Fall in prices account for foreign exchange shortfalls-Selormey

Minority group slams the government for poor economic showing

Political consideration not criterion for credit - Asiedu-Nketiah

Accra (Greater Accra), 28^th October 99

The fall in the prices of three major commodities in Ghana accounts for the shortfall in her foreign exchange earnings, Mr. Victor Selormey, Deputy Minister of Finance, told Parliament on Wednesday.

Mr. Selormey, who was briefing Members on the State of the Economy, said since this year's budget was announced, the prices of cocoa, gold and crude oil on the international market had fallen.

Taking the commodities one by one, the deputy minister said cocoa prices which averaged 1,711 dollars per tonne during the 1997/98 season, had by June this year declined to 1,300 dollars.

He said by September, the figure had further decreased to 1,040 dollars, and blamed the depression on the factors associated with supply and demand.

Mr. Selormey explained that cocoa consumption in Western Europe and North America has been poor, and this has been exacerbated by the general economic downturn in Eastern Europe, particularly Russia, South America and the Far East.

"These trends are expected to continue for at least another year", he said, adding that the average cocoa price for the next year would be about 975.00 dollars per tonne.

On gold, Mr. Selormey indicated that the world price of the commodity, which was 288 dollars per ounce in December last year, declined to 260 dollars per ounce by the end of June this year.

He pointed out that the impact of the price decline of gold on government revenues is the likely loss of royalties and dividends arising from the price declines.

Another major impact of the fall in the price of gold is the downturn of economic activity in the gold producing areas.

The Deputy Minister noted that since usually the mines are the major source of employment in these areas, the impact of any downsizing of activity in a mine is felt in the larger local economy.

Mr. Selormey said at the end of last year, a barrel of crude was quoted at 10.21 dollars but "as we speak this price has more than doubled, and is currently being quoted at about 23.00 dollars, an increase of more than 100 per cent."

"At the time of the budget we had built into our computations a price increase of no more than 25 per cent.

"In the face of declining foreign exchange receipts, the nation has to find extra resources to enable us to import enough crude for our needs, and this undoubtedly has worsened the already bad foreign exchange situation that the country finds itself in."

Basing his arguments on these developments and other related problems facing the nation, the Deputy Minister admitted that, " the government as a prime mover in the economy, is unable to effectively perform its role."

He added that because of its dependence on imported inputs, which it cannot procure due to the reduced supplies of foreign currency, the private sector is also not able to perform its role effectively.

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Accra (Greater Accra), 28^th October 99 --

There was a heated argument between members of both sides of the House after Mr. Victor Selormey, Deputy Minister of Finance had made a statement on the state of the economy.

While members on the majority side were satisfied with the statement, their minority counterparts were calling for a debate.

Mrs. Gladys Asmah, Deputy Minority Leader said after listening to the "dismal picture" painted by the Deputy Minister, "members will definitely need copies of the statement for careful study to enable them to make meaningful contributions to a possible debate."

Mr. J H Owusu-Acheampong, Minister of Food and Agriculture, said the Minority could only call for a debate if they table a motion on the statement.

Dr. Kwabena Adjei, Majority Leader, said if the Minority needs the statement to be debated, the Business Committee is ready to programme it.

The Speaker of the House, Mr. Justice D F Annan, ruled that comments are normally allowed on urgent statements, but debates can only ensue when members who are not satisfied and bring motions before the House.

Reacting to the statement, Dr. Kofi Konadu Apraku, Minority Spokesman on Finance, said the statement paints a gloomy picture of the economy both present and future.

Dr. Apraku said as indicated by the Deputy Minister, the country is "broke", and that the picture is a major indictment on any government.

"I have never heard a clearer and eloquent admission of failure in my life."

He assured the Majority of the Minority's preparedness to co-operate with them to find a "credible solution that has eluded them for so long to the problem."

Dr Adjei described Dr Apraku's comment as an "eloquent testimony of ignorance about the state of the economy".

"We are prepared to meet them one by one, and put in counter-motions which have the potential of defeating their motion."

Squadron Leader Clend Sowu,( NDC-Anlo), called for a collective effort to address this national problem.

Mr Hackman Owusu-Agyemang, (NPP-New Juaben North), wondered why so much was spent on the acquisition of a Presidential Jet when "the economy is so bad."

Mr Owusu-Agyemang said the Deputy Minister has shown without a shadow of doubt, that "this government has failed the nation", adding, " by this admission of failure, the government of the NDC be voted out of office"

Mr Seidu Adamu, Deputy Western Regional Minister, suggested that the NDC should continue to manage the economy in the prudent way it has done.

Papa Owusu-Ankomah, (NPP-Sekondi), said the Deputy Minister's delivery was a "statement of lamentation", adding that it seemed to him that from what was said, the government is unable to put the economy on an even keel without recourse to external assistance.

"From what I have heard, it is crystal clear that the government needs help which this side of the House is prepared to offer on conditions that the government will be honest enough to tell the country that it has failed".

Mr Doe Adjaho, Majority Chief Whip, (NDC-Avenor), blamed the country's economic predicament on external shocks, saying the fall in the prices of cocoa and gold, and fuel price increases on the world market, have contributed to the country's economic problems.

He said the economy was doing well until "these external shocks", noting that inflation, interest rates and budget deficit had reduced considerably.

Mr. Kwamena Bartels, (NPP-Ablekuma North), said the NDC can now be described as the "National Disaster Congress).

He said the NDC government, which claimed to have come to stop the decay in the economy has only come to supervise a steady decline in the economy.

He, therefore, asked the government to admit its failure and resign.

Mr. Kobina Fosu, (NDC-Asikuma-Odoben-Brakwa), said 1999 is a critical year and to describe it as a difficult year is an understatement.

He said anybody who claims to be patriotic must have sympathy for the national economy.

"Anyone who does not appreciate the predicament we are in today, must not call himself a patriot".

He asked the members to send strong signals to their constituents that "we are to unite to get the economy out of the woods".

"We must send strong signals to the international community that it is not enough to tag Ghana as a paragon of democracy in Africa.

"This must go hand in hand with massive infusion of funds to support the economy".

Mr. Kosi Kedem, (NDC-Hohoe South), said the Minister's statement "goes to demonstrate the NDC government's policy of not doing politics with the economy".

He said the Minister needs commendation for coming to the House to "tell it as it is".

He noted that this year has been a difficult one, saying even the "Asian tigers" could not withstand the adverse impact on the world economy.

Mr. Kedem said the economic situation as told by the Minister, does not mean members should throw up their arms in despair, adding that both sides of the House need to re-examine the economy with the view to putting it back on track.

Dr. Kwabena Adjei, described the day's sitting as "interesting but serious" and announced that the House would be having a series of such briefings by other sector ministers.

Dr Adjei said "let us believe that we are a people going through parliamentary democracy. This is the time that we should demonstrate to the whole world that we have come of age.

"In a period of crisis like this, let us bring our collective wisdom together to address this economic problem".

After the comments, Mr. Justice Daniel Francis Annan, the Speaker, requested the Business Committee to prepare the time and date for a possible debate on the Minority's motion, as early as possible.

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Accra (Greater Accra), 28^th October 99

Mr. Johnson Asiedu-Nketiah, Deputy Minister of Food and Agriculture, told Parliament on Wednesday that political consideration does not feature in the criteria for the selection of beneficiaries for credit in the Youth-in-Agriculture programme.

He said there is also no partisan consideration for the composition of the management teams for the implementation of the programme.

Mr. Asiedu-Nketiah said the ministry is not aware that monies meant for the Youth-in-Agriculture programme and lodged in the various District Assemblies, are being given to only members of the National Democratic Congress (NDC).

He was reacting to a question by Mr. Stephen Kwaku Balado Manu, (NPP Ahafo-Ano South) who wanted to know whether the Ministry is aware that such monies go to benefit only NDC members, during "Question Time" in Parliament.

The deputy minister explained that the programme was initiated by the government to address the credit needs of the youth, who are either already engaged in or have the strong desire to go into agriculture.

Mr. Asiedu-Nketiah said the programme was designed for implementation in two phases, the first phase is to concentrate on small and micro scale farmers.

He said to benefit from the credit, the farmers group must be an already existing one with members having worked together for some time and therefore know each other enough to ensure group guarantee of repayment of the loan.

Phase two of the programme will focus on youthful entrepreneurs who have training and experience in agriculture and have bankable projects.

The Deputy Minister added that the Ministry would prepare model project proposals for crops, livestock, aquaculture, farm service, simple processing, storage and marketing to guide prospective applicants.

He told the House that the implementation of the programme is based on the decentralised structure of the Ministry, consisting of three-tier management teams, at the national, regional and district levels.

Mr. Asiedu-Nketiah said the National Management team is charged with the overall implementation and management of the programme, while the regional teams screen farmers' groups submitted by the districts for funding and also monitor the implementation of the programme at that level.

He said the district teams are responsible for the actual implementation of the programme in the districts.

They screen applicants for recommendation to the regional teams, monitor the disbursement and utilisation of credits and inputs supplied to farming groups.

They also educate the beneficiaries on the need for repayment, among other duties.

Each district management team is made up of the District Chief Executive, District Director of Agriculture, Agricultural Development Bank representative, National Service Co-ordinator, District Co-ordinating Director, National Mobilisation Programme and Non-Formal Education Division of the Ministry of Education.

Asked whether he was aware of a circulated memorandum from the Vice-President to all the ministries, directing that the District Management teams of the programme should include representatives of the Progressive Voluntary Organisations (PVOs), Mr. Asiedu-Nketiah replied in the negative.

On plans by the ministry to build storage facilities for farmers in the Accra plains, Mr. Asiedu-Nketiah told the House that the government is, as much as possible, divesting the provision of such infrastructure to the private sector.

"We don't intend to provide storage facilities but we will establish strategic stocks and maintain a certain level of food security.

"The private sector is being encouraged to go into other aspects of storage and we will continue to talk with prospective investors," he said.

Mr. Asiedu-Nketiah said the Ministry has trained most of its agricultural extension agents in new technologies to help reduce post-harvest losses.

He said notable among the technologies is that of the construction of narrow cribs to help dry farms to produce and in certain cases, used as storage structures.

In addition, Mr Asiedu-Nketiah said, under the Village Infrastructure Project (VIP) of the Ministry, provisions have been made for the construction of appropriate storage facilities for needy rural communities, including the Accra plains.

Asked about the level of post-harvest losses in the Accra plains, the deputy minister said he did not have information on that but nationally, there are between 25 per cent and 30 per cent post-harvest losses, adding that the introduction of the post-harvest technologies is to address the problem.

On the silos built by the Ghana Food Distribution Corporation to store food for redistribution, Mr. Asiedu-Nketiah said some of them have been rented out while appropriate use is being found for others.

He said some of the silos will be put out for privatisation adding that the whole corporation was currently being studied for restructuring.

Questioned about the Ministry's programme to provide the Builsa District with dams and dug-outs to support dry season farming, the Mr. Asiedu-Nketiah replied that under the Upper East Land Conservation and Rehabilitation Project (LACOSREP), five dams had been rehabilitated in the district.

These are located at Chiok, Sinyansa, Wiaga, Bandem and Gbedema/Dambousa.

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