TUESDAY 25 FEBRUARY 2014
Right Honourable Speaker,
Your Excellency, the Vice President,
Your Ladyship, the Chief Justice,
Honourable Members of Parliament,
Since the start of the Fourth Republic, every President, in fulfillment of Article 67 of the Constitution of the Republic of Ghana, has stood before this august house each year to address the state of our nation. It is my privilege, as President, to also stand before you today to present a message on the state of the nation.
I am pleased to be addressing the full house today, and I wish to thank all my parliamentary colleagues for the cooperation you have continually extended to me since I was sworn in as President. As a former Member of Parliament for twelve (12) years, I am always filled with a sense of nostalgia anytime I step onto the grounds of Parliament.
Mr. Speaker, we find ourselves at a unique place in history. Our beloved Ghana is a nation in transition. We are on the cusp of many exciting new opportunities. We are on the verge of fulfilling the promises our forefathers and foremothers made to us, and to the world, about the destiny of our country and the determination of our people.
We are in the midst of change. And change can often feel uncomfortable, especially as it pulls us away from the systems and practices with which we have become familiar, but are no longer serving our needs efficiently. Without change, Mr. Speaker, Ghana cannot grow. Change is what will propel us forward, as a nation, to all that lies ahead.
And these new opportunities will enable us to transform ourselves from a lower middle-income, import-dependent, developing country to a proud and robust, self-sufficient middle-income nation.
Mr. Speaker, we have been here before, as a nation. We have been in transition, pushing our way past doubt, and past darkness, to find the dawn of a new day. Ghana was created through change, a movement of the people in support of their collective vision.
And then Ghana went on to influence change on the African continent and in effect, the course of the world.
Mr. Speaker, last year in my first State of the Nation Address, I defined the four basic pillars around which my approach to governance and socio-economic transformation would revolve. They are: Putting People First; Building a Strong and Resilient Economy; Expanding Infrastructure for Growth; and, Maintaining Transparent and Accountable Governance.
Today, as I talk about where we are as a nation, I also want to talk about who we are as a nation. I want to talk about the richness and diversity of our talent and innovation. I want to talk about the strength of our determination as a people. It is a determination that has always guided us toward victory in all of our endeavours.
We are a nation of 24 million. That’s people not products. 24 million human lives, each one deserving access to the basic necessities of life; each one possessing unique ideas and skill sets to make Ghana better; each one holding more value to this country in its existence and potential than any other natural resource we have.
Mr. Speaker, this is why my government’s first priority is, and will continue to be, our people. At the core of every decision we make and every policy we implement is the understanding that it will have a direct and positive impact in the day-to-day lives of average Ghanaian citizens.
PILLAR I: PUTTING PEOPLE FIRST
a. Gender, Children and Social Protection
At the recent World Economic Forum in Davos, (Switzerland), a prominent item on the agenda was the topic of “inequality.” Various development and social justice organizations cited it as one of this decade’s top global risks. Inequality among nations, as well as inequality within nations, has become a major flashpoint for social tension.
Mr. Speaker, wealth disparity is of great concern to my government. It is a threat to our stability as a nation and to our unity as a people. We are aiming to bridge the gap between the richest and poorest of our people. In the next two months, here in Accra, we will host a major international conference focusing on the theme of growing inequality in the world.
We are proud to be hosting this conference, and we are eager to share our experiences with the rest of the world, and also gain insight from the other conference participants and the international community-at-large.
Mr. Speaker, the Ministry of Gender, Children and Social Protection is a major instrument in our effort to create an all-inclusive society in which the weak and disadvantaged also have a stake in our nation’s progress. The Ministry’s primary mandate is to promote the welfare and protection of children, and to empower the vulnerable, the excluded, the aged, and persons living with disability, and to ensure true gender equality.
A lot of this Ministry’s work involves advocacy and, in this regard, the Ministry has actively been involved in the drafting of the Affirmative Action Bill and the Intestate Succession and Property Rights of Spouses Bills. The Ministry also initiated the process for the validation of the Domestic Workers Regulation. These are pieces of legislations that are key to protecting the rights of our women and other vulnerable groups in our society.
The Ministry’s flagship programme, however, is the Livelihood Empowerment Against Poverty, otherwise known as LEAP. Mr. Speaker, through this programme, the Ministry has made cash grants to 74,000 of the poorest households in our country. This means that now, the poorest 74,000 families in Ghana will be able to afford food, clothing and the cost of basic transportation. Now, these families will have access to healthcare and education; now, these families can even invest in some small income-generating activity.
This year, the Ministry, with the support of Government, plans to increase the beneficiary families of LEAP to 100,000. In 2015 that number will increase to 150,000. Currently the Ministry is implementing an electronic platform to deliver the grants to the beneficiaries using mobile phones. Mobile devices are being distributed to the beneficiary families to enable them receive their transfers. With those mobile devices many households would also, for the first time, be able to connect to the national communication network.
The LEAP programme is not intended to be a source of long-term support to the same set of families. The purpose of these cash grants is to empower the poor and the vulnerable. It is to create opportunities in order to give them a way out of poverty. The programme ensures that the most impoverished among us can live in dignity. It offers them hope in their future possibilities, and a chance to participate in the collective future of our nation.
Mr. Speaker, this Ministry is especially vigilant when it comes to the rights and protection of our children. The Ministry, together with the Domestic Violence and Victims Support Unit [DOVVSU] has led an awareness campaign against child marriage. As a result of this campaign, they have successfully extricated numerous children forced into marriage and returned them to their families and studies.
The Ministry has also provided the equipment and taken tool kits to twenty-five (25) institutions across the nation to facilitate the technical and vocational training of young people.
Finally, the Ministry for Gender, Children and Social Protection, convened a team of doctors to perform the necessary surgeries on women with obstetric fistula in the Upper East, Upper West, Volta and Central regions. In addition to offering these women relief from the pain and discomfort of this childbirth injury, these procedures have restored their dignity and sense of self-worth.
Mr. Speaker, through our social intervention programmes we must create safety nets that protect the poor and vulnerable. We must share the fruits of our growth equitably in order that we leave no one behind. This is the way we can guarantee that all our citizens are committed and have a stake in the survival and advancement of our nation.
Mr. Speaker, it is this government’s vision to extend quality health care to all our people irrespective of one’s status in society or geographical location. This involves the construction of new facilities and the training of health personnel.
Healthy people make a healthy nation. All around the world it is recognised that the costs and consequences of illness far outweigh the cost of making quality healthcare accessible and affordable to all.
Mr. Speaker, to this end, Government is pursuing the vision of bringing healthcare to the doorsteps of our people, in even the remotest of locations. We have been engaged in an aggressive rollout of Community Health Improvement Compounds [CHPS]. The compounds are staffed with trained nurses, midwives, and other auxiliary health personnel. They are located in rural and peri-urban communities, and they provide basic healthcare services including antenatal care to pregnant women.
These compounds have greatly increased access to healthcare, especially in deprived communities. They have cut down the distance our citizens have to travel to access healthcare. The CHPS compounds are also playing a prominent role in Ghana’s steadily decreasing maternal mortality numbers. By 2016, we aim to construct an additional 1600 new CHPS compounds across the country.
To support this wonderful campaign, my colleagues and I in the Executive branch of Government have taken a voluntary ten percent (10%) cut in salaries. These contributions will be used to construct more CHPS Compounds so that we can save the lives of more women during childbirth.
Mr. Speaker, our policy is to provide every district with a modern health facility. The newly constructed Tarkwa Hospital has been equipped and is now open for use. This has improved the quality of health for people in that catchment area. Work is ongoing on twelve (12) new district hospitals, including Dodowa, Sekondi, Fomena and Garu-Tempane, while financing for an extra nine (9) are being concluded.
Mr. Speaker, work is ongoing on a new teaching hospital for the University of Ghana. When completed, this new hospital will make quality tertiary healthcare readily available. It will also ease the pressure on the Korle-Bu Teaching Hospital. Work is ongoing to upgrade the Ridge Hospital into a full-fledged regional hospital to serve the Greater Accra Region.
Work on the Upper West Regional Hospital in Wa is progressing steadily. Just a few weeks ago I cut the sod for the start of Phase II of the upgrading and expansion of the Tamale Teaching Hospital. This upgrading has made the Tamale Teaching Hospital a critical provider of tertiary care in the northern sector.
This development also means that it is now possible for medical students from the University for Development Studies to perform their clinicals at the Tamale Teaching Hospital, instead of moving to the Kwame Nkrumah University of Science and Technology in Kumasi to complete their studies.
Mr. Speaker in this age of modern medicine, in order to best serve patients, our healthcare facilities must maintain equipment that is state of the art and in good working order. Under the National Medical Equipment Replacement Programme, modern equipment has been supplied to forty (40) district hospitals.
Other beneficiary hospitals are the Ridge, Tema General, 37 Military, the Princess Marie Louise Children’s Hospital, as well as Maamobi General Hospital. There were three teaching hospitals that also benefitted- Tamale, Komfo Anokye, and Korle Bu.
Mr. Speaker, Korle-Bu, Ghana’s premier teaching hospital, benefitted from equipment supplies and rehabilitation worth 276 million Ghana Cedis. This expenditure covered the paediatrics theatre, which had been closed for more than 8 years. Children are now able to have their surgeries in a beautifully renovated theatre with first class equipment. Additional facilities covered by the expenditure were the neonatal, intensive care and baby units; the mammography centre, as well as the laundry and kitchen.
We are currently engaged in the expansion of health training facilities. More Nursing and Midwifery Training and Medical Assistants Training institutions are being opened. This means that more skilled personnel are being graduated to serve in the health sector. So far, more than 3,000 medical personnel have been trained. These include, medical assistants, midwives, public and community health nurses.
The net result of this additional access to and availability of health personnel is reflected in the increasing life expectancy ratio in Ghana, which currently stands at about 65 years - among the highest in Sub-Saharan Africa. Another positive result of this is, the drop in institutional neonatal mortality from 5.8 per 1000 live births in 2012 to 2.3 per 1000 today. The average neonatal maternal mortality is also decreasing steadily. These are not just numbers; they represent human lives. These improvements mean that more babies are surviving childbirth and more mothers’ lives are being saved.
Mr. Speaker, when it comes to saving lives, Ghana has been hugely successful in its efforts in the area of HIV and AIDS. Our prevalence rate for HIV and AIDS continues to decline and currently stands at 1.37%. The Ghana AIDS Commission continues to work towards implementation of our 5-year strategic plan. The plan envisions a 50% reduction in new infections by 2015, virtual elimination of mother-to-child transmission and the placement of more infected persons on antiretroviral therapies. We will mobilise funding for a massive scaling up of our antiretroviral therapy programmes.
At the invitation of UNAIDS I attended the Lancet Commission Conference of HIV and AIDS in London (recently). At the conference, I championed the cause of building local capacity in the African Pharmaceutical industry for the production of antiretroviral therapies.
Mr. Speaker, I am happy to announce that we are on track to exceed the target of a 50% reduction in new infections by 2015. We are also leading the way in Sub-Saharan Africa with over 76% reduction in new HIV infections among children.
Despite those successes, Mr. Speaker, there are key populations in which HIV infections remain much higher than the national average. Among sex workers the infection rate is 11.3%. It has dropped significantly from 25% in 2009, but it still remains well above our target, as does the infection rate among men who have sex with men, which currently stands at 17.5%.
Mr. Speaker, education has proven to be the most effective tool in the battle against the spread of HIV/AIDS. The awareness that is gained through education is what prompts people to alter or stop engaging in behaviour and practices that place them at greater risk of infection. We will continue our public awareness campaigns, specifically ones targeting those populations at greatest risk.
When it comes to education, Mr. Speaker, government’s top areas of focus are quality, access, and affordability. There was a time when our public school system was on track and on par with the private schools here in Ghana, and anywhere else in the world. Where education is concerned, we have a history of being quite visionary.
When the Prince of Wales College, which later became Achimota, was established in 1924 as a co-educational facility, gender equality in education was far from the norm. In fact, most women the world over did not even have the right to vote or own property. But in Ghana, girls and young women were being educated alongside their male counterparts. And, rightfully, with that education came the expectation of comparable careers.
When the commission on higher education in the British colonies recommended that a single university be established in British West Africa and chose Ibadan, Nigeria as the location of that university, we Ghanaians challenged their decision. We understood the value of education. We knew what the presence of an institution of higher learning would mean to our people, especially to the future generations.
In the end our protest was successful and that university which was established in 1948 as an affiliate of the University of London is now none other than our esteemed University of Ghana.
Mr. Speaker, we must make education a priority again. The students of this nation deserve to have the confidence that comes from knowing that the education they are receiving will adequately prepare them to navigate this competitive global workplace. If our students are left behind, then we as a nation will also be left behind.
To this end, Government has been working to improve the quality of education, especially at the basic level. The main problems affecting this level are a lack of teachers, a lack of teaching and learning materials, and poor school infrastructure especially, in the rural areas; and, also, community apathy in the management of schools.
We are actively engaged in the process of building new school blocks to replace schools in sub-standard structures. In 1,900 communities, mostly rural, this has improved the environment in which children learn and enabled classes to be held all year round.
In urban schools, these additional facilities have enabled Government to progressively eliminate the shift system that had children attending school in turns. Science resource centres have also been rehabilitated across the country to facilitate the learning of science and mathematics.
Mr. Speaker, the availability of teachers has been a major challenge. Because of constraints of paying teacher trainee allowances, Government previously imposed quotas on admissions into colleges of education. Annual admission to these colleges was therefore restricted.
With the recent decision to transfer teacher trainees onto the Students Loan Trust, it has made it possible to increase the number of trainees in the colleges of education from the previous 9000 to 15000. This would improve the supply of teachers and open up the opportunity to many young people who want to take up teaching as a profession.
Unfortunately, it has become apparent that the training of these professionals does not always translate into an availability of teachers in certain areas. Mr. Speaker, I am concerned, and we all must be concerned, about the findings from a national staff rationalization exercise just completed by the Ministry of Education. It is clear that we need to do better with the deployment of our teachers.
The current situation is that in many regions there is an excess of teachers in urban and peri-urban areas, but in the rural and other deprived communities, teachers are often in short supply. We cannot accept this educational divide between our urban and rural communities.
So, Mr. Speaker, I am calling for nationwide support for the Education Ministry and the Ghana Education Service as they take the necessary actions to implement a programme aimed at an immediate and comprehensive redeployment and redistribution of teachers.
It is very important that all Metropolitan, Municipal and District Chief Executives, as well as MPs and community leaders take an active part in these efforts to address issues of education at the district and community levels. Together, we can and we must improve school management, performance and accountability across our nation.
Mr. Speaker, the lack of instructional and learning materials is also being addressed through the supply of textbooks and exercise books to children in public schools across the country. Through this programme, more than 12 million books have been distributed to basic schoolchildren in the country, thus equipping them with the core tools they require for their education.
While Ghana has been successful in achieving the Millennium Development Goals (MDGs) on universal primary education, there still remain pockets where school enrolment is low. To address this, Government introduced the Complementary Basic Education programme. This programme has facilitated teaching and learning for 25,000 out-of-school children.
Classes under this programme are ongoing in the Upper East, Upper West. Northern and Brong Ahafo Regions. Now, there are 25,000 children whose choices will not be limited by illiteracy; 25,000 children who can go on to become productive contributors to this society in ways they might never before have even imagined.
Mr. Speaker, at the secondary level, access continues to be a major problem. Existing secondary schools have a capacity to absorb only 60% of the students who qualify from Junior High School. Because of the high demand for secondary education, existing schools have been compelled to admit much higher than they were designed to accommodate. This has led to circumstances in which there are some schools with as many as 3000 students. This is significantly higher than the prescribed average of 1500.
Government’s programme to construct 200 new community day secondary schools is on track. Architectural drawings, designs and quantities have been completed, sites for the schools have been selected, and the procurement process for the first batch of schools is currently ongoing.
The start of construction works for these schools was held back in 2013 because of the detailed activities that went into the preparatory process. We have made good progress on this project and I invite all of you honourable members of this august house to join me to break ground for the commencement of construction of the first 50 schools next month, precisely on the 3rd of March.
Mr. Speaker, the most expensive segment of our education system is the second cycle. We promised to rationalize fees in the secondary schools in order to reduce the burden on parents. The Ministry of Education, after extensive stakeholder consultations, advertised a uniform list of approved fees for second cycle schools. Parents are being advised to report any head of school that charges fees outside of those on the schedule published by the Ministry.
Further to this, the Ministry, following consultations with stakeholders, has prepared a report on the road map for a progressive introduction of free secondary education in Ghana as required under the 1992 Constitution. This road map would be presented to Cabinet for approval and subsequent implementation. Under the guidance of this proposed road map, we can anticipate that fees for day students will be abolished at an estimated cost of GHC71 million in the 2015/2016 academic year. Other reliefs in respect of boarding student would be announced when the road map is published.
Mr. Speaker, access to tertiary education continues to expand with the increase in admission into public universities and the participation of accredited private institutions in providing. While this has provided opportunity for many to gain a university education, we must be mindful both of the quality of education provided and also the disciplines offered in our institutions of higher learning. Some universities may appear interested in only expanding enrolment to attract greater revenue and therefore waive the strict entry qualifications required for study in university.
Additionally many universities and tertiary institutions go for the softer course options and churn out graduates in business and the humanities at the expense of science, technology and allied courses which are increasingly in demand in an economy in transition from lower middle income to middle income status.
This is partly responsible for the increasing graduate unemployment level with which we are currently plagued. I have asked the Ministers of Education and Employment and Labour Relations to sponsor a joint survey of the professional and skills sets in demand in the Ghanaian labour market. Such a survey will provide students guidance in selecting courses in areas where their opportunities for employment are brighter and also provide our universities with information to adjust curricula and admissions to align with the demands of the job market.
Mr. Speaker, I am happy to report to this august house today that, as stated in our 2012 NDC manifesto and indicated in my 2013 State of the Nation Address, the establishment of the first public university in the Eastern Region is becoming a reality.
The Professor Benning-Amoako-Nuamah Committee has completed work on the nature, specialization, proposed academic mandate and specific location for this university. A draft bill for the establishment of this new university in the Eastern Region is also ready and will soon be presented to the House for consideration.
Mr. Speaker, it also pleases me to report that progress is being made with the two latest public universities that were set up in the last term of the NDC Government. The University of Health and Allied Sciences in the Volta Region has increased its intake from 155 students at its inception three years ago to 535.
Additionally, the University of Energy and Natural Resources in the Brong Ahafo Region has also grown from 150 founding students to 716 current students.
Plans are also afoot for the establishment of their satellite campuses in Hohoe Dorma Ahenkro, and Nsoatre. Honourable members will also observe in the Ghana Education Trust Fund (GETFund) Formula, to be presented to the house soon, that we have proposed to scale-up financial support to these new universities.
Mr. Speaker, before the end of this year, I will announce the formal process to convert ten of our polytechnics into Technical Universities. The Technical Committee set up by the Ministry of Education has completed its work and various stakeholder consultations are currently taking place, leading to the final conversion.
I must commend the technical committee for their impressive output and, Mr. Speaker, I welcome the excitement this policy intervention has generated in the technical and vocational education fraternity.
Ghanaians can remain assured that government will continue in our efforts to rebrand technical and vocational education and give it the important attention and support it deserves in the development of our nation. This move is particularly important at this critical moment of our development when we are embarking on the transformation of the structure of our economic fundamentals.
Mr. Speaker, despite resistance by some persons who are even guaranteed to benefit, just like all Ghanaians, we have taken a major and innovative decision to operationalize a National Research Fund.
The importance of a research fund cannot be lost on any one of us. Nations and companies have become great through research and innovation. How can we adapt and develop effective local solutions without investment in research and innovation?
Mr. Speaker, our lecturers, researchers and students deserve this special support, so that they can increase their capacity to carry out important scientific inquiries. It is fitting that this objective is being led by one of our esteemed academics, Professor Daniel Mireku-Gyimah, former Vice Chancellor of the University of Mines and Technology in Tarkwa.
Government expects the Committee to make recommendations on the modalities for accessing the Fund, its independence and its sustainability. Higher institutions of learning and all Ghanaians especially the private sector must support the establishment of this Fund, which has enormous potential to transform the fortunes of our nation.
I wish to call for the support of the legislature in the implementation of these decisions and policies, because, Mr. Speaker, our nation will have greater prosperity, with benefits for all, as a result.
As a country, Mr. Speaker, we can only be happy with the many academic opportunities being created for the youth of our country.
d. Youth and Sports
Mr. Speaker, as government responds to the issues that confront the youth in our population, we are also mindful of the need to ensure that our young people are part of the process of finding the needed solutions.
Following on the national policy document launched in 2010, we have finalized work on an Action and Implementation Plan for the National Youth Policy. The Implementation Plan represents what is a major paradigm shift in our approach to youth development in this country. While the plan represents our commitment to addressing the challenges facing our young people, it is first and foremost the work of the youth themselves.
Mr. Speaker, after several rounds of discussions with our young people and the entrepreneurs among them, we have also finalized work on what was proposed as a Youth Jobs and Enterprise Development Fund, now to be known as the Youth Enterprise Support (YES).
The ten million Ghana cedi (GH¢10million) Youth Enterprise Support (YES) initiative to provide opportunities for innovation and the creation of decent jobs by the youth of Ghana through mentorship and support.
While YES is not a full answer to our job creation issues, it does reflect my commitment to the future of the Ghanaian youth. I encourage our young people to begin the process of organizing and formalizing their business ideas to access the facilities available under the YES.
Mr. Speaker, construction of the superstructure of the Cape Coast Sports stadium commenced in June 2013. The preparatory work, which involves ground-levelling, extension of utilities to the site, construction of drainage facilities and the layout of the road, has been completed. It is expected that work will progress steadily and be completed on schedule.
Mr. Speaker, for the third consecutive time, our Senior National Football Team, the Ghana Black Stars, has qualified for the prestigious 2014 FIFA World Cup Tournament, to be held in Brazil this June. Our national Under-17 female soccer team has also qualified to participate in the next FIFA Under-17 Women’s World Cup Tournament scheduled to take place in Costa Rica next month.
Still on Sports, our local Black Stars won last year’s WAFU Zone B Tournament, which was hosted here in Ghana. This tournament prepared our players for the 2014 CHAN Tournament, which was recently concluded in South Africa. We won the silver in that tournament.
Mr. Speaker, our sports teams consistently make Ghana stand out as being and giving the very best that Africa has to offer. As part of our commitment to ensure the further development of Sports, the National Sports College in Winneba has been pursuing successful private collaborations for infrastructural development through the Public-Private Partnership arrangement.
Government last year reviewed drawings of the Sports Arenas and Sports Senior High School to be established in the District and Regional capitals, and actual construction work on a selected few is expected to begin as soon as all the procurement formalities are completed.
PILLAR II: BUILDING A STRONG AND RESILIENT ECONOMY
a. Economic Performance
Mr. Speaker, despite the short-term challenges we face, our economic fundamentals remain sound and our mid-term prospects are good. Growth continues to be robust at an estimated 7.4% last year and we still retain our vision to accelerate and maintain GDP growth at above 8% going forward.
The non-oil sector of our economy grew by 5.81 percent over the same period. The agriculture sector in particular, which faced a few challenges the previous year, due principally to some difficulties in the cocoa sector, still posted a significant growth of 3.41 percent.
That we are transiting into a services economy is apparent from the strong growth that continues to be posted by the services sector. The sector in 2010 overtook agriculture as the largest contributor to GDP and last year it posted an impressive growth of 9.1%. The Industry sector, which has witnessed sluggish growth over the last couple of years, last year posted a remarkable increase of 9.2%.
Mr. Speaker , since 2007 the world has been faced with a financial crisis and Ghana has not remained immune to the pressures created by this crisis. Recent tapering policy announced by the US Federal Reserve greatly impacted numerous emerging markets. Ghana is one of those affected. Compounding this is the fact that several domestic factors have further aggravated the challenges with our macro economy:
A larger-than-expected expansion in the wages and compensation bill during the implementation of the singe spine created a wage spiral that we are working with organized labour to contain. Huge and unsustainable subsidies on petroleum products and utilities also threw the budget out of sync.
The net effect was an increase in our budget deficit to nearly 12%, an increase in inflation above 13%, an increase in interest rates, and also an increase in our domestic debt.
Ghana is in the capital markets to stay. And we take note of the concerns that analysts have expressed about these developments, notably the compensation bill — including acknowledgement of the painful measures that our people are having to endure towards our consolidation effort. The visiting IMF Article IV mission (who I believe are here in Chamber with us) has also expressed similar concerns in the course of our interactions with them.
Mr. Speaker , it is for these reasons that we have had to take difficult measures to arrest this trend and restore the macro economy to good health. While these measures have been unpleasant and difficult to take, ultimately they are necessary to create a good economic environment in which businesses can continue to, not merely survive but also grow.
Mr. Speaker , we have had to take difficult measures to arrest this trend and restore the macro economy to good health. While these measures have been unpleasant and difficult to take, ultimately they are necessary to create a good economic environment in which businesses can continue to not merely survive but also grow.
It is an experience with which, I am sure, we can empathise in our daily lives. We have all, at some point, had to bear the taste of a bitter medicine in order to restore our bodies to good health.
Mr. Speaker , I wish to assure this august house, and the good citizens of Ghana that as with the taste of any bitter medicine, this turbulence we are all being made to bear is temporary. We shall begin to see the benefits of the sacrifices we are making very soon.
Mr. Speaker , as a lower middle-income country in transition to middle income status, we have an enormous need for credit to develop our social and economic infrastructure. Our debt to GDP ratio is currently estimated at 52%. While this is not abnormally high, our domestic debt and the current high interest rates are a major challenge to the economy. The Hon Minister for Finance is currently implementing measures to refinance a portion of the domestic debt, thereby reducing the pressures these obligations are placing on the budget.
We have also commenced work on the Ghana Infrastructure Investment Fund. This fund will enable us to disaggregate our debt profile and transfer infrastructure investments with a revenue generating capacity from the public debt. Institutions such as Ghana Gas, VRA, GPHA, GACL, GNPC and other public and private institutions would be able to finance their investments through this window without burdening the public debt stock. This should significantly improve our debt sustainability profile.
We will work with our development partners and other multi-lateral associates to ensure that Ghana continues on the path of accelerated growth and equitable development into the future.
b. Foreign Exchange
Mr. Speaker , recent measures announced by the Bank of Ghana in response to the depreciation of the cedi created some concern among the business and investment community.
Mr. Speaker , Ghana still remains the most attractive investment destination in West Africa and guarantees peace, safety, stability and security. I wish to assure investors that all agreements governing their investments remain in force and repatriation of profits and dividends are guaranteed. The BOG has clarified its regulations in respect of foreign currency accounts and it is my hope that this has allayed the concerns of both the domestic and foreign investor communities.
Mr. Speaker, Ghana has come from the environment in the 70’s and early 80’s when a command and control economy led to a strict regulation of foreign exchange. Reforms in the mid 80’s saw the introduction of forex bureaus and the liberalization of the foreign exchange regime. In this transition we moved from one extreme to another, a situation in which control of forex was so lax, that Ghana was fast becoming a source of foreign exchange for our neighbours. Huge transactions in millions of dollars were being conducted in forex bureaus. This had not been the original intention.
Dwindling confidence in our currency led to a situation where people hedged on the dollar. Persons with excess cedis converted them into dollars and deposited them in their foreign exchange accounts. We had a situation where forex holdings on behalf of businesses and individuals in our commercial banks amounted to over $3 billion.
In addition, our economy had become increasingly dollarized. Hotel room rates, vehicles, rents, school fees, household appliances, consumer items, cosmetics, clothes and other items were all quoted in dollars. The obvious problem with this is that the dollar is not our national currency. The currency of Ghana is the cedi, and the cedi will only gain strength if we begin to view and use it as that, our nation’s only currency. The Attorney General and the EOCO have been charged to monitor the situation and severely sanction any institution advertising rates or prices and charging in foreign currency. A directive to the same effect has also been issued to government agencies.
c. Transforming our economy
Mr. Speaker, the basic structure of our economy has not changed from colonial times. The Gold Coast was designed by the colonial masters to be exporters of raw material and importers of finished goods. This is what best served their needs and purposes.
After independence our first President Osagyefo Dr. Kwame Nkrumah of blessed memory, sought to break this vicious cycle by establishing numerous state owned industries to produce consumer products for the domestic market as an import substitution measure. Unfortunately, the management of these enterprises became a challenge and soon they turned into a very huge expense on the budget. A decision was made to divest these enterprises to the private sector. Unfortunately, in many cases, the domestic private sector was unable to leverage the financing needed to revamp these industries and bring them back into production.
Mr. Speaker the result is that we are still largely dependent on the export of raw material, gold, cocoa, timber, oil and mineral exports and on the import of finished goods. That is still the basic structure of our economy.
Mr. Speaker, a fundamental problem of our economy is that we do not make what we consume. This is the situation the late General Acheampong sought to address with the “Operation Feed Yourself” and “Operation Feed Your Industries” programmes, which were aimed at strengthening Ghana’s ability to be self-reliant.
Mr. Speaker, in 2013 alone we spent a whopping amount of almost $1.5 billion in foreign currency on the import of rice, sugar, wheat, tomato products, frozen fish, poultry and vegetable cooking oils. Rice accounted for $374 million, fish $283.3 million, wheat $226.7 million, poultry $169.2 million, cooking oils $127 million, tomato products $112.1 million.
Mr. Speaker, imagine if this money had been retained in Ghana. Imagine if it had gone into the pockets of Ghanaian entrepreneurs who would, in turn, spend those cedis at markets, restaurants, beauty shops, pharmacies, shopping centres and other Ghanaian enterprises.
When Ghanaians produce goods that other Ghanaians use, they are then able to re-invest that revenue back into the very communities that patronized them. The money flows in a current, and it fortifies the nation’s economy. That, Mr. Speaker, is the best use of a nation’s currency. Imagine all that we could achieve if in one year, we could spend as much in cedis on locally produced rice, sugar, wheat, tomato products, frozen fish, poultry, vegetable and cooking oils, as we spent in dollars on those very same imported items last year. Just imagine!
Mr. Speaker, as we all know, raw material exports are subject to price fluctuations on the international market. Countries that are dependent on raw material exports are therefore subject to wild cycles of booms and busts.
Mr. Speaker, 57 years after independence, we need to take pause and ask ourselves some critical questions. Can the current structure of our economy carry us to the next level? What changes must we make to create an economic structure that will serve our needs and purposes?
Mr. Speaker, between 2012 and 2013 Ghana lost $1.3 billion in export revenues on account of the decline in cocoa and gold prices. At the same time our import bill rose dramatically to $17 billion.
Can we, as a nation, continue this unbridled importation of everything from plastic dolls to toothpicks? Must we continue to rely on a narrow band of raw material exports? Were we born to be a nation of only shopkeepers and traders? My definite response to these questions is NO!
Once more, Mr. Speaker, we return to the need for change in order to facilitate growth. We must change the structure of our economy. We must reduce the importation of items that we have a comparative advantage to produce. We must add value to our exports through primary, secondary and tertiary processing: add value to our cocoa by increased domestic processing; refine our gold before export; pursue Nkrumah’s dream of an integrated bauxite and alumina industry. We must revamp Tema Oil Refinery, revive BOST, VALCO, Tema Shipyard and Drydock and the many other strategic industries that serve as extra pillars for our economy.
Mr. Speaker, in compliance with the Constitution I am required to present this house with a medium term development framework before the close of this year. I have dialogued with the NDPC that is working on this plan and urged them to come out with a plan that fundamentally addresses this weakness in the structure of our economy. I have specifically tasked them to handle the process in a way as to create a buy-in from all Ghanaians irrespective of political affiliation or societal status. This is not a time to stand divided along any lines; this is not the time to stand on the sidelines; this is the time for us to stand together, as Ghanaians, on the side of Ghana.
In the interim, to kick start this process of transformation, I have tasked the Minister of Trade and Industry to request that the Export Development and Agriculture Investment Fund extend assistance to local investors for increased production of poultry, rice, tomatoes, cooking oil, and fish.
Mr. Speaker, financing has been finalized for the construction of a new sugar processing plant in Komenda in the Central Region.
We are also in discussion with another private sector investor about the establishment of another sugar processing plant in the north near Savelugu. I have requested that the Hon. Minister of Trade and Industry give these two projects his personal attention.
Mr. Speaker, I have also tasked the Minister to speak with the operators of flour mills and introduce incentives for production of composite flours that incorporate more local flour from products like cassava, maize and sorghum.
It is my intention to commence work this year on the realization of the integrated bauxite and aluminium industry, including the revamping of VALCO.
A joint venture agreement between TOR and Petro Saudi is being finalized to revamp the operations of our oil refinery. This will reduce the huge amount of forex we expend on the importation of finished petroleum products.
A Transactions Advisor is being selected to guide the process of choosing a strategic partner to invest in the Tema Shipyard and Dry dock Industry.
I have asked the Ghana Cocoa Board to enter into a strategic partnership to produce jute sacks in Ghana. This will start by the importation of the jute fibres and the sewing of the sacks locally. It will eventually backward integrate into the production of kenaf and the weaving of the jute fibres locally. Cocobod will, at that time, be required to halt the importation of jute sacks and buy all its sacks from this factory.
I have asked the Board and Management of the Electricity Company of Ghana to encourage the local manufacture of electrical products like cables, transformers, meters etc by purchasing from local producers who meet their quality standard.
Mr. Speaker, we will this year launch a broad campaign to encourage Ghanaians to buy made-in-Ghana goods. Any import item we buy as Ghanaians constitutes an export of jobs out of our country, especially in respect of items for which we have a comparative advantage to produce.
Mr. Speaker , last week I held several meetings with a host of leaders in the business community, from large corporations to medium and small-scale enterprises, companies as wide-ranging as CalBank, FinaTrade, and Scancom to Sethi Industries, Beige Capital, Reroy Cables and Agbeve Herbal.
The purpose of these meetings was to open an honest and easy exchange of ideas and information between Government and the private sector. The better we are able to assist one another, the faster we can all help to strengthen the economy by building a Ghana that is self-sufficient and successful.
Mr. Speaker , I was encouraged and inspired by these meetings. The determined, hardworking, visionary men and women I met reaffirmed my belief that Ghanaians are more than capable of creating industries to sustain this country. I met Mr. Magnus Nunoo, President of the National Association of Sachet and Packaged Water Producers. Mr. Nunoo spoke to me with the eloquence and knowledge of an economist; and why not? Mr. Nunoo attended schools in Cape Coast, Ningo and Labone; he read Economics at Legon. Mr. Nunoo introduced the packaging of water in sachets and he now employs over 100,000 people. Mr. Nunoo even found value in his industry’s waste, and became a proponent of commercial-scale plastic waste management.
Mr. Speaker , at this same meeting, I also made an acquaintance of Mr. Tony Senayah, of Horseman Shoes, a company he started in 2009 by buying and selling locally made shoes from a manufacturer in LaPaz. It had always been Mr. Senayah’s dream to build a vocational training institute. One day he saw a business opportunity. He realized that a lot of the young people he knew were skilled at making shoes, but beyond that they didn’t know how to make their work economically viable. Suddenly he saw a way to create employment for young people. He recruited them to make the shoes that he designed. And, Mr. Speaker, I tell you: they are very nice, very comfortable shoes. In fact, I am wearing a pair right now.
This, Mr Speaker, this is what I mean when I say “Made In Ghana”. The people as well as the products. Who we are as Ghanaians has always been the driving force behind what we do and how we do it. This country is more than capable of consistently delivering quality—in people, in performance, in products—if only we demand it of ourselves.
d. Agriculture and Food Security
Mr Speaker, despite the fact that the agricultural sector has lost its prime spot as the largest contributor to GDP to the services sector, agriculture remains a key priority of Government. Government’s vision to ensure food security in Ghana has been largely achieved. This has even been acknowledged by the international community. Last year, 2013, the UN Food and Agriculture Organisation (FAO) and the AU/Forum for Agricultural Research in Africa (FARA) recognized Ghana for achieving the MDG of reducing hunger and malnutrition in advance of the 2015 target date. The award was received by the Minister for Agriculture on my behalf, and it was dedicated to all the hardworking farmers of Ghana. I take the opportunity to salute my predecessors, President Jerry John Rawlings, John Agyekum Kufuor, John Evans Atta Mills (of blessed memory) for the role they all played in helping us achieve this feat.
Mr Speaker, through the use of improved planting material, subsidized fertilizers, extension services, and access to credit we have achieved surpluses in our traditional staple crops: cassava, yam, plantain and maize. This has enhanced food security in Ghana, as these foods are now plentiful in the market at reasonable prices.
And to continue on this positive note, Mr Speaker, I would like to report that even with the huge volume and value of our rice imports, our local rice production has seen a significant increase of about 60%. This has necessitated the establishment by the private sector of two new rice-processing factories in Nyankpala in the Northern Region and Sogakope in the Volta Region. Another rice processing factory is planned for Atsutuare in the Greater Accra Region.
Despite these successes, many challenges still confront the industry. Access to credit, lack of mechanized equipment for large-scale commercial rice production, non-availability of sufficient irrigated lands; all of these conditions constrain increased rice production. However, Government is focused on partnering with the private sector to eliminate as many of these constrains as possible.
Mr Speaker, in this regard, within the past year, Government completed rehabilitation work on some viable irrigation schemes and added more than 1,200 hectares of land to the stock of irrigable land, mainly for rice production. Another 8,000 hectares have been added by the private sector, to supplement nearly 6,000 hectares of land in the three Northern regions alone. That is 15,200 hectares of land total, all devoted to rice cultivation. It is my firm belief that if we maintain this progress, we are making in rice production, Ghana will, in the near future, become a net exporter of rice.
Mr Speaker, as I said earlier, we achieved surpluses in our traditional staple crops including cassava. Cassava is the most consumed crop per capita in Ghana. An abundance of cassava, therefore, represents a good source of income for our farmers, but it also guarantees the availability of local foods such as banku, tuo zafi, gari, kokonte and fufu.
Mr Speaker, when left to our devices, we Ghanaians are exceptionally innovative and industrious. Lately cassava has also been serving as a profitable input for the brewery industry. With the introduction of a new sliding scale for excise based on the use of local inputs, the breweries have been incentivized to introduce sorghum and cassava into beer production. These new brands are proving to be quite popular with consumers. This has been made possible as a result of the availability of 6 million tons of extra cassava, over and above our national demand. The introduction of improved varieties, plus a well-developed value chain as well as the development of business oriented viable Farmer Based Organizations (FBOs) has been the basis of this achievement.
Mr Speaker, we have sustained our programme of subsidies for fertilizer and improved seeds. The fertilizer subsidy programme has increased in quantity from below 50,000 metric tonnes in 2008 when it was initiated to 150,000 metric tonnes in 2013. This year, 2014, the subsidy is expected to cover a volume of 180,000 metric tonnes. I am also pleased to report that as a result of measures put in place, the incidence of smuggling of the product has largely been curtailed.
Under the livestock production programme, the Animal Production Division of the Ministry of Agriculture is assisting farmers in the sub-sector to improve the quality and quantity of meat they supply to the market.
Mr Speaker, Government’s objective is to position agriculture as a truly viable and attractive area for private capital, just as we are seeing with mining, petroleum and housing. I call on the private sector to partner with us to create these new instruments that can allow us to share both the risk and benefits of such large-scale undertakings, which will trigger a more sustainable transformation, to deliver prosperity to our people.
Mr Speaker, I am pleased to report that we’re entering in some of these partnerships already in the area of irrigation development. Collaboration between government institutions and private agribusiness groups is underway to deliver almost 30,000 hectares of irrigated land under the Sissili-Kulpawn project in the West Mamprusi area of the Northern Region.
Mr Speaker, environmental impact assessment studies are also underway for a combined irrigation, flood control and hydroelectric power station at Pwalugu in the Upper East region. The Ghana Commercial Agriculture Project (GCAP) funded by the USAID and the World Bank is working with traditional authorities in the Nasia river catchment area for another irrigation project.
Mr Speaker, as mentioned earlier, work will commence on a new sugar factory at Komenda this year. This will be supported with an irrigation scheme for high yield sugar cane plantation to feed the factory. The factory is expected to create jobs and employment especially within the catchment area, and produce value-added bi-products such as energy and alcohol.
e. Trade & Industry
Since the establishment of the Free Zones in the early 90s, a lot of progress has been made in attracting serious investors into the processing zone. Mr Speaker, the Export Processing Zone is being positioned to attract more export-oriented investments that can generate foreign exchange, create employment and improve livelihoods.
The Ghana Free Zones Board licensed 23 new companies that are expected to generate more than 10,000 new jobs over the next three years.
Mr Speaker, globalization and trade liberalization have brought in their wake a number of unfair trading practices such as dumping by foreign exporters. We are aware of the difficulties encountered by some domestic companies as a result of these unfair trading practices.
To check these practices we will, in the course of this year, submit to Parliament a Bill on the establishment of a Ghana International Trade Commission (GITC), which will enable our nation to take advantage of the remedies on piracy, anti-dumping and countervailing measures. The overall effect of this commission would be to boost our domestic and international competitiveness.
Local content boosting the Ghanaian private sector
Mr Speaker, we have passed the local content law for the Oil and Gas industry. This will allow the Ghanaian private sector to participate fully in the multi-million dollar contracts awarded in the industry. With the passage of this bill, Ghanaian registered companies must quickly build capacity to compete in tenders advertised by the oil companies.
Mr Speaker, Government will also use its financial muscle to boost the Ghanaian private sector. Their success is everybody’s success. Their prosperity is one that will ultimately benefit the entire nation. Ghanaian registered companies that are up to date in their corporate obligations would be given preference in bids under a revised Public Procurement Act soon to be laid before Parliament. Government agencies would be compelled to give first consideration in procurement to goods and services made in Ghana. Value for money and quality will not be compromised in the process.
Ghana Commodity Exchange (GCX)
Mr Speaker, as part of efforts to create an orderly, transparent, and efficient marketing system for Ghana’s key agricultural commodities to promote agricultural investment and enhance productivity, the Government has committed itself to the establishment of a Ghana Commodity Exchange (GCX) and associated Warehouse Receipt System (WRS). This move is to encourage market access and fair returns for smallholder farmers, and to facilitate the formalization of informal agricultural trading activities. It is expected that the establishment of the Ghana Commodity Exchange will position it as a West Africa Regional Hub for commodity trading activities.
Economic Partnership Agreement
Mr Speaker, regarding the Economic Partnership Agreement with the EU, the West Africa Regional bloc is in negotiations. In the interest of regional solidarity, Ghana is committed to the collective position of the Economic Community of West African States (ECOWAS) in conformity with the region’s common goal. I am optimistic about the process of negotiation between the EU and ECOWAS and believe that an equitable and development-oriented regional EPA Agreement will be concluded in line with Market Access Regulations. Ghana must, however, consider traditional measures to guarantee market access seeing as a regional partnership agreement would not have been ratified before the deadline of 14th October of this year.
Mr Speaker, Government will support the Ghanaian industrial sector to enable it to generate jobs, reduce poverty, and increase manufactured exports. This will include affordable financial credit for retooling and expansion.
Ports and Trade Facilitation
As part of measures to decongest the ports and facilitate trade, more non-intrusive cargo scanners will be deployed in 2014 at the various ports and major border posts. I have also directed the Minister for Finance to initiate the revision of the relevant legislative instruments to extend the time for goods meant for warehousing from 3 p.m. to 7.30 p.m. This will also facilitate the delivery of a twenty-four hour service by the Customs Division of the Ghana Revenue Authority.
Mr Speaker, we will reduce the time and transaction costs of clearance at the ports. The case where importers must pay demurrages as a result of inefficiencies not caused by these importers but by state agencies will be corrected.
Mr Speaker, a new Ghana Investment Promotion Act is in force to regulate investment into the country. The GIPC supported by the Ministry of Trade and Industry and the Ministry of Foreign Affairs and Regional Integration has started embarking on aggressive Trade and Investment Promotion activities in the coming years. We have plans to establish Trade Offices in China, Turkey, South Africa and Japan.