GRi Business, Economics & Finance 24 –
01 - 2003
Professor Bartholomew Armah at a
policy seminar in
Prof. Armah said without an
improvement in their ability to accurately forecast inflation and exchange
rates and the rate of expansion in the tax base in particular, revenue targets
would not provide realistic indications of the revenue generating potential of
the economy.
He noted that it was interesting
that the overall result is a perverse situation where the revenue agencies on
the one hand complain about their inability to undertake their duties due to
lack of resources, “yet on the other hand their successes in meeting their
targets suggests otherwise”.
He congratulated the revenue
collecting agencies for exceeding their targets for 2001 but noted that it was
vital for the government and other relevant agencies to know the realistic
targets that they can collect to enable the generation of accurate GDP figures.
Giving the trends in actual
versus projected GDP and inflation targets, Prof. Armah said between 1999 and
2001, the actual real GDP growth rate was overstated by an average of one
percentage point.
“In other words, the
government's real GDP projections exceeded the actual by less than one
percentage point. On the other hand, the projected inflation rate was
approximately nine percentage points lower than the actual.”
In 2000, the government's
projection was 28 percentage points lower than the actual figure. This,
according to Prof Armah, implies that the nominal GDP was actually higher than
predicted; hence, the revenue targets were based on a lower nominal GDP than what
should have been used.
He said since inflation
projections have persistently understated the actual, it also means that the
revenue estimates have consistently being biased downwards. "The
consistency in the downward bias of the estimates could have been addressed if
the real GDP projections had been overstated by the same margin as the
inflation estimates.
"However, this has not been
the case. The margin of error in the real GDP rates has been consistently in
the range of one to two percentage points; in general GDP growth is less
volatile or tends to be more stable than inflationary trends."
Prof Armah said when this
happens it means that projected inflation becomes more accurate and the revenue
agencies will become hard pressed to meet their targets assuming targets are
based on trends in the nominal GDP growth rate.
He said in 2002 for instance,
the inflation rate prediction of 13 percent appears well within reach. But
correspondingly, the revenue agencies by September were below target.
The Customs Excise and
Preventive Service (CEPS) estimated to collect 2,739.9bn cedis but actually
collected 2,950.5bn cedis. The Internal Revenue Service projected 1,813.5bn but
realised 1,811.8bn cedis while the VAT Service projected 788.5bn cedis, but
collected 696.3bn cedis.
Prof Armah called for the
setting of real estimates to enable revenue agencies to do a good job and not
set low targets, exceed them and then celebrate. He suggested that there should
be close technical relationship between the revenue collecting agencies, Bank
of Ghana, Ghana Statistical Service and the Ministry of Finance.
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Currency Buying Selling
U.S. Dollar 8,325.55 cedis
8,547.45 cedis
Pound
Swiss Franc 6,100.40 6,261.53
Canadian Dollar 5,443.99 5,586.75
Danish Kroner 1,200.38 1,232.01
Japanese Yen 70.38 72.23
South African
Euro 8,928.35 9,162.47
CFA Franc 13.61 13.97
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The much-awaited Bill, which,
should have been effective following the outdating of the previous one in the
mid-90's, is currently before the Attorney-General for appropriate drafting and
advice.
Kwadwo Adjei-Darko, Minister of
Mines, told the Ghana News Agency (GNA) Business Desk on Wednesday that the new
Law would have a lifespan of about 15 years as against the old law, which was
for a little over 10 years.
Adjei-Darko was reacting to
comments that the Law had delayed and was making the industry lose some of its
principal characters.
The absence of a new favourable
Law has forced mining companies to fold up or relocate and caused the mining
industry in
He explained that 15 years was a
reasonable period for junior companies and mining companies themselves to make
up their minds to want to invest in the industry. The absence of the Law means
that there is very little exploration going on while the few projects underway
are all on hold.
About 10 companies in
exploration and other mining service areas have relocated in other countries on
the continent. They include Ausdril, Cluff Mining, Drill Sure, Guinea Coast Mining, Stanley
Mining, West Africa Drilling Services, Barnex Prestea
and Degussa Huls.
Statistics made available to the
GNA indicate that from a high number of 62 mining licences issued in 1997, the
number dropped sharply to 20 the following year and to only eight last year.
Reconnaissance licenses went up
from a low of two in 1991 to 42 in 1995 but slumped to 11 in 2001. Giving
highlights of the upcoming Law, Adjei-Darko said it has a Stability Development
Clause and another clause that would ensure the establishment of a refinery.
The Stability Development Clause
would ensure that investors operated in an atmosphere where they were
guaranteed stability in their activities. He said mining is an expensive
venture and anyone who invests in it must be guaranteed a return on his
investment.
However, industry practitioners,
experts and analysts who spoke to the GNA Business Desk said
However, they said, when things
go the way they are going, they would only be heading for a ditch. This means
that the industry needs to start finding new ore bodies very soon if
Some members of the Ghana
Chamber of Mines said mining in
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The gathering, which would bring
together participants from 16 Regional Member Countries (RMCs)
of the Bank, is designed to draw from the regional and global expertise of the
three partner institutions in various aspects of combating corruption, a
statement from the Bank receive in Accra on Thursday said.
The main objective of the
workshop is to assist participants develop a framework for a National
anti-corruption Strategy and Action Plans, the statement said. It would also
help them strengthen the implementation prospects of existing strategies; and
to better identify resource and capacity constraints in the fight against
corruption.
The statement said each country
delegation would consist of a mix of practitioners, advocates and policy makers
from specialized anti-corruption agencies, senior policy makers from the
ministries of justice and finance, elected members of parliament, the private
sector, the media and other elements of civil society.
In addition to subject
specialists from the AfDB, AU and TI, recognized
experts from the World Bank Institute (WBI), the Global Coalition for Africa
(GCA), and six RMCs with a National Strategy and
Action Plans would attend the workshop as resource persons.
Bilateral partners with regional
and global experience in this area will also be on hand to share their
experience. Participants are expected to reach consensus on a framework for
developing a National Anti-Corruption Strategy and Action Plans, with a view to
systematically addressing the corruption challenge, improve efficiency and
effectiveness, enhance cross-boarder cooperation and reduce duplication among
bilateral and multilateral partners in their support for combating corruption.
The 10 participating countries
would be
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He said while
President Kufuor made the call
when a 26-member delegation from the Japanese Chocolate and Cocoa Association
on a five-day visit to
The visit, which forms part of
activities to mark the 50th anniversary celebration of the Association, was to
have an insight into the cocoa industry in
President Kufuor said the two
countries could capture a major portion of the trade in the cocoa industry
worldwide when such a partnership was intensified. He thanked the delegation
for the visit, which would not only strengthen the cordial relationship between
both countries but would also improve trade relations between them in the cocoa
industry.
Yoshihiro Ohtsuka,
General Manager of Lotte Company of
Since their arrival last
Tuesday, the delegation has visited the Cocoa Research Institute of Ghana
(GRAIG) at New Tafo in the Eastern Region, interacted
with some cocoa farmers, held a meeting with the
management of the Ghana Cocoa Board (COCOBOD) in
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Accra (Greater Accra) 24 January
2003- The Ada Songor Basin
Lagoon Owners Association (ASBLOC) on Thursday appealed to the government to
re-open negotiations with it on ways to develop the salt industry in the area
for the benefit of all.
The association said it was ever
ready to meet with any designated government officials to sort out all
outstanding issues for a negotiated solution to promote national interest and
to meet the legitimate concerns of the land owning clans.
Clement Otu
Amate, Chairman of the Association, told a meeting of
17 companies, which are prospective investors in the salt industry, that ASBLOC's efforts to get the government to dialogue on their
concerns had so far failed to yield the necessary dividend.
“If officialdom does not still
feel inclined to dialogue with us on the Songor
issue, we shall not press for it any more,” he said. According to Amate the inability of the Government to repeal PNDC Law
287 from the statute books was a major obstacle to the management of the
lagoon.
He said the three clans, which
are the rightful owners, had through the ASBLOC established an Ada Songor Development Trust, a
company limited by guarantee to take over, manage and control the lagoon and
its adjoining lands on sound business relationships with prospective investors
once the law was repealed.
Amate appealed to citizens of the
area, especially those involved in the campaign against the Association, to
read its constitution to clear any doubts that they might have about ASBLOC.
He assured the investors of the
readiness of the Association to join hands with them to develop the salt
industry at Songor. “Our aim is to establish with you
a relationship that is fair and equitable to both sides so that our people,
especially the chiefs of the villages in the areas of your operations will feel
that they too have a stake in the success of your companies.”
Dr Seth Otuteye,
Chairman of the Legal Committee of ASBLOC, said the government had no legal
title to the land since it was holding it in trust for the people. He said the
Association believed that it was better to encourage indigenous Ghanaian
investors into the Songor salt industry than to seek
foreign investors, who would in the end repatriate all the benefits to their
home countries.
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Accra (Greater Accra) 24 January
2003- The Ministry of Energy said on Thursday that the new petroleum prices
announced last week still contained some element of cross-subsidy in favour of
kerosene, pre-mix fuel and LPG.
A statement signed by the Public
Relations Officer, Ms Florence Boakye said the
government was constrained to keep the price differential between petrol,
kerosene and pre-mix as minimal as possible.
This is because the sale,
distribution and availability of these fuels have been subject of abuse by
unscrupulous commercial and private persons and dealers.
These people had taken advantage
of the subsidised prices of kerosene and pre-mix to, among other things,
adulterate petrol and diesel fuels for sale to unsuspecting motorists and other
users.
“The benefit, especially, to
rural and fishing communities for which the price subsidy was intended is
therefore, lost through the misapplication of the fuels for unintended and
illegal purposes to the detriment of the very people government had sought to
assist.”
The statement said the
government has concluded that regular availability of kerosene and pre-mix
should be assured. The Ministry confirmed that the National Kerosene
Distribution Programme, which involves the free supply of surface tanks and
dispensing equipment, is being steadfastly implemented with the assistance of
the district assemblies.
The statement said the ministry
has taken steps to further ensure the constant flow of these critical fuels to
the needy communities by the oil marketing companies and other accredited
agencies. It said random field inspections would continue to be conducted and
offenders would be prosecuted.
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