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Table of Contents 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 ................................................................. 392 National Labour Commission .......................................................................... 395 Public Services Commission ........................................................................... 397 National Development Planning Commission (NDPC) ........................................ 400 2 Towards Fair Wages Growth with Stability SECTION SEVEN: POVERTY REDUCTION EXPENDITURES AND PROGRESS TOWARDS ACHIEVING THE MILLENIUM DEVELOPMENT GOALS .................. 404 GOVERNMENT SPENDING ON POVERTY REDUCTION RELATED EXPENDITURES IN 2006 ............. 404 SECTION EIGHT: POLICY INITIATIVES FOR 2007 BUDGET .......................... 415 PRIVATE SECTOR DEVELOPMENT ...................................................................... 416 CAPITAL MARKET DEVELOPMENT .............................................................................. 417 PROMOTION OF AN INDEPENDENT INVESTMENT AUTHORITY ............................................. 419 INVOLVING GHANAIANS IN DEVELOPMENT FINANCE: THE GOLDEN JUBILEE BOND .................. 421 INTERNATIONAL FINANCIAL SERVICES CENTRE ............................................................. 422 REVENUE ENHANCEMENT, TAX RELIEFS AND INCENTIVE MEASURES, ................... 427 TAX INCENTIVES .......................................................................................... 434 DIVERSIFYING OUR SOURCES OF FINANCING ................................................ 443 ENERGY ....................................................................................................... 445 PUBLIC SECTOR WAGE REFORM .................................................................... 447 SECTION NINE: IMPLEMENTATION CHALLENGES ......................................... 452 MAINTAINING MACRO-ECONOMIC STABILITY ............................................................... 452 DOING BUSINESS ................................................................................................. 454 LOW ABSORPTION CAPACITY ................................................................................... 455 SECTION TEN: CONCLUSION ................................................................... 456 THE LIST OF CONTRIBUTORS TO THE NATIONAL BUDGET ........................... 458 LIST OF TABLES TABLE 1: PERCENTAGE GROWTH IN AGRICULTURE (2003-2006) ............................................ 33 TABLE 2: AGRICULTURE‘S SHARE OF GDP AND CONTRIBUTION TO OVERALL GROWTH(2004-2006) . 33 TABLE 3: GROWTH IN INDUSTRY (2003-2006) ................................................................. 35 TABLE 4: INDUSTRY‘S SHARE OF GDP AND CONTRIBUTION TO OVERALL GDP GROWTH (2004- 2006) ............................................................................................................ 35 TABLE 5: GROWTH IN SERVICES (2003-2006) .................................................................
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