The Minister of Finance has requested for a supplementary budget of GHC1.8 billion for development programme for the rest of 2016.
Mr Seth Terkper made the demand when he appeared before Parliament to present a supplementary budget on Monday, July 25, 2016.
The minister said the demand has become necessary due to plunge in commodities prices, shut down of the FPSO Kwame Nkrumah and drop in crude oil prices on the international market.
Oil and Gas
Terkper said crude oil prices is now estimated to average a broad range of $40-$50/bbl.
He pointed out that the government had adopted an average crude price of $45.35/bbl.
Also, he said total petroleum receipts is now expected to be GH¢1.4bn as against GH¢2bn in the 2016 budget.
The Finance Minister downplayed claims the IMF programme is in limbo. According to him, the third review meeting with the IMF was held in May 2016.
He added that most of December 2015 targets were met despite reports that the IMF was unhappy about Ghana’s posture to the programme.
Nonetheless, Terkper was hopeful the third tranche of the IMF programme would be approved in August 2016.
Ghana is battling with an excruciating power supply that is affecting businesses and making citizens uncomfortable.
Despite the challenges, Terkper said the power sector has benefited from significant investment.
He noted that the country’s installed capacity is enough to meet current demand.
He also disclosed that access to electricity in Ghana is over 82%.
He blamed the current power challenges on the lack of supply gas from West Africa Gas Pipeline though it emerged on Monday that the supply cut was due to unpaid bills by the government.
Terkper highlighted the decline of public debt from 72% at the end of 2015 to 63% at the end of May 2016.
He noted that this is the first time post-HIPC that Ghana has slowed down the rate of growth of debt.
He said the government would continue to use smart borrowing measures to ensure sustainable growth within the medium term.
According to him, GH¢986m of domestic debt was paid off with Eurobond proceeds.
Terkper told MPs the economy grew by grew by 3.9 percent at end-2015 and by 4.9 percent for Quarter 1 of 2016—better than the 3.5 percent projection for 2015 and 4.1 percent in Quarter 1 of 2015.
He added that for Quarter 1 of 2016, Industry declined by 1.1 percent, against a growth rate of 7.2 percent in the same period in 2015.
“This is mainly due to the challenges relating to the supply of gas and crude oil from FPSO and the West Africa gas pipeline,” he said
He said agriculture grew by 2.8 percent while the services sector grew by 8.8 percent. These show improvements over the 1.7 and 5.2 percent, respectively, for the same period in 2015.
Concluding his statement on the floor of the House, Terkper assured the nation that government will resist budget overruns, often associated with elections, and manage the public debt towards ensuring debt sustainability.
“We are determined to sustain fiscal discipline while investing prudently in infrastructure and social development,” he added.