CEPA calls for clarity in 2000 budget

Tema workers refuse to call-off strike

Banks resume normal business

All-Share Index goes up, shares traded still low 

Accra (Greater Accra) 3 Feb. 2000

The Centre for Policy Analysis (CEPA) has asked the government to ensure that this year's budget reflects the totality of all government expenditure, including all items to be charged on the Consolidated Fund.

The budget must also state clearly all means of raising revenue, giving both international and domestic payments, as well as grants, gifts and loans.

Dr Joe L. S. Abbey, Executive Director of the Centre, said this at a pre-budget seminar organised jointly with the Institute of Economic and Financial Journalists (IFEJ) in Accra on Wednesday.

It was meant to give a broad insight to various aspects of budgets and some underlying factors that go into a balanced budget.

Dr Abbey said it is likely this financial year would be very difficult since the unfavourable factors that began in the second half of last year still persist.

He said the terms of trade shock, first evident in the second half of 1999 and which are still persisting, made a negative impact on an already difficult situation.

"This was not helped by delays and the cancellation of planned external aid flows."

Dr Abbey said the situation deteriorated on the external front as well and this resulted in higher borrowing from the banking system to finance the 1999 budget.

The "cocoa shock" that saw the reduction in price from 1,900 dollars to 1,450 dollars between 1997 and 1999, might continue this year as the problems of increased production by producers, among other factors, have not changed.

"This will result in a further loss of about 350 dollars per tone. In this instance, paying farmers the same producer price for the third year running will be difficult."

The CEPA boss said at average prices, the budget needs to look aggressively for funds from local and foreign donors to support such payments.

He said with this situation, it would be impossible to achieve a balanced budget, not even in 2001, the initial year set by the National Economic Forum (NEF) to achieve a balanced budget.

Dr Abbey said he was positive that the unfavourable international economic scene, characterised by the increasing fall in export prices of cocoa, gold and non-traditional exports, and a corresponding high price of imports such as crude oil and machinery, might not change in the short term. The government should therefore work hard at increasing domestic sources of revenue.

He said in order to achieve a balanced budget, the government must ensure that

the coming budget is devoid of unnecessary loans which would throw the nation into excessive borrowing.

If this is not done, it will raise the country's indebtedness, leading to borrowing and therefore the postponement of satisfying critical social needs.

"There is, indeed, the need for us to incur debt cautiously so that we can easily handle them, especially against the background that we do not have a high degree of savings culture in this country."

Dr Abbey urged the use of aid wisely so that money, raised from other sources could be used for the maximum development of the private sector.

"In order to ensure real growth in the domestic market, we must ensure high

investment in that sector, and where these private sector institutions are not able to raise their own funds, (the) government can come in to support them raise the required capital."

He called for greater vigilance in government expenditure and what is driving them while making sure that revenue collection procedures are not only widened but also made efficient.

Dr Abbey said Ghana has demonstrated in the past that it has the ability to look crisis in the face and manage it efficiently through tough negotiations with donors and Ghanaians and this can be done again.

"We do not have to cloud our minds into a state of hopelessness. We should resolve to find solutions to overcome our problems as we did in the first half of 1999.

"Ghanaians should stop politicising issues and see things in the right perspective in order to have a broad expertise to solve the problems in the country."

This year being an election year imposes a great responsibility on the government, he said and expressed fears that resources may be found by all means to complete some projects which may lead to the starving of certain sectors of the economy..

Dr Abbey suggested that VAT should be brought under the Customs, Excise and

Preventive Service (CEPS) to ensure that all goods, including those smuggled into the country, can be checked by CEPS.

He said the full impact of VAT has not been realised and called for a comprehensive analysis of the tax regime before any increase or change is made.

The government is proposing a 2.5 per cent increase in VAT to 12.5 per cent.

On the issue of providing subsidies, Dr Abbey said it is important to explain issues such as who would benefit from them, why, and how the government or the designated subsidised body determines to raise funds for its sustenance.

On the privatisation of certain enterprises, especially utilities, Dr Abbey said it is a fact that some services are best when left in the hands of the state. This is because when such services are undertaken by the private sector they might not be accessible to some people.

GRi../

Tema (Greater Accra), 3^rd February 2000

Hundreds of workers belonging to the Industrial and Commercial Workers Union in Tema on Wednesday, refused to call-off their strike until the grievances, which led to the action have been resolved.

The Tripartite Committee comprising the government, Ghana Employers Association and the Trades Union Congress (TUC) in a communiqué on Monday night called on the striking workers to end their action.

This was communicated to the workers at a rally at Tema Industrial Recreation Area (TIRA) to review the action but the workers said they did no trust the Committee because of the way it had handled issues concerning workers over the years.

Appeals by Mr. Kwame Amoah-Bosompim, National Chairman of the ICU and Mr. Francis Davor, National Secretary, fell on deaf ears as the workers shouted "no way, no certificates, no work".

"Looking at the sentiments, the decision of Tema workers is that they want to see a total resolution of everything and this is the message I am sending back", Mr. Amoah-Bosompim said.

The meeting was called off and the workers asked to report at the same venue on Friday, February Four for an update.

ICU called the one-week strike, which started on Monday to protest against the way Bank for Housing and Construction (BHC) and Ghana Co-operative Bank were liquidated.

It is also in solidarity with workers of Ghana Textile Manufacturing Company (GTMC), Akosombo Textiles Limited and other textile and wire weaving companies, who are demanding certificates to join ICU instead of the Textile, Garment and Leather Employees Union (TEGLEU).

Mr. Wilson Agana, Chairman of the Tema District Council of Labour (TDCL), said the action is in defence of the 1992 Constitution and International Labour Organisation laws, which guarantee freedom of association.

The strike has partially affected few establishments in Tema with senior management personnel performing roles of junior workers.

The Commercial Banks whose workers belong to ICU worked on Wednesday.

Accra (Greater Accra) 2 Feb. 2000

Normal business began on Wednesday at commercial banks in Accra after brief stoppages on Tuesday when the Industrial and Commercial Workers Union (ICU) of the Trades Union Congress asked their members to lay down their tools.

They were protesting against what they called injustices on the labour front.

Most of the banking halls that the Ghana News Agency visited were busy with bank staff working to ensure that customers were served with minimum delay.

The banks visited included the High Street and Ring Road Central branches of Standard Chartered Bank (SCB), the Ministries, High Street and Boundary Road branches of Ghana Commercial Bank (GCB) and the Kwame Nkrumah Circle and High Street branches of Barclays Bank.

The others were the Adabraka and the Ring Road branches of the Agricultural Development Bank and SSB Bank at Kokomlemle

Meanwhile the ICU on Wednesday asked its striking members to resume work on Thursday.

This follows decisions reached at a tripartite meeting held with the Minister of Employment and Social Welfare and the Ghana Employers' Association (GEA) on Tuesday.

Mr Napoleon Kpoh, General Secretary, speaking to hundreds of workers, who converged at the TUC offices on Wednesday said ICU executives met with local union leaders in the morning and agreed that the striking workers should resume work unconditionally.

He said the meeting deliberated on the content of a communiqué issued after Tuesday's meeting.

Mr Kpoh said in view of the developments, the workers are to resume work unconditionally pending the outcome of the task given the GEA to resolve all pending labour disputes.

GRi../

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Accra (Greater Accra) 2 Feb. 2000

The All-Share Index of the Ghana Stock Exchange (GSE) on Wednesday registered another upward shift as Guinness Ghana Limited (GGL) gained nine cedis but total shares traded remained low.

The All-Share Index reached 742.33 points with a 0.67-point gain while the change in the year to date moved up to 0.84 per cent.

Total shares traded went up from 4,800 to 9,300 but analysts described it as very low compared to a total offer of 422,530 shares. Shares offered on Monday were higher at 503,470 shares.

Bids also declined from 551,540 to 46,950. Market capitalisation finished trading up at 3,215.15 billion cedis compared to Monday's opening of 3,214.09 billion cedis.

In the broader market, there was only one price change.

GGL gained nine cedis to close trading at 960 cedis.

The following are the last prices of listed equities in cedis:

ABL 470

AGC 18,700

ALW 2,489

BAT 466

CFAO 38

EIC 1,880

FML 935

GBL 1,450

GCB 770

GGL 960 +9

HFC 750

MGL 200

MLC 150

MOGL 14,500

PAF 295

PZ 800

SCB 19,200

SPPC 150

SSB 1,988

UNIL 1,850

UTC-E 125

CMLT 420

GRi../

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