentives for businesses that hire young graduates.


145. Mr. Speaker, while Government’s focus is on reducing taxes
to enhance production, we are also determined to tackle  the systemic abuse in the exemptions regime. There shall be a comprehensive    review    of    the    regime     on    import     duty exemptions  and  tax  reliefs  with  a  view to  eliminating  abuses and improving efficiency  in the applications of these incentives. To this end, the  review will cover, among others, the  following exemptions and tax reliefs as a matter of urgency:
·import  duties, taxes and  levies payable by MDAs and

other  government departments;

·import duties and all forms of taxes and levies payable by both  domestic and  foreign  companies, suppliers and  contractors  executing  projects  and contracts  in  the country;

·import duties and all forms of  taxes  and levies payable by employees, directors and senior officials of both domestic and  foreign  companies, suppliers and  contractors executing projects in the country; import duties and all forms of  taxes and levies payable by both domestic and foreign companies and investors doing business in the country; and import duties and all forms of  taxes and levies payable by non-governmental and charity organisations. 146. Mr.  Speaker,  as a  transition  arrangement,  henceforth, applicants  for  these import duty exemptions  and  tax  reliefs shall be required to, except in exceptional circumstances to be determined by the  Minister for Finance, pay fully all applicable import duties and taxes, and apply with justification for refund.


147.  Government  believes   in   empowering   the   local   private sector and  will pass legislation  to  require  that  over  time,  at least  70  percent of all government projects  and  procurement are  executed by local  corporations  and  enterprises,  with  set asides  for  entities  owned  by women,  persons with  disability, and  those established under  the  Youth Enterprise Fund  (YEP), among other  initiatives.

148.  Government  will  introduce  and   enforce  a  local   content policy, for government projects and procurement that  will focus on job creation and local value addition, with emphasis on skills improvement.  To  ensure  the   success  of  this  policy, Government  will require,  among  other   things,  a  job  impact analysis of all qualifying projects that must demonstrate clearly, positive  job  creation  with  skills  improvement,  and  other  local value  addition  that  must passes strict  criteria  established  by government. LI 2204,  which  was passed in 2013  to maximize
value addition and job creation through local value addition, will be expanded and  legislated as local country  content for the country.

Job Impact Analysis

149. In the push towards job creation and skills development, Government will introduce a mandatory job impact assessment for  all  public-sector  projects  or  initiatives.  Job impact assessment will also be required of private-sector entities that access  government projects  or  contracts. In  other  words,  all public-sector  projects  whether  it  is  executed  by  the  public- sector or the  private-sector contractors must undergo a job impact   assessment  to   evaluate   the   potential   job   creation impact.  This  will enable  Government to  analyze  how  various jobs are  being  created so as to better structure incentives and stimuli for higher skill jobs and opportunities for Ghanaians.

Banking Sector Initiatives

150.  Mr. Speaker, banks play an important role in our economy. Despite past interventions, the banking  sector still faces major challenges.  We  are  committed  to  working  with  the  financial sector to  resolve  these challenges.  A strong private   sector credit   growth   is  needed  to  support  our  medium-term  GDP growth  to increase productivity  and create jobs.
151. We will harmonize and  streamline some of the  existing policies to make  the sector more  efficient. Policy interventions will focus on improving  liquidity for banks through the payment of SOE related debt  due  banks over the  short to medium-term in line with our debt  sustainability framework.

152.  Specific   measures  to  be  implemented  in  2017   and   the medium term include:
· streamline  the  Energy  Sector Levy  Act,  2015   (Act  899,)

(ESLA) to accommodate all the existing legacy  debts for the banking  and  the  private  sector, which  include  energy  sector debt, Bulk Distribution Companies (BDCs), and  other  energy sector related debts;
· ensure that  revenue streams from  ESLA are  properly  used

to ensure certainty of cash flow for the payments of all corresponding debts; and
· work with commercial banks to ensure that  they are able to

issue bonds on the back of the streamlined ESLA revenue for immediate liquidity.

153. In  addition,  the  Bank  of  Ghana   in  collaboration  with Government, will undertake the  following  structural reforms to the banking  sector:
· Increase     the     banking      industry’s     minimum     capital
requirements  and  strengthen the  licensing  and  regulatory framework.
· Introduce risk capital requirements in addition to minimum

capital requirements for banks;

· Strengthen corporate  governance  by  enforcing  the  term limits for Board Chairmen and Managing Directors of

commercial banks in accordance with the Banking Act;

· Enhance enforcement of single obligor limit for commercial banks; and
· support mobile  money  and  mobile  banking  businesses  to enhance and expand financial  inclusion.

154.  We  believe   that   all  these  measures  will  help   minimize systemic risks in the banking.

Capital Market Development Initiatives

155.  Mr.  Speaker,   the   growth   of  Ghana’s   capital   market  is impeded by lack of depth and liquidity. Addressing these challenges require  the implementation of decisive measures in the   short  to  medium  term   to  deepen  the   capital  markets, increase liquidity and trading  activities and encourage more companies to list.

156.  The   specific   measures  to   be   implemented   to   improve
capital  market  performance  in  2017   and  the  medium  term, include the following:
· exempt  from   taxation,   the   gains   from   realization   of

securities  listed  on  the  Ghana  Stock  Exchange or  publicly held securities approved by the Securities and Exchange Commission (SEC);
· exempt the  financial  services industry from  stamp duty for

2 years to enable the  re-capitalization of the  industry as per the new SEC law;
· encourage a capital market local content policy that  enjoins

companies operating in the energy, oil and gas, financial services,  telecommunications,  and  mining  sectors to  list  a minimum percentage of their shares on the Ghana  Stock Exchange within  5 years  of  commencement of  operations; and
· Divest Government’s holdings in some SOEs with a view to

ensuring efficiency. This will include  the  sale of government shares in some SOEs  and  companies  via  a  listing  on  the Ghana Stock Exchange.
· We will work with the Securities and Exchange Commission

(SEC) to   develop the regulations governing Asset-backed instruments  including  Real Estate  Investment  Trusts (REIT) and mortgage-backed securities and enable the pensions industry to support the development of these assets classes
and other  alternative investment schemes.

157. Mr Speaker,  the  National  Pensions Regulatory  Authority (NPRA) will be moved  back  to be under  the Ministry of Finance and  the  Ministry of Employment and  Labour  Relations. This is because,  just  like  the  SEC,  the  NPRA is  a  financial   service regulator but of the pensions industry that  also deals with a lot of Labour issues. Pensions are about finance:
· Financial  contributions;
· Financial  investments; and
· Benefit payout.

158.  All the  above  are  financial  decisions  affecting  employees hence the decision to have joint oversight by the two ministries. Additionally, NPRA will be completely weaned off in 2017.

Building an Entrepreneurial Nation

159. Mr.   Speaker,   this   government  seeks   to   build   an entrepreneurial nation.  The National  Entrepreneurship and Innovation Plan  (NEIP) is a flagship initiative  which  will be the primary  vehicle  for  providing  an  integrated,  support for  early- stage  (start-ups   and   small)   businesses,   focusing   on   the provision  of  business  development  services,  business incubators, and funding for youth-owned businesses.

160.  The  NEIP will enable  qualified  new  businesses  to  emerge and  give  them   the  space to  grow,  position  them   to  attract financing, and provide  business development support services. The programme will assist these businesses to secure markets during  the  critical  formative  years,  and  tap  into  a wide  supply chain and network  during their growth  years.

National  Industrial Revitalization Programme – A Stimulus

Package for Industry

161. Growth  in the  industrial and  manufacturing sector has significantly  declined  over   time,  contributing  to   an unprecedented level of unemployment. This situation could  be attributed to a variety of factors including, but not limited to the high cost of capital; limited access to medium to long term financing; high cost of electricity  and  unreliable power  supply; limited  access to  land  for  industrial  activity  as well as weak logistic and infrastructure support for industrial development.

162. It is against this background that  a  National  Industrial Revitalization Programme with a stimulus package for industry will be established to provide technical and financial  support to existing companies  that  are  currently  distressed or are  facing operational challenges, but  are  deemed to be viable to benefit
from  the  stimulus package which  will put them  in operation in the shortest possible time.

Industrialising  Ghana  from  the  Ground  Up: One  District,  One


163. “One District, One Factory”, implementation of which will commence  this   year   and   be   closely   intertwined   with   our “National Industrial Revitalization  Programme”,  is  designed as a comprehensive  programme for rural  industrialisation,  driven by the private sector and involving the setting up of at least one medium  to  large  scale  factory   in each of  the  administrative districts of Ghana.

164.  It   is   aimed    at   creating   massive   youth    employment, especially in rural and peri-urban communities, add value to the natural  resources  of  each  district,  ensure even   and   spatial spread of industries to stimulate economic activity in different parts  of   the    country,    enhance   the    production   of   local substitutes for imported goods, and promote exports and increase foreign exchange earnings.

165.  It has the potential of transforming the industrial landscape of   Ghana,   and   will  contribute   significantly   to   the   socio- economic  development  agenda of  the  country.   We  estimate that  over  350,000  direct  and  indirect  jobs  would  be  created
from all parts of the country, as a result of the implementation of the programme.

National  Identification Programme

166.  Mr. Speaker, the  benefits of having  a modern, reliable  and unique  national identification system are enormous and imperative for the  development of our nation.  A robust identification  system  and  the  issuance  and  use of integrated, multipurpose  national  identification  cards would  enable  us to advance economic,  civic and  social activities  in Ghana  and  to target particular developmental programs.

167.  It is against this background that  the National  Identification Authority  (NIA) was established in 2007  to oversee the registration of all residents in Ghana.  However, a decade later, the  NIA has made limited  progress. In consonance with Government’s commitment to reenergise the NIA to fulfil its statutory  mandate,   the   new   leadership   of  the   NIA  will  be supported and resourced to be more  effective.

168.  Government has commenced stakeholder consultations to revive and  roll-out the  National  Identification Scheme in 2017. All registered  persons will be  provided   with  a  Unique Identification Number, and an ID Card. Subsequently, a national
ID Card shall be required for the provision and efficient  delivery of  public   and   private   services,  including   financial   services, mobile banking, m-commerce, social safety nets, health insurance, and revenue collection among others.

National  Digital Addressing System

169.  Mr Speaker,  the  last  time  the  whole  country  was mapped was in 1974.  The lack of modern property  addressing system in Ghana  is a serious impediment to our developmental agenda. As part of our plans to enhance economic development and growth, Government has commenced stakeholder consultation to  develop  and  implement  a  National   Digital  Property Addressing System for the country  in 2017.

170.  The aim  of the  National  Property Addressing System is to have digital addresses for parcels of land and properties of the entire  country.  Every land or property  will be assigned a unique identifier.  This is aimed  at facilitating improved ownership data and  unique  identification of properties. A proper  addressing of properties  will ensure efficient   delivery  of  services  for economic development.
E-Services Portal

171. In  order   to  improve   efficiency   of  service  delivery  by government institutions  with regard to  acquisition  of licenses and   payment  for   services,   Government  established   the   e- services portal (http://www.eservices.gov.gh/) in 2012. This platform has helped in the delivery of government services (licenses and  permits, etc.).  Government will expand coverage to  all parts of  the  country  and  improve  efficiency   of  service delivery through private  sector participation in the e-services portal.  This is expected to help reduce corruption, promote compliance and improve  the tracking of government resources.


172. Mr. Speaker,  our  country  continues  to  grapple  with  weak expenditure management and budgetary controls leading  to excessive expenditure overruns and  payment arrears resulting in persistent  fiscal  deficit.  Prudent expenditure  management and commitment controls are, therefore, very crucial in order to achieve the goals and objectives of the budget.

Enforcement of the PFMA

173.  Mr. Speaker, the Public Financial  Management Act, Act 921, passed by Parliament and enacted into law in August 2016  has the  sole  objective  to  strengthen  the  public  financial management  system  in  the  country.   The  Act  regulates  the
financial  management of the public sector within a sound macroeconomic  and  fiscal  framework;  defines  the responsibilities of persons entrusted with the management and control  of public funds, assets, liabilities and resources in a manner consistent with the level of public debt; provides for the accounting  and  audit  of  public  funds;  and  provides  for  more robust sanctions and penalties.

174.  The effectiveness of the  law depends to a large  extent on strong enforcement and  compliance with its sanctions regime. Government will ensure that  the  robust sanctions regime provided  for in the law is complied with by all Public Institutions. The required institutional arrangements, including functional independent  Audit Committees,  will be  addressed to  promote and enhance the effectiveness of the law.

175. Mr.   Speaker,    in    addition    to    the    assignment    of responsibilities  and  enforcement of sanctions,  two  provisions are  crucial  for the  effective implementation of the  law. First, is the Commitment Control provisions to curb the build-up of expenditure arrears.  Second, is the provisions that prohibit MDAs  from   entering  into  agreements  with  financial commitments   that    bind   Government   for   more    than    one financial  year or that  results in contingent liability, unless approved  by   the   Minister   of   Finance   and   authorized   by
Parliament.  These  we  must strictly  adhere to  if  we  are  to ensure sound public financial  management.

176.  To fully operationalize the law to enhance budget credibility, Government will ensure the  introduction of the  necessary regulations  to  support  implementation  of  the  law,  in collaboration  with  PFM  stakeholders  for  effective implementation of the Act. Government through the Ministry of Finance will strengthen oversight of SOEs and  Public Corporations,  as well as,  Local  Government,  to  help  mitigate fiscal risk emanating from contingent liabilities.

177.  Mr. Speaker, to facilitate adherence to the provisions of the law,  the   Ministry  will  continue  with  the   sensitization programme  for  Public   Institutions  at  the   National   and   Sub National  levels as well as for key Stakeholders including  CSOs, media, professional bodies and the public at large.

Establishment of the Fiscal Council

178. Ghana  has been  faced with significant, long-term fiscal slippages and an escalating public debt  stock leading  to a high risk of debt  distress. This is principally due  to the fact  that  our fiscal policy implementation lacks a transparent institutional arrangement  for  providing   quality   fiscal  information  to  the public,     a     mechanism     for     ensuring     accountability     in
implementing optimal  fiscal policies  to guarantee the  stability of  the  system,  and  an  institution  to  ensure the  credibility  of fiscal projections provided  by the Government.

179.  To   address  this,   Government  will  initiate   the   process towards the  establishment  of a Fiscal  Council  that  will adopt and  implement  rules  to  anchor fiscal  policy  implementation. The Fiscal Council will contribute to the  accountability of Government, responsible for setting up medium-term fiscal policy anchors to guide  fiscal policy as well as monitor compliance. The principal objectives for the formation of the Fiscal Council are to:
· ensure the credibility of our fiscal projections,
· set up  medium-term  fiscal  policy  anchors to  guide fiscal policy, and
· monitor  compliance of fiscal policy rules.

180.  Legal backing will be given to the Fiscal Council through an amendment of the Public Financial  Management Act, 2016 (PFMA),  Act  921,  to  inter  alia  capture all  the  elements  of  a fiscal responsibility law.

Re-alignment of Statutory Funds

181.  Mr.  Speaker,  as the  President  noted in  his  State of  the
Nation Address on the 21st February  2016:

182.  “[T]he reality of the  state of Ghana’s public  finances today are  quite  stark. Today,  as a  result  of  policy  choices,  we  find ourselves   in   a   situation   where    Ghana’s   total   revenue  is consumed by three  main  budgetary lines: wages and  salaries, interest payments and amortization, and statutory payments. These three   items  alone   account for  99.6  percent  of government revenue. This means that  anything  else that government has to  do  outside  of  these lines,  will have  to  be financed   by   borrowing   or   aid.   The   persistent   resort  to borrowing  for  any  additional  expenditures  to  meet the aspirations of our people is also not sustainable.  We cannot continue this way with our public finances” (State of the Nation Address, 2017).

183.  Indeed,  this  problem  of lack  of fiscal  space in the  current budget architecture  and  the  problems  associated  with earmarking was rightly recognized by the  NDC Government in the  2010,  2011,  2015  and  2016  budget statements.  In  these budget statements, the then  Ministers for Finance noted the following:
· “Statutory funds introduce extreme inflexibility in the

management of the budget, giving no room for policy
manoeuvre.  Given  the  important  social  interventions  that need  to be scaled up and/or implemented, some key government programmes will have  to be offloaded from  the core  budget to the  statutory funds, in order  to create space for   the   utilisation   of   discretionary   expenditure   in  other priority areas.” – 2010 Budget  Statement.
· “…over 75 percent of the total  wage  bill and the associated

increases  resulting  from  the  Single  Spine  Salary  Structure goes  to   employees   in   only   three    MDAs,   namely    the Education, Health and Local Government, which ironically are the   very  sectors with  the   statutory  funds  that   introduce rigidities  in  the   budget  structure  and   leaves  no  revenue space for the sustainable implementation of the Single Spine Salary Structure.” - 2011 Budget  Statement.
· “Mr. Speaker, the  national budget is increasingly becoming

inflexible to manage as well as to accommodate shocks and changes in government priorities.  These are  mainly  due  to the   earmarking   of  a  huge   component  of  the   budgetary resources as statutory transfers in addition to  existing statutory liabilities, such as wages and salaries, amortisation, and interest payments…. Mr. Speaker, in the medium term, government  will realign   expenditures  under   the   Statutory Funds  hitherto  being   catered  for  under   the   Consolidated Fund.  Starting  with  the  2015  Budget  and  as a  transitional arrangement,  government  will enhance the  administrative
process for aligning  statutory fund  expenditures to national policies and priorities.” - 2015 Budget  Statement.
· “To  address the  increasing  rigidities  in  the  budget  that

limits  the  room  for  policy  manoeuvre,  Government announced a policy of aligning the statutory and internally generated funds to national fiscal goals in the 2014  Budget. Consequently,  in  2016,  Statutory  Funds  expenditures totalling  GH¢564.6  million will be realigned to the  central Government budget.” - 2016 Budget  Statement.

184.  In 2016, transfers to the  earmarked funds constituted 33.5 percent of  national  revenue,  up  from  28.2  percent in  2015. These rigidities  mean that  government’s  ability to  shift  public spending from one expenditure line to another is hindered even where  current exigencies require  government to do so. Consequently, it has become difficult to use public spending as an instrument to respond adequately to changing public needs.

185.  Further,  these increasing  statutory  rigidities  have  limited our flexibility and impeded our ability to meet our commitments, especially  capital  expenditure.  As  such,  we  continue  to  miss our  obligatory  disbursements  to  the  Statutory Funds due  to wishes to fulfil other  commitments.

186.  Mr. Speaker, in sum, we have  been  unable, as a nation, to
comply  with our statutory and  budget requirements in respect of earmarked funds because they impose unhelpful  rigidities in our public expenditure and development strategies.

187.  Notwithstanding the  recognition of the  underlying  problem with the lack of flexibility and space in the budget as a result of the  earmarking  of  funds,  we  have  not  tackled  the  problem. After many  years of talking about it, this budget is finally going to tackle  this problem.
188.  Mr. Speaker,  starting  this  year,  government will propose a cap of 25 percent of tax revenue to all Earmarked Funds for the approval of this august House. The capping of transfers to Earmarked  Funds  to   25   percent  of   tax   revenues  in  any particular  year  will allow  a realignment  of budget revenues to government priorities and in fact make  possible increased expenditure on government priorities such as education, health, agriculture  and   infrastructure.  However,  we  will  make adjustment for constitutionally-mandated earmarked funds to make  them  whole.

Treasury and Risk management

189. Mr. Speaker, efficient  budget implementation requires a proper   alignment   of   cash  inflows   and   outflows.   This   will improve  the predictability of budget implementations and  cash
allocations. In line with this, Government will strengthen its treasury management functions by creating a Treasury Management  Unit  in  the   Ministry  of  Finance  to  handle  all treasury management and related functions.

190.  The  current PFM law will be  enforced with regards to  the utilization  of  the  Treasury Single  Account  (TSA). To this  end, the  bank  accounts of all government institutions will be transferred to  the  Central  Bank  for ease of management and monitoring.

191.  Additionally,   Government  will  eliminate   all  payments   in cash at service delivery points in public service institutions, including  MDAs and  MMDAs, in order  to improve  efficiency  in service delivery and revenue collection to support the TSA.

Improving Payroll Management

192.  Mr. Speaker, the size of the public-sector compensation bill (wages,   salaries,   &    other    costs),   which   accounts  for   a significant proportion of domestic revenue, is a major  concern for Government. It is  one  of the  ‘Big-Three’  budget line items that   continue  to  narrow   Government’s  choices  in  pursuing higher economic growth  and development programmes.
193.  The SSNIT database will be used as a filter for the payment of public sector workers. Starting in April, all workers who have not  been  biometrically  registered with SSNIT  will be  taken  off Government payroll.

Recruitment and Promotion Related  Arrears

194.  Mr. Speaker,  in spite  of  the  Public  Services  Commission policy  on  recruitments  and  promotions,  we  continue  to  see delays  in the  processing  of  recruitments  and  in promotions. These delays create frustrations for new recruits and  serve as demotivation  for  serving  officers  due  for  promotion.  Further, these delays  lead  to unexpected accumulation  of arrears that hurt the integrity of our fiscal planning.

195. Mr. Speaker, in order  to control  the wage  bill, and avoid compensation  arrears that  have  not  been  provided  for  in our budgets, Government will from  2017  strictly enforce the  policy and  guidelines on the effective dates of promotions and recruitments within the Public Services. Substantive effective dates of recruitments  and  promotions  shall not  be  backdated without  the explicit permission of the Minister for Finance in writing.

Enforcement of the Public Procurement Act
196. Mr.  Speaker,  as part  of  our  expenditure  management framework,  Government will strictly  enforce the  provisions  of the  Public  Procurement Act,  2003  (Act  921)  as  amended by Public  Procurement (Amendment)  Act,  2016  (Act  914), especially  with  regard to  sole  sourcing,  which  has proven  to pose significant risks to fiscal policy management. To ensure that  public procurements are done  within budgetary constraint, we  intend  to  strengthen the  procurement  process  by introducing another level of approval for MDAs and MMDAs. To this end, sole sourced procurements by MDAs and  MMDAs beyond   the   threshold  of  GHȻ50  million  will  be  subject  to explicit approval by Cabinet  before submission to the Public Procurement Authority for consideration and approval.


197. Mr. Speaker, as a sign of Government’s commitment to ensuring public debt  sustainability within the  framework of the PFMA, the debt  management strategy in 2017 envisages the introduction   of   new   instruments   to   further    lengthen   the maturity  profile  of  public  debt, reduce cost/risk factors associated with the debt  portfolio  through effective liability management,   and   support  the   development   of  the   capital market.

Liability Management
198. Mr. Speaker, to  improve   the  structure of  public  debt, Government will continue to implement sound liability management initiatives aimed  at reducing interest cost and mitigating interest rate  risk associated with the current debt portfolio.  This will involve the implementation of a wide variety of  operations,  including  the  buy-back  of  existing  debt   using Sinking Fund Account, interest rate hedging and the use of structured financial  instruments, as market conditions permit.

Implementation of a Credit Risk Assessment Framework for


199. Mr. Speaker, the  current financial  state and  governance structures of the SOEs, particularly, in the Energy Sector, is worrying. This continues to pose challenges for fiscal policy outcomes. In  this  regard,  Government will implement  a credit risk   assessment   framework to   guide   SOE  borrowing   and continue to ensure that  necessary security structures and instruments are put in place  by the SOEs to ensure they honour their debt  obligations.

200.  In addition, Government intends to establish a Single Entity with oversight responsibility of the SOEs. This forms part of broader SOE reforms aimed  at  consolidating the  State’s ownership role, improve  performance and  ensure effective and
efficient  service delivery by SOEs.

201. Mr. Speaker, Government intends to pursue an inclusive development strategy aimed  at radically improving  the state of basic infrastructure at the constituency level, especially in rural and deprived  communities. The Infrastructure for Poverty Eradication  Programme  (IPEP)  will be  our  main   vehicle   for tackling  these challenges.  The  IPEP  is  designed  to  direct  our capital expenditure towards local, constituency-level specific infrastructure and economic development priorities, with particular emphasis on rural and deprived  communities.

202. Mr.   Speaker,   under    IPEP,   every   one    of   our   275 constituencies will be allocated the  equivalent of US$1 million (GH¢4.39   million)  annually.   It  is   expected  that   the   project selected, under  standardised guidelines, will fall in the following categories:
· One District One Factory;
· One Village One Dam;
· Small Business Development;
· Agricultural inputs, including equipment;
· “Water For All” Projects; and
· Sanitation Projects.

Establishment of Development Authorities

203.  Mr. Speaker,  in order  to  ensure that  IPEP  and  other  local initiatives are implemented in a well-coordinated manner, Government will set up three  (3) Development Authorities, namely, Northern  Development Authority (NDA), Middle Belt Development Authority (MBA), and Coastal Development Authority (CDA).

204. The Development Authorities will be the  main  economic development implementing agencies in the areas they cover.

205.  Mr. Speaker, Government will restructure and transform the Savannah Accelerated  Development  Authority  (SADA) into  a more   focused  Northern  Development  Authority  (NDA) as originally  envisaged. We will make  the  NDA a  flagship programme which  will serve as the  vehicle  for  delivering  our economic transformation agenda in the three  northern regions.

206.  Mr. Speaker, the  Middle Belt Development Authority (MBA) will serve as the  main  development agency for the  middle  belt of the  country.  The  Coastal  Development  Authority  (CDA) will
serve as  the   principal   development  agency  for  the   coastal regions of the country.

Zongo Development Fund

207. Mr. Speaker, as part  of  our  efforts to  develop Zongo communities,  government  will set up  a  Zongo  Development Fund  (ZDF) with  seed money  of  GHȻ219.5  million.  The  Fund will support the  provision of critical  infrastructure in education and   training;   health    and   sanitation;   local   businesses   and centres of  culture,  as well as improve  security  in the  Zongo communities. The ZDF is expected to leverage its seed fund to attract additional  funding  from  Development  Partners,  private sector institutions, civil society organizations, and  other  non- governmental organizations.


208.  Mr. Speaker, as part of our commitment to improve  access to education at all levels, Government will implement the comprehensive  free  public  Senior  High  School   (SHS) programme starting  with  the  2017/2018  academic  year.  This will include technical and vocational institutes.

209.  Mr. Speaker,  adequate provisions  have  been  made for the funding   of  this  monumental  social  intervention  programme
which  is  set to begin  in September,  2017,  from  the  ABFA and other  domestic revenue sources.


210.  Other  special  initiatives  that  will be  implemented  in 2017 are as follows:

Establishment of Airport Free Zone

211. Mr. Speaker, airports all over  the  world  are  becoming increasingly multimodal, multi-functional enterprises creating considerable  opportunities  for  commercial  developments  in areas  they   are   located.   Available   evidence   suggests  that airports tend  to attract investment and therefore generate jobs. Many countries are considering airport cities, or aerotropolis (airport-centred  urban  economic  regions)  as a  vital means of expanding opportunities and creating jobs.

212.  Mr. Speaker,  Government has identified  the  establishment of  sector-targeted  Free  Zones as  a  major   driver  for  capital inflows and jobs for Ghanaians starting, this year, with the preparatory  work   for  attracting   private   investment   into   an Airport Free Zone (AFZ). The AFZ will be purely a private  sector investment with government only facilitating the process. Government   will   explore    several    options    with    potential

213.  It is expected that  the  preparatory work for the  AFZ will be completed by the end of this fiscal year.

Financial  Stability Council

214. Mr. Speaker, exposure to  debts from  Bulk Distribution Companies, State-Owned energy  entities, as well as non- performing private  sector loans continues to exert enormous pressures on the  banking  sector, posing a systemic risk to the entire  economy. A significant number of banks have  capital adequacy ratios below the required 10 percent even after restructuring of the VRA and TOR debts.

215. To address this over the long term, the government will establish  a  Financial  Stability  Council  that  will be  mandated, among others, to  continuously assess the  vulnerabilities affecting  the   stability  of  the   financial   system   and   provide oversight over the steps taken  to avert these risks.

Optimizing Energy Assets

216.  Mr.  Speaker,   as  a   government,   we   are   committed   to achieving a least-cost power  generation infrastructure through accelerated private  sector participation. This will partly involve
the restructuring of the power  sector by bringing all hydro generation  exclusively  under  the  Volta  River Authority  (VRA) and creating a separate thermal market.

217.  A  new   entity   will  hold   the   thermal   assets  which   are currently  held by VRA and  make  available a significant portion of  this  entity  for  private   sector investment  in  pursuit  of  its private sector participation policy.

Ghana  Infrastructure Investment Fund (GIIF)

218.  Mr. Speaker, in 2007, the then  NPP government announced its  intention  to  set up  what  was to  be  the  Ghana  Investment Corporation (GIC) as its principal sovereign wealth  fund vehicle. In pursuing this, in April of 2008, the late Kwadwo Baah-Wiredu presented a memo to cabinet for approval to commence the processes of forming  the  GIC which was approved. A draft  bill was prepared but  could  not  be  passed before we exited government.

219.  Mr. Speaker, Government intends to review the  GIIF law to make  it consistent with the original objectives of the Ghana Investment Corporation (GIC). This has become imperative as we  seek to  take  a  more  aggressive  posture in leveraging  the assets side  of our  balance  sheet to  create wealth  to  support
the development of the country.

220.  Mr.  Speaker,  the   GIC     will  manage  the   National   Asset Protection Project (NAPP), a programme designed to conduct a physical and  financial  audit  to locate, identify and  value uncompleted Government assets.

International Financial  Services Centre

221.  Mr. Speaker, the Banking (Amendment) Act, 2007  (Act 738) was passed to make  way for the  establishment of the International  Financial   Services  Centre   (IFSC)  by  the Government.  The  purpose is  to  attract foreign   direct investment, income from  license fees payable in foreign currencies, create employment, enhance local skills and knowledge,  strengthen the  financial  sector through expansion in the  use of investment banking  instruments, and  to increase the general competitiveness of financial  sector.

222.  Mr. Speaker, Government will reactivate the process started by the  Ministry of Finance and  the  Bank of Ghana  as far back as 2007  to establish the International Financial  Services Centre (IFSC).

223.  Mr   Speaker,   the    Ghana    Compact   II    programme  has officially come into force.  Both parties to the Compact, the Governments of Ghana  and United States of America, are committed to complying with their obligations. However, the implementation of Ghana’s commitments has faced some challenges due to disagreements between stakeholders, particularly   between  labour,  ECG  and   the   Millennium Development  Authority  (MiDA). We need   further  dialogue  on the  key issues  that  have  generated these disagreements.  We are aware that  these discussions should be concluded urgently in order  to arrive at the  decisions that  will allow for its implementation.

224.  Mr. Speaker, Government will reactivate the dialogue on the key issues that  have  generated these disagreements to ensure that  all concerns are  adequately addressed and  that  the resolution will ensure the centrality of Ghanaian leadership.


225. Mr.   Speaker,   we   will   initiate    discussions   with   all stakeholders interested in the performance of their senior high schools in their communities; Parents, school alumni, religious organisations,  the  diaspora,  will be  encouraged to  establish  a funding  mechanism  to  support high  schools  of  their  choice. This  will reinforce  community  involvement  in governance and
improve  the quality of education in our senior high schools. It is time  we  all  participated  in  ensuring  that   Ghana’s  education regains its status of excellence.


226. Ghana  has since 1962,  been contemplating    the establishment of an integrated aluminum industry, using its natural resources in bauxite, hydro, gas and its existing smelter. The closest that  the  country  got  to realizing  this was in 2008, under  President  J A Kufuor. Thankfully,  President  Akufo-Addo has  made  the   rapid   and   sustainable   establishment   of  an integrated aluminium  industry a top  economic priority. This  is line with his  vision  for industrialization  and  transformation  of the   Ghanaian   economy,   with  a  deliberate   focus  on   value- addition  to  the  country's vast mineral  wealth   to  significantly expand the capacity of the economy to create jobs and  wealth for the people.

A lot of feasibility studies have been  done  in the area.  The 2017 budget seeks to revive this critical  game-changer and  has, accordingly,  made provisions  to see to the  implementation  of an integrated aluminium industry. The development of the industry will require  6 main components:
·First,  the   development  of  the   bauxite   mines  which   are

located in Awaso, Nyinahin and Kyebi.

· Second,  the   establishment  of  a  refinery   at   one   of  the bauxite sights, preferably in Kyebi, because of its closet

proximity to Tema, where  the Valco smelter is located.

· The allocation of a dedicated, reliable and affordable source of power supply for the smelter.

· The  development  of a rail way infrastructure  between the mines and Tema.

· The conversion of the  alumina to aluminium at the  current

Valco plant.

· The establishment of an industrial park dedicated  to manufacturing aluminium related products to complete the

value chain of what is potentially a multi-billion local industry.

The President intends to introduce a Bill to this House this year to oversee the urgent  development of this critical industry.


227.  Mr. Speaker,  as we  have  said  severally,  “corruption  holds back  economic  growth,  increases  the  cost of doing  business, reduces revenue to the state, leads to capital flight, and inflates
the cost of runnning  government. It also results in a loss of legitimacy and respect for legally constituted authority”.

228.  In this regard, Government will continue the implementation of  National   Anti-Corruption  Action   Plan.   Additionally, Government will pursue a combination of institutional and legislative reform  as part  of our anticorruption policy, including establishing   the   Office   of   the   Special   Prosecutor,   strictly applying  the  provisions  in the  PFM and  PPA Acts,  as well as amend,   in  particular,   sections   3,   151   and   239-257   of  the Criminal   Offences  Act,   1960    (Act   29),   which   will  make corruption a felony instead of a misdemenour.
229. Mr. Speaker, this government is commited to passing the Right  to   Information   Bill  as  part   of   our   tools   in  fighting corruption. We will not pay lip service to fighting corruption.


230.  Mr. Speaker, the  centrepiece of this budget is to create an environment that will stimulate the private sector to create jobs, especially for the  youth.  It seeks to create an  enabling environment to build the capacity of our youth to take  on more active  roles  in our  country’s  future  and  its  development.  This has been  reflected in the key policy initiatives announced in this budget, such as:
· Tax policy measures
· Financial  sector initiatives
· Entrepreneurship development
· One district one factory
· One village one dam
· Small Business Development
· Stimulus package for industries
· Planting for food and jobs
· Sanitation


231.  Mr. Speaker, Ghana  turns 60 in a few days and  there  have been  arguments whether it is worth  celebrating this milestone given the  sombre state of affairs. I believe  we must. This anniversary provides us, not  only the  opportunity to reflect  but also the challenge to chart  a new and enduring course.

232.  Ghana  is  seen as a bastion  of democracy and  stability  in Africa.   As   a   country,   we   have   deepened  our   democracy especially in the fourth republic.  We have had three  (3) peaceful and  successful transfers of power.  Our love for education and our national character of friendliness and  peace loving sets us apart.

233.  Our economic challenges, have  however, been  the  bane  of our  development  aspirations.  The  policy  actions  spelt  out  in this Budget  Statement seek to fix the economy and change the narrative to put  the  economy on the  right path  of phenomenal growth.  We believe that  this budget sows the seeds for growth, jobs,   and  the  economic transformation agenda outlined  in the vision of the President, Nana Addo Dankwa Akufo-Addo.

234.  Ours,  Mr. Speaker,  is  a  government of  destiny  which  will
unite our people; and together, including all the people in this Chamber, we will create a climate of social solidarity, a soceity where  the  preferential  option  for the  poor  is  at  the  core  of a private  sector led growth  to transform our society and  achieve social justice, inclusive growth  and  restore human dignity and prosperity for all citizens. Poverty, Honourable members is not natural.  Our challenge  as we  sit  in these hallowed  halls  is  to liberate  ourselves  from  a rigged  and  unjust  economic,  politial and social system that we have helped to impose on our nation. The democratic dividends of prosperity and equity are thus currently eluding us.

235.  Mr  Speaker,   this   government  will  take   deliberate   and strategic  steps to  fundamentally  change the  structure of this economy  bequeathed   to   us  60   years   ago    and    we   are committed to implementing the measures I have outlined.
·We will restore and sustain macro stability.
·We will provide  the  environment for private  sector to grow and thrive,
·we will improve  public services and tackle  corruption.
·We  will support  small  businesses  in  rural  and   deprived areas
·We will ensure that  every  Ghanaian  has equal  opportunity and right to lead a productive and dignified life, being able to
fully develop their God-given capabilites.

236.  Our rural communities will begin  to see a more  purposeful and sustained effort at transforming their lives through the introduction of various district level industrial and agricultural initiatives  as well as improved  education  and  health  facilities and  services. Mr. Speaker, I  see our  nation  with  this overwhelming election mandate as all having  decided    to withdraw  in unison like Jesus to a remote place, Mr. Speaker, only  to  discover  that  we  have  five  loaves  of  bread and  two fishes to feed  our 25 million plus fellow citizens. But herein  lies the   genius   of  the   Ghanaian   ”for   we   are   God’s   handiwork created in Christ Jesus to do good  works which God prepared in advance for us to do.”

As  you  can     see,  Mr.  Speaker,  with  5  loaves  and  2  fishes, President  Akufo-Addo’s  budget has tackled  the  five structural pillars  of  revenue,  expenditure,  earmarked funds,  labour  and our  debt.   Budgetary  allocations  have   been   made  from   tax revenue, ABFA and  the  realignment of statutory funds to fund these  priority  programmes.  The  breakdown  of  the   funding sources are,  ABFA GH¢342.0  million,  tax  revenue GH¢785.0 million,  and  realignment  of  statutory  funds GH¢1.08  billion. This has been  done  through prioritization of expenditures and planned improvement and efficiency  in government spending.

Mr. Speaker, in addition to funding  these significant number of programmes with  lesser  resources than  was spent last  year, we have  allocated over GHs 700million  for capital expenditure seven times  more  than  was allocated  last  year,  funded NHIS and  free  SHS, provided  tax  relief for the  private  sector and  all other  socio economic classes, reduced levies on petroeum products,  reduced   electricity  prices,  provided  a  stimulus  for the private  sector and agricutlure and brought down the deficit from 8.7 percent to 6.5 percent. But that  is not all Mr. Speaker, for  a  heritage  of  12  baskets full  of  fish  and   loaves  is  yet available to further  sow for growth  and jobs.

237. Our aim is to restore hope  and steer the country  onto  a sustainable and inclusive growth  path.
A country  that  is reenergized to redefine and  reorient itself to confront the challenges ahead;
·A country  in charge of its own destiny;
·A country   where   the  private   sector is  well  equipped  to invest in the economy and be the catalyst for growth;
·A country   where  our  youth  have  access to  the  requisite education which will expand their horizon  and  give them  the

opportunity to dream and express their creativity, talents and abilities and
· A country  where  each and  every  citizen  is  proud  to  be  a
Ghanaian and to call this country  home.

238.  Mr. Speaker, let me take this moment as we near the end of this  great   priviledge  to  present President  Akufo-Addo’s  first budget to this august house, to reflect  on one iof the finest moments in the history of our democracy on July 23rd  1981.  As you  all  know,  during  the  third  republic,  the  country   was in econoic crisis under  the government of the PNP. I am proud  to say that  my father, Dr. Jones Ofori-Atta, in opposition with an amendment  motion,  co-sponsored  by  Dr.  GK  Agama successfully got this august house to support an amended motion  to save the  country.  Honourable Members, we do have a crisis which  we can  handle and  I will call on you, Honorable Minority Leader  Haruna  Iddrisu, the  Honourable Minority Whip Alban  Bagbin,  honourable  ranking  members   Ato Forson and Fiifi Kwetey  of the  Finance  Committee  to  join us in the  great example of the 3rd  Republic to salvage and build our economy.

239.  We believe with the help of the Almighty God we can deliver on all the well thought out programmes and  policies, and  build a  business  friendly  and   prosperous  economy. Mr.  Speaker, “God  did  not  give  us a  Spirit  of  timidity  but  of  power,  love, sound judgment and self discipline”

MR. Speaker, we can do it, I personally pledge to work with you,
with  candour,  with  transparency,  respect and  a  deep commitment  to  protect  this  public   purse.  Let  us  go  forth together.
240.  God  Indeed  bless  our  homeland  Ghana   and   make   our nation  great  and strong.

241.  Mr. Speaker, I beg to move.

Source: GhanaPa.com

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