The Finance Minister, Mr. Seth Terkper today went to Parliament to request for Supplementary Estimates of GH¢865,789,380.00 in accordance with Article 179 (8) of the 1992 Constitution and Standing Order 143 of this House.
In his speech to Parliament, he said it is obvious that, despite the net adverse impact of the fall in crude oil prices (and earlier gold and cocoa prices as well as major disruption in gas supply), the positive trend in performance of the economy is beginning to show.
“I am glad to note that our decision to enter into the IMF programme for Balance of Payments support to build on the progress in the implementation of government’s Home Grown Policies is beginning to yield dividends. Nonetheless, we will not be complacent at this stage,” he said.
He said so far Ghana has received an amount of $114.75 million immediately after the IMF Board’s approval.
“This was the first tranche of the total amount of $918 million expected to be disbursed in eight equal instalments over the three-year period as balance of payments support.
The remaining seven disbursements will be made after the observance of the performance criteria and completion of reviews under the Programme. Following the anticipated approval by its Board, we expect the release of the second tranche by the IMF soon,” Terkper said.
According to Terkper, given that these disbursements are performance-based, it is refreshing to note that at the conclusion of the first review of the Programme in June, the IMF Mission was satisfied that the Programme is on track.
“All the performance criteria were met except for the ceiling on central bank financing to the government, which was technically missed by a small margin.
The Government is keenly observing this particular programme benchmark given its implications for the overall financing levels that have been recorded this year,” he said.
He indicated to Parliament that the government was presenting this Mid-Year Review and Supplementary Estimates “to continue pursuing our transformation agenda; maintain the recent gains in our growth and macroeconomic stability agenda; and entrench our lower middle income status.”
He said the short-term and more structural elements are designed to manage issues such as higher foreign-financed capital expenditure due to the exchange rate effects; rising inflation; impact of gold and cocoa prices; revisions in the benchmark crude oil prices used in the PRMA; additional spending related to the recent flooding; and refinancing of existing debt stock.
The Finance Minister however, reminded Ministries, Departments and Agencies (MDAs) and Metropolitan, Municipal and District Assemblies (MMDAs) that this Revision and Supplementary Estimates will not result in automatic increases in the expenditure across board.
Further, they do not accommodate significant new expenditures that must be justified in budget context, he said.
“Our prudent expenditure drive continues with additional expenditure allowed only when revenues increase. On the other hand, we are confident that as the economy rebounds, the expenditure envelope will increase in tandem with revenue. In the interim, focus will be on pipeline projects and MDA/MMDAs are not to incur unauthorized expenditures beyond their budgets and budget allotments,” he advised.
By Emmanuel K. Dogbevi