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THE BUDGET STATEMENT and ECONOMIC POLICY Kwadwo Baah-Wiredu, M.P. His Excellency John Agyekum Kufuor

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THE BUDGET STATEMENT and ECONOMIC POLICY Kwadwo Baah-Wiredu, M.P. His Excellency John Agyekum Kufuor REPUBLIC OF GHANA THE BUDGET STATEMENT AND ECONOMIC POLICY of the GOVERNMENT OF GHANA for the 2007 FINANCIAL YEAR presented to PARLIAMENT on Thursday, 16th November, 2006 by Kwadwo Baah-Wiredu, M.P. MINISTER OF FINANCE AND ECONOMIC PLANNING on the authority of His Excellency John Agyekum Kufuor PRESIDENT OF THE REPUBLIC OF GHANA The 2007 Budget Statement and Economic Policies of the Government is based on the latest information available as at the end of September 2006 and projections up to the end of December 2006. The information is based on inputs from all MDAs, General Public and other sources. For Copies of the statement, please contact the Public Relations Office of the Ministry: Ministry of Finance and Economic Planning Public Relations Office – (Room 303 or 350) P.O. Box MB 40, Accra, Ghana. The 2007 Budget Statement and Economic Policies of the Government is also available on the internet at: www.ghana.gov.gh and www.mofep.gov.gh ii ACRONYMS AND ABBREVIATIONS ATA Africa Travel Association CBD Central Business District CBFMC Community Based Fisheries Management Committee CCTV Closed Circuit Television CFLs Compact Fluorescent Lamps CGM Cassava Green Mite COPAL Cocoa Producers Alliance CHPS Community Health Planning Schemes CICs Community Information Centres CRI Crop Research Institute DCEs District Chief Executives DFR Department of Feeder Roads DMHIS District Mutual Health Insurance Schemes DSUP Distribution System Up-grade Project DUR Department of Urban Roads DVLA Driver and Vehicle Licensing Authority EDIF Export Development and Investment Fund EIA Environmental Impact Assessment EPA Economic Partnership Agreement ESP Education Strategic Plan ETU Electricity Transmission Utility GDP Gross Domestic Product GHA Ghana Highway Authority GIFTEL Ghana Investment Fund for Telecommunications GIPC Ghana Investment Promotion Centre GLDB Grains and Legumes Development Board GPRS II Growth and Poverty Reduction Strategy II GSB Ghana Standard Board IPPD2 Integrated Personnel and Payroll Database 2 LEAP Livelihood Empowerment Against Poverty MASLOC Micro Finance and Small Loans Centre MDG Millennium Development Goals MLFM Ministry of Lands, Forestry and Mines MMT Metro Mass Transit MMYE Ministry of Manpower, Youth and Employment MoC Ministry of Communications MOE Ministry of Energy MOFA Ministry of Food and Agriculture MOTDR Ministry of Tourism and Diasporan Relations MOWAC Ministry of Women and Children’s Affairs NBSSI National Board for Small Scale Industries NCA National Communications Authority iii NDPC National Development Planning Commission NGOs Non-Governmental Organisations NRSC National Road Safety Commission NYEP National Youth Employment Programme PSC Public Services Commission RSDP Road Sector Development Programme TSDP Transport Sector Development Programme VRA Volta River Authority VSAT Very Small Aperture Terminals WTO World Trade Organization iv Growth with Stability TABLE OF CONTENTS SECTION ONE: INTRODUCTION......................................................................... 9 SECTION TWO: WORLD ECONOMIC DEVELOPMENTS AND OUTLOOK ....... 13 THE WORLD ECONOMY ............................................................................................ 13 THE AFRICAN ECONOMY........................................................................................... 19 SECTION THREE: DEVELOPMENTS AND OUTLOOK IN THE WEST AFRICA SUB-REGION .................................................................................................... 22 THE WEST AFRICAN ECONOMY .................................................................................. 22 MACROECONOMIC DEVELOPMENTS IN THE WAMZ................................................ 23 SECTION FOUR: MACROECONOMIC PERFORMANCE IN 2006 ....................... 29 Real Sector .................................................................................................... 31 FISCAL DEVELOPMENTS............................................................................................ 39 Receipts......................................................................................................... 40 Payments....................................................................................................... 44 DEVELOPMENTS IN PUBLIC DEBT AND AID MANAGEMENT................................ 49 Developments in Monetary Policy..................................................................... 61 EXTERNAL SECTOR DEVELOPMENTS................................................................ 68 SECTION FIVE: MACROECONOMIC FRAMEWORK FOR THE FOR THE MEDIUM-TERM 73 MACROECONOMIC POLICIES, STRATEGIES AND TARGETS FOR 2007...................................... 75 POLICY SUPPORT INSTRUMENT AND BENEFITS FOR GHANA................................................. 77 RESOURCE MOBILISATION AND ALLOCATION FOR 2007........................................ 81 Resource Mobilisation ..................................................................................... 81 EXEMPTIONS......................................................................................................... 81 PAYMENTS............................................................................................................ 84 Statutory Payments ........................................................................................ 84 OVERALL BUDGET BALANCES ..................................................................................... 87 Monetary and Exchange Rate Policies (Outlook) ................................................ 88 EXTERNAL SECTOR FOR 2007.................................................................................... 88 EXPECTED DEBT RELIEF FOR 2007 (HIPC AND MDRI) ............................................ 90 SECTION SIX: SECTORAL PERFORMANCE AND OUTLOOK FOR 2007 .......... 91 PRIVATE SECTOR COMPETITIVENESS .................................................................. 92 1 Towards Fair Wages Growth with Stability Ministry of Food and Agriculture (MOFA)........................................................... 93 Ministry of Lands, Forestry and Mines (MLFM)................................................. 118 Ministry of Energy (MOE) .............................................................................. 129 Ministry of Trade, Industry, PSD and PSI (MOTI, PSD & PSI)............................ 139 Ministry of Tourism and Diasporan Relations (MOTDR)..................................... 150 Ministry of Fisheries ...................................................................................... 156 Ministry of Water Resources, Works and Housing (MWRWH) ............................ 161 Ministry of Transportation.............................................................................. 174 Ministry of Communications........................................................................... 192 Ministry of Harbours and Railways.................................................................. 202 Ministry of Aviation ....................................................................................... 207 HUMAN RESOURCE DEVELOPMENT .................................................................... 212 Ministry of Education, Science and Sports (MOESS) ......................................... 213 Ministry of Manpower, Youth and Employment ................................................ 233 Ministry of Health ......................................................................................... 242 Ministry of Women and Children's Affairs ........................................................ 253 GOOD GOVERNANCE AND CIVIC RESPONSIBILITY .............................................. 260 Ministry of Local Government, Rural Development and Environment (MLGRDE).. 262 Office of Government Machinery .................................................................... 277 Ministry of Foreign Affairs, Regional Co-Operation and Nepad (MFARCN)........... 306 Ministry of Finance and Economic Planning (MOFEP)........................................ 313 Ministry of Parliamentary Affairs (MPA)........................................................... 335 Audit Service (AS)......................................................................................... 337 Electoral Commission (EC)............................................................................. 340 Office of Parliament ...................................................................................... 342 District Assemblies Common Fund (DACF) Administrator .................................. 346 Ministry of Information and National Orientation (MOINO) ............................... 348 Ministry for Public Sector Reforms (MPSR) ...................................................... 351 National Media Commission ........................................................................... 359 Ministry of Justice......................................................................................... 362 Ministry of Defence (MOD) ............................................................................ 365 National Commission for Civic Education (NCCE) ............................................. 373 Commission on Human Rights and Administrative Justice (CHRAJ).................... 376 Judicial Service............................................................................................. 380 Ministry of Interior........................................................................................ 382 Ministry of Chieftaincy and Culture ................................................................
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