Ao 53/
BUDGET STATEMENT
for
Hon. J. H. MENSAH, m.p. Minister ofFinance
MINISTRY OF FINANCE
27th July, 1971
BUDGET STATEMENT FOR 1971/72
/ * The Rt. Hon. Dr. K. A. Busia Prime Minister of Ghana
CONTENTS
Page Introduction iü
Section I—Development Plans and Policies ...... 1 The of Wealth Growth and Income .. 2 Development of Social Services and the Physical Infrastruc¬ ture 5 The Development Effort of Government 8 Agriculture, Forestry and Fishing 10 Industry based on Raw Materials from Ghanaian Agriculture 12 Capital and Enterprise in Agriculture 13
Other Industrial Sectors ...... 14 Employment 15
Section II—Balance of Payments 19
External Debt 21 Import Policies 1971/72 22
Export Promotion . .. .. 23
Import Saving ...... 25 Importation of Cars 26
Section III—The Budgets of 1970/71 and 1971/72 .. .. 27 The 1970/71 Budget 27
The 1971/72 Budget .. 28
Highlights of the Expenditure Programme for 1971/72 .. 32
(a) Education ...... 33 (b) Health 34
(c) Transport ...... 35
(cf) Food Production ...... 37
(ie) Cocoa .. .. 38 (/) Water Supplies 39 Wages and Salaries 41
(а) Measures to reduce income disparities .. .. 41
(б) Raising the Real Income of Lower-paid Workers .. 42
Development Programme below-the-line ...... 44
ï Contents—cortd.
Page Section IV—Monetary Policy 48
Section V—Revenue Proposals ' '.. .. ' '., ' .. ... 50
: 55 Import Taxes .. ,' ... .. Taxes on Other Uses of Foreign Exchange ;■ 57 58 Vehicle Licences ... ■ • •• National 59 Development Levy ...... J ..
Conclusion ...... 59
TABLES ,
2 1. Expenditure on Gross National Product, 1960/70 .. 2. Cost of Living Indices—March, 1963 4 6 3. Output of Educational Institutions by Levels .. 4. Government Expenditure—Functional Classification 8 '5. Recorded Number of Employees and Placements through the Employment Agencies, 1960/70 17 6. Percentage Increase/Decrease of Recorded Employment by Industrial Sectors 18 19 7; Non-cocoa Domestic Exports ...... 8. Imports by End-use Categories 1968/69-1970/71 20 ;9. Analysis of Long-term Aid Loans 1966/70 31 10. Feeder Roads Construction 36 Í1. Water Budget 1968/72—Pipe-borne Water Supplies 40 12. Government Finance 1969/70-1971/72 (existing rates) 51 13. Government Finance 1970/71-1971-72 53 14. Import Analysis—October, 1969 to March, 1971 56
APPENDICES 64 I. Road Projects ...... 68 IT. Water Projects ......
ii INTRODUCTION
We can look back upon the year which has passed since I presented the last Budget with some satisfaction. The larger problems of the country, of the health of its economy and the quality of its life, to which I will presently be addressing myself in greater detail, have not indeed been solved. But we can be grateful that for the most part things have got better and continue to get better. Our most fundamentai need as human beings is the need for food. Last year's harvest had been cut short by drought wnich set in at the turn of the year. This year's crops as they have begun to come in seem to be turning out very satisfactorily. If the elements continue to be favourable to us, and if the measures that we as a people and a government are taking to secure more ample food supplies are successful, then we can look forward to a period of stable and easy conditions in this most fundamental aspect of life against the background of which progress in other aspects can be pursued.
Last year we carried out a programme of trade liberalisation. Our people were able to take advantage of this to buy most of the things which they need and want but of which they had perforce been denied for so long. The Christmas which we spent last December with goods once more in abundant supply in the shops, in the markets and on the side¬ walks, was a period of material satisfaction such as Ghanaians had not seen for many years. Unfortunately, in our present economic circum¬ stances, such periods of feasting and plenty have to remain limited to a few days each year. For the rest of each year we have to live with the daunting task of nation building to which we have set our hands and with the hardships that go with it.
The welfare of the ordinary Ghanaian has recently begun to be threatened once more by shortages of food leading to high prices. The information available suggests that our army of unemployed remains inhumanly large. Our external trade has once more come under" pressure and has to be protected by extraordinary measures which will inevitably hurt. The budget proposals which I am presenting to you have to deal principally with these emerging or chronic problems—of inadequate and insecure food supplies, of unemployment and of a threatening dislocation in the balance of payments.
But the background against which we have to tackle these problems does not warrant an attitude of despair. On the contrary, the continued atmosphere of freedom and reasonable social harmony which we have been able to maintain forms our most important asset in facing the future. Our freedom to believe what we want, to associate with whom we want, to pursue our private economic interests within the framework of the law; our freedom from arbitrary rule and therefore our freedom from fear—these are the most important attributes that a society must have if the energies of the people, their ingenuity and their enterprise in
iii the pursuit of the well-being of their own families, the sum total of Which constitutes the well-beingof the nation, are to come to their full flowering. These freedoms we have. Because of.them we can believe in our destiny.
At some stages during the past year the country was threatened by an"unacceptable degree of social upheaval and tension. The atmosphere of industrial peace, which is so necessary if we are to concentrate our energies and to mobilize our own and other people's capital to solve our problems, was threatened too frequently. It is heartening that the leader¬ ship of the Trade Unions Movement has adopted an attitude of high social responsibility and is helping to ensure that the many problems and conflicts in industrial relations which must inevitably arise from time to time will be resolved in a rational manner and a calm atmosphere. I will comment on some specific problems of wages and salaries in the course of my address. At this stage I will only say that when workers and their employers sit down to resolve their problems, they should always remember that the third party to their discussions, an unseen but a very important third' party, is the community as a whole. Above all, it is the army of unemployed. Nothing must be done to impair the capacity of this country, small as it is, to give jobs to more and more of these unemployed Ghanaians.
For the Government itself 1970/71 has been a successful year Revenues have been buoyant. National development, which is the sole reason for the levying of taxes on the people, is being carried out at a rising tempo. The Government has continued to devise bold and imagina¬ tive departures in public policy for the acceleration of national progress. And we have continued to enjoy the loyal support of our public servants in-carrying out our policies.
Nation building is not a matter solely, or even predominantly, for Governments. It is a co-operative effort both in the actual construction of a hew nation and in the harnessing of the resources of human energy, money and physical assets. The Government has to offer leadership by showing the most profitable path forward, and bringing out in each of us the maximum willingness to work hard and to sacrifice for ourselves and for our community. Thé year ahead is going to be a difficult year— through no fault of our own. Government has to ask the people for sacrifices. I hope that our response will be worthy of a nation which has faith in its destiny.
Hon. J. H. MENSAH Minister of Finance Section I
DEVELOPMENT PLANS AND POLICIES
1. Since last year work has proceeded on the preparation of à comprehensive National Development Plan which will guide our actions within a consistent and logical framework during the life of the present Government. The leading ideas that have informed our thinking and will continue to dominate the policies and planning of the Progress Party Government are well known to you. They derive from the under¬ takings which we gave to the people of Ghana in seeking their mandate two years ago to serve as their Government.
' 2. These commitments have been further elaborated in^the light of more detailed facts and figures which have been presented to us since coming into office. Both our first budget, which we presented last August, and the present budget are based upon the policy conclusions which we have reached in the light of this information concerning the methods, the resources and the timing of our actions for the attainment of our stated objectives. Since last year we have been engaged in con¬ sultations, within and outside the Government, which are necessary for the elaboration of a National Development Plan that will command wide national support and will thereiore stand the best chance of successful implementation. In particular, Regional Planning Committees have been established one after the other while consultations have been going on at the national level on those problems that are peculiar to various sectors of the economy as well as on questions of more general concern. It is hoped this process will be completed in the present financial year, when a fully developed plan will be submitted for the approval of Parliament.
3. It might be useful for me at this stage to tell the nation a little bit about the background facts from which our Planning must start, the major problems which we expect to encounter, and some of the tentative ideas for solution which may now be envisaged. Everybody is familiar by now with the story which constitutes the economic history of Ghana in the fifteen years since independence: the bright promise of our begin¬ nings that gave way to bustling but confused and incompetent action, followed by economic upheaval and recession. Let me emphasise that the promise is still there. The natural resources of this country, and even more important, the human material, are fully adequate to support the development of a modern economy. But it is quite obvious that without careful planning and expert management, much time and energy can be spent in doing irrelevant or even wrong things, and that incom¬ petent management can create problems much more serious than those that arise from the natural environment itself. In the early 1960s we set out to build a modernised and industrialised economy; an economy that would provide employment opportunities at decent levels of wages for all the working people, a country where food would be plentiful and the cost of living cheap, where housing, education, health and other social services would be available to all; a proud independent Ghana with an industrial and agricultural economy supplied with a good infra¬ structure and able to support this high level of inaividual welfare and community services. The Growth of Wealth and Income 4. Ghana's infrastructure, as extensive as could be found in any African country, formed the basis on which economic development was to. take place. The social services had to be paid for. All those people who had been put througn a formal education and in the process had been dislodged from the rural or self-employed economy had to find jobs .with which to support the high level of living now demanded by them. It-is obvious that the pay-off on all these assets has been poor. The average production of wealth per inhabitant in Ghana, which should have been among the fastest-growing in the developing countries, was instead actually on the decline over the decade as a whole.
. Over 5. the period 1960-65, gross domestic product in real terms . grew at an annual compound rate of 3.2 per cent. With population grow¬ ing at about 2.7 per cent, the real increase in per capita income levels - was only 0.5 per cent per year. And in fact most of the growth that did occur was experienced in the early part of the decade. Per capita income levels, measured in 1960 prices, reached NJZT45 in 1962, remained static for the subsequent two years and actually declined in 1965 to Nf£142. Thus by the middle of the decade, the real output of wealth per head of our population was only NfZT.OO higher than in 1960 despite five years of apparent concentration on national development. '
Table i EXPENDITURE ON GROSS NATIONAL PRODUCT: 1960/70
. . (At constant 1960 prices; NC millions)
Item 1960 1965 1966 1967 1968 1969 1970*
1. Private consumption expenditure 694 722 689 . 724 757 797 825 2. Generalgovernmentconsuniption 96 165 172 193 213 226 254 3. Gross domestic fixed capital
formation .. . .. 194 250 207 154 142 155 160
4. Changes in stocks .. .. +22 -9 +16 +7 — +11 +25
_5. Domestic expenditure .. .. 1,006 1,128 1,084 1*078 1,112 1,189 1,264 6. Exports of goods and non-factor
services ...... 246 334 306 288 288 277 289 7. Imports of goods and non-factor services -296 -350 -211 -233 -251 -268 -305 8. Expenditure on gross domestic
product .. 956 1,122 1,113 1,133 1,149 1,198 1,248 9. Net factor incomes from abroad ' -10 -19 -14 -17 -29 -32 -35
Í0. Expenditure on gross national . ' product ...... 946 1,093 1,099 1,116 1,120 1,166 1,213 11. Per capita gross national product (NC) 141 142 138 137. 134 136 138 12. Rate of growth in gross national product (present) ... .. 2.9't 0.5 1.5 0.4 4.1 4.0
Note: (*) Provisional (Í) For period 1960-65 Source: Based on C.B.S. data. 2 6. The period 1966 to 1968 had perforce to be dedicated to reducing the inflationary pressures in the economy, restoring a semblance of order into public finance, and containing the balance of payments situation. During this time gross domestic product grew at only 1.6 per cent per annum, leading to a further decline in real per capita income. While final data for 1970 are not yet available, the growth rate since 1968 appears to have been in the range of 3.5 to 4.0 per cent per annum. Although this is still low, it marks an acceleration of the tempo of growth and it shows that in the last two years income per capita has been rising. 7. This cycle in. the development of the economy has been reflected in the employment situation. From the available data it appears that such employment:rose by 3.5 per cent per annum during the first half of the decade and by 3.6 per cent per annum in the latter half. The average number of recorded employees in all sectors was 365,000 over the period 1960/65 and 386,000 over the period -1966/70—an increase of 5.6 per cent. By far the largest increase was in the number of employees recorded for manufacturing industry, this increased by 5.8 per cent per annum during the period 1960/65 and by over-12 per cent per annum since then. While the proportion of the .total labour force in-Ghana which is employed in the manufacturing sector remains small, it has doubled over the decade so that by 1970 manufacturing employment constituted nearly 14 per cent of all recorded employment. 8. During the period 1964/65, when the fire; of inflation was raging beyond the control of the Government, the index of consumer prices rose by 26.4 per cent. The prices of locally produced food items, which account for some 52.0 per cent of the monthly expenditure of the man in the street, increased by 37.4 per cent. By contrast, during the last four years, 1966/70, the total consumer price index rose at an annual rate of 2.5 per cent and the pricés of locally produced food only rose by 1.4 per cent. More recent data indicate an acceleration in the rise of prices. The price index rose by 6 per cent during January to April 1971, com¬ pared to the first four months of 1970, and the local food component by 8.3 per cent. The period òf relatively stable prices under the N.L.C. had been achieved at the expense of national development, through retrenchment and devaluation. Once we embarked on a period of accelerated development, to, put more people :to work and spend more money on constructing facilities for the people, the supply of goods, food in particular^ did not increase fast enough to absorb the money that came into circulation, so prices began to rise again. This illustrates the basic weakness; in our economy which all public policy miist attempt to remove, because we simply have to resume, national development to provide more jobs for pur able-bodied young men and women.
3 Miscella¬ neous 103.5 107.9 117.8 131.8 139.9 151.5 153.6 ' 155.2
Rent 100.1 100.8 101.5 102.0 102.0 102.6 102.9 103.0
Durable Goods. 109.0 134.8 154.2 166.1 188.1 192.1 189.7 102.6. Transport- Communi¬ cation 100.6 104.2 117.9 127.8 124.8 124.1 130.8 137.9
Health and Hygiene 103.2 113.8 121.6 142.5 145.6 163.3 169.0 170.9
Clothing 105.8 120.6 140.6 148.1 153.3 .168.2 181.9 186.8
Fuel and Light Table2í 105.2 114.5 131.5 154.0 147.0 153.8 165.0 172.7 (URBANANDAREAS)RURAL Drink and Tobacco 103.6 108.1 122.6 137.9 137.9 139.9 142.6 145.8 COSTOF LIVING Food INDICES,MARCH1963100= Imported 105.8 117.5 128.8 130.3 132.3 148.3 151.7 150.1 Local Food 112.0 125.7 172.7 199.0 169.4 184.3 200.1 210.0
Total 119.7 151.3 157.0 181.8
108.2.. 171.4.. 169.7.. 188.8.. ♦Averageteaofmonths CentralSource:Bureauof 1963* 1964.. 1965.. 1966.. 1967. 1968. 1969. 1970. (March-December). Statistics. 9. The explanation for this weakness is that during the wasted years investment in agriculture and industry either did not take place, or took place in the wrong things, or was not managed well enough to yield the returns that could be expected.
Development of Social Services and the Physical Infrastructure 10. In the course of the decade of the 1960s much attention and money was, devoted to creating in Ghana the physical infrastructure of a modern economy and installing welfare services along lines that were considered consistent with enlightened social policy. The most spectacular development was in the field of education, where within six years the enrolment in the public institutions had multiplied by more than twor and-a-half times. By 1970 more than twice as many students were coming out of middle schools as had done ten years before. The output of secondary schools had risen fifteenfold, and in the universities the increase was more than fivefold.
11. While the sheer numbers hide a certain crisis in the relevance and the quality of education that has now come to the fore among the concerns of Government, there is no doubt that this country has built up a labour force which, measured in terms of its educational attainments alone, has the potential of achieving a high level of economic produc¬ tivity.
ï
5 1970 67,655 7,800 1,367 9,167 4,811 .1,072 1,082
*• 946 1969 62,857 7,157 1,328 8,485 3,894 1,129
709 1968 . 60,235 6,207 1,189 7,396 5,846 ' 801
784 1967 53,961 6,370 1,042 7,412 3,634 .652
880 664 692 1966 51,266 4,946 5;826 3,975
796 617 1965 49,654 3Í984 4,780 2,554 .598
588 3,708 541 320 1964 42,052 3,120 1,899
665 358 309 1963 40,426 2,639 3,304 1,583
Table3 224 383 n.a. 1962 38,747 2,224 2,607 2,678
207 1961 34,063 1,852 414 2,266 2,480 n.a.
439 566 n.a. 205 1960 28,555 1,727 2,300 OUTPUTOFEDUCATIONALINSTITUTIONSLEVELSBY
Middle Secondary/G.C.E.Level'O' .. CertificateHigher TotalSecondary TeacherTraining Technical Universities 12; At the present time approximately one-third-of the population of Ghana is supplied with pipe-borne water, the production of which was doubled in the last ten years. 16 per cent of the population also has access to electric power. The medical infrastructure comprises 122 hospitals with a little under 10,000 beds; 50 health centrés and 12 health posts in operation,'with another 66 now under construction and 11 more health centres planned for construction starting in this financial year; two major regional hospitals which are due to be commenced during this financial year, and two more, already under construction, which will be completed and brought into use.
13. One characteristic .which is common to all these social services is the. highly uneven distribution over the different parts of the country. Nearly 60 per cent of the clean water supplies is produced for Accra alone, while the Volta, Brong-Ahafo, Northern and Upper Regions all put together receive only 10 per cent of the national total. Again, whereas residents in all the large cities have per capita supplies of water which are comparable to the quantities that are expected to be made available even in wealthy countries, residents of towns with less than 20,000 inhabitants have only 10 per cent of their requirements supplied at the present time." And as for the people who live in the really small towns and villages, only since the new departure in water supply policy was adopted in the "Water Budget" of 1968/69 have their needs formed an important part of the concern of Government. In spite of the vast increase that has occurred since the commissioning of the Volta River Project, electricity supplies have been geared to supply a very narrow section of the popu¬ lation, and even of the economy. The whole concept of supplying electri¬ city to the farming communities. has only recently been adopted with the inauguration of the Rural Electrification programme of the Progress Party Government.
14. Nearly one-half of the total number of hospitals in the country is located in Accra-Tema, Kumasi and Sekondi-Takoradi, and they provide these three cities with 42 per cent of the hospital beds in the entire country. Sanitation and drainage, which are an essential element in public health along with good drinking water, have similarly only been providedin a systematic way in the urban centres.
15. In the aggregate, the expendituies of Government on the social services in 1970-71 were running at N012O million, which was twice the level at the beginning of the decade. It is within this increased level of expenditure that our Government has been making room both to continue the development of these services in the urban areas and, with even greater emphasis, to bridge as rapidly as we can the intolerable disparities between the rural areas and the urban areas. 16. The supply of the physical infrastructure for communications also-increased rapidly during the 1960s. By 1970 there were .19,000 tele¬ phone lines, whereas at the beginning of the decade the telephone services only had one-third of that number of lines. The mileage of.all-weather roads increased by approximately one-third, to 2,500 miles..,
7 17. Owing to the failure to carry out the requisite maintenance and renewal, both the road and rail networks had by th? end of the decade become barely able to cope with the volume of traffic. A major effort at roads rehabilitations and re-equipment of the railways has only gone into operation in the last three years. The Development Effort of Government 18. Taking together the expenditure proposals for the ordinary development budget which will be financed above-the-line and the con¬ tributions of equity or loan capital to various concerns and enterprises which will be financed below-the-line, Government's development programme in the present financial year 1971/72 will total about NJ£200 million. Last year, the comparable total of Government's budgeted capital investments came to about NC160 million. Even considering the above- the-line development programme alone, Government is proposing the adoption of a development budget which is the largest that has ever been attempted in the history of Ghana. 19. During thv debate on last year's budget, the then Leader of the Opposition described the Government's development programme as "excessive" in relation to previous expenditures. The facts all point in the opposite direction: they explain why our friends on the other side have so consistently failed to formulate any credible alternatives to the national development policies of the Progress Party Government. The data which I have supplied to the House show quite clearly that whereas in the four years between 1966 and 1969 Government's recurrent expenditures in current prices increased by 50 per cent over the level of'the previous four years, expenditures .on development were more than 40 per cent lower. Even among the recurrent expenditures, the outlays for the pro¬ vision of economic and community services (e.g. agriculture, transport, roads and water supply) were either stagnant or actually reduced. The increase was accounted for by the general services (e.g. administration, defence and police), by the social services and by public debt charges. The massive reductions in capital expenditure occurred Li the economic services (down 61.5 per cent) and the social services (down 36.6 per cent),
Table 4 GOVERNMENT EXPENDITURE—FUNCTIONAL CLASSIFICATION
~~~ 1961/65 1966/69 %~~ (4 years) (4 years) increase (N£ millions) A. Recurrent Expenditure 1. General sèrvicès 211.8 355.2 67.7 2. Community services 52.1 50.2 -3.6 3. Social services 262.2 409.9 56.3
4. Economic services . '. 124.5 141.1 13.3
. 5. Unallocable expenditures 51.0 107.6 110.9 Total 701.6 1,064.0 5ÏÏ6 8 Table 4—cóntd.
1961/65 1966/69 % (A years) (4 years) increase
(N0 millions)
B. Capital Expenditure -22.6 1. General services 58.6 45.4 . 2. 51.0 55.3 Community services . +8.4 3. Social services 72.0 45.7 -36.6 4. Economic services 265.0 102.1 -61.5 5. Unallocable expenditures 5.5 7.8 +41.8
Total 452.1 256.3 -43.4
Grand Total 1,153.7 1,320.3 +14.4
20. One qualification, which should be carefully observed, mate¬ rially affects the interpretation that we give to this data. This qualifi¬ cation relates to prices. Prices were about 40 per cent higher in the period 1966 to 1969 than they had been in the preceding four years. In other words, it required almost the.whole of the 50 per cent increase in recurrent expenditure just to keep the physical level of these services unchanged. Considering that some of the additional expenditure went to debt service
" charges which do not provide any services to the people and that the population has continued to grow, we are driven to the conclusion that the provisions made in recent years for social services and especially for economic and community services have fallen rapidly behind the needs for these services. We who are now charged with the responsibility of govern¬ ment.owe a staggering backlog of arrears to the people of Ghana.
21. For this reason, the development of the social services cannot be allowed to flag. Nor can continued low level of support to the economic services be regarded as a rational policy for the 1970s. We must work, sacrifice and plan for a new period of advance in the levels of living of our people. And that means that the rate of expenditure for the development of public services must be rapidly increased to go with this higher level of living. 22. I have tried to quantify the levels of social and physical develop¬ ment, and the pervasive inter-regional disparties which formed the starting point for deciding upon tne policies that our Government must pursue in the field of National Development. The deficiencies which are evident in development policy as it has affected the rural areas cannot be made good except by a sustained effort stretching over many years. Even in the urban areas pressures on housing and transport, on health services and educational facilities all indicate the need for resuming national development on a massive scale.
9 23. The three years of standstill :betweeti 1966 and 1969 were forced upon the N.L.C. Government by the economic dislocation which was caused by poor development policies in the preceding years. The N.L.C. has however left to our Government a heritage of relatively stable economic conditions. They did not leave us a vast treasury. But they left us a nation expecting the resumption of progress and united in its deter¬ mination to achieve progress. The leadership required of government is to show to the people that the efforts necessary to pay for such progress are worthwhile. I am sure the outline of some of the specific development programmes proposed for the present financial year which I will present to you today, and the further details which will be unfolded by my col¬ leagues in the following weeks, will persuade the nation that its taxes are being employed judiciously and effectively. Citizens in all parts of the country can therefore hope with good reason that, if the development effort is sustained, eventually their own communities will also benefit from the provision of modern amenities and from government support for their individual agricultural and other enterprises. It would be denying the destiny of a nation, and especially unfair of those of us who already enjoy these facilities, to call a halt in a difficult year like this one when it is our turn to make big sacrifices in order to keep up the tempo of national development. 24. But let me return to my acconnt of the development of Ghana and the present state of the nation which form the background to our plans and policies. If indeed Ghana achieved so much in social develop¬ ment during the 1960s, then why is the economv so precarious? Why are we threatened with inflation as soon as we attempt to resume national development at a high tempo? Why is food so dear? And why are so many Ghanaians still unemployed?
Agriculture, Forestry and Fishing 25. A lot of -money was spent on agriculture during the last ten years, mostly in areas that cannot be regarded as ill-chosen. But the form of much of this expenditure, for instance in the excessive acquisi¬ tion of heavy agricultural equipment, or in the payment of millions of cédis to large masses of urban-oriented youngsters with no skill and little leadership who were nominally recruited into the agricultural labour force, was not wisely chosen. Government-owned farms covering thousands of acres, which were well supplied with equipment, labour and fertilisers, were managed at a level of productivity which was poor beyond belief. After all the hustle and bustle and the expenditure of millions of cedis on agriculture we still.cannot feed million Ghanaians, even at our miserable level of nutrition, on a land area of 90,000 square miles.
26. The experience of a decade of frustration indicates the outline of a new programme for national development, although it is necessary to guard against relapsing into a policy of simple reaction. First, the development^ plan ought to tackle the task of consolidating the economic foundations Of the country, of building a basically secure economic system. The lesson of world, history is that whatever the,
10 undoubted benefits of international trade and specialisation, each participating nation which has to run an independent economic policy has to start off from a solid and secure base. Indeed without such a base no independent nation can be a useful partner in the international economic system. For Ghana the fundamentals of economic security consist in assuring an adequate degree of self-sufficiency in the elemen¬ tary task of feeding the population. At this stage of our economic development we do not possess the industrial and technical capability to be able to feed the population primarily through a reliance on imports. 27. We have been taken by surprise by the evolution of the demo¬ graphic and economic pattern of the country. When the rate of urbanisation was accelerated in the early 1950s and demand for locally produced food could no longer be adequately met out of the unplanned surpluses from a peasant agrarian economy, the administrative and technical organs of the state were not ready to promote the scale of modernized commercial farming that was required to meet the new demands. We have started the 1970s with a substantial deficit in food supply. In the first six months after the last budget Ghana spent NJZ41 million on the importation of food items, including nearly NJ27 million on meat, NJZ7£ million each on fish and sugar and NJ25 million on rice; and that represents an annual expenditure of more than N£80 million on food imports, of which at least one-half could be saved by a vigorous policy to promote domestic food production. 28. Imports of food are an imperfect index of the task that has to be accomplished in food production. The ever-rising cost of food, led by the domestically produced foods is a clear indicator of the continuing shortage of food supply in relation to demand. And this has been characteristic both of those food items that do not enter into Ghana's international trade, such as maize, yams and plantains, and those that do enter international trade. In pursuing the objective of greater self- reliance in food production, the development plan will propose areas of concentration for the human and financial resources that the country can deploy towards achieving our target. 29. The search for agricultural modernisation cannot be realistically pursued through the indiscriminate importation of equipment in the hope that workers and managers will automatically and economically embrace new agricultural technology. A more rational approach, adapting known and successful plants and agricultural techniques to Ghanaian conditions and environment, has to be followed in order to avoid wasted effort. Certainly an approach that favours the importation of expensive foreign machinery, which progressively reduces employ¬ ment opportunities in the hope of thereby jumping across the technolo¬ gical gap, is bound to be uneconomical with our present scarcity of foreign exchange. Fortunately, enough experience and research results have been accumulated in the last 20 years to serve as a guide towards the choice of strategies. By applying this accumulated knowledge, we confidently expect that during the period of the plan it will be possible to achieve a decisive break-through in the production of maize, rice, sugar, and basic vegetables to supply the needs of the urban population.
.11 Specific targets of expanded acreages and of increased yields and output have been worked out. The exact locations for these developments are being selected. This will be followed by the identification and recruitment of the individual promising farmers who, with the assistance of selected seed, fertiliser, farm credit, assured marketing and, in some cases, irrigation, will actually translate the plan into reality.
Industry based on Raw Materials from Ghanaian Agriculture 30. The. choice of industries to be developed in Ghana during the coming four years must similarly be dictated by the possibility of deve¬ loping locally the raw material or other base which will assure the maxi¬ mum contribution of such industries to national development. Based on the fields in which a beginning has already been made, we can see the need to promote the cultivation of tomatoes, citrus and pineapples for processing. Even more important is the need to bring to a successful conclusion the efforts that have been made over the past six years to establish a sugar industry to satisfy the rapidly growing needs of the Ghana market. This is an industry in which Ghana now suffers unneces¬ sarily both from the shortage of locally produced raw materials in relation to the existing processing capacity and further from the insufficiency of this existing capacity in relation to present and foreseeable demand. 31. Some other major industries such as soap and textiles continue to subsist on imported raw materials that could be locally produced, and these form the next area of concentration. It is quite clear that by 1975 we should have largely eliminated imports of raw cotton and of cotton textiles, which together cost us more than N£20 million in foreign exchange last year. In fact, Ghana's textile industry has export potential when viewed within a regional context. Arrangements are therefore being made to free it of some the present restrictions on its capacity to export. Agreement has been reached since the last budget for the Govern¬ ment to co-operate with private interests in the soap industry to extend its capacity and to supply its entire requirements for oil from local sources. It should be possible, on the basis of developments during the plan period, to eliminate the present imports of oil and tallow within two years from the end of the plan period. There is reason to hope that the World Bank will assist in the projects. An interesting opportunity exists for rubber. Ghana's young industry will produce an exportable surplus of crude rubber during the plan period. All the evidence suggests that this initial success can be built on. Rubber production in Ghana is one of these few instances where the production of an agricultural raw material has been fairly well synchronised with the development of the processing facility, and so the industry also has the chance to export both the raw materials and rubber-based industrial products including tyres. The trend towards self-sufficiency in the supply of tobacco for the requirements of the nation was disrupted in the mid-1960s. But the experience gained before then makes it quite certain that tobacco production represents a most feasible line of development. 32. The fibre bag industry in Ghana was developed on the assump* tion that there were good prospects for backward integration into the
12 local production of kenaf. Although experience in the 1960s was not extensive enough to form -the basis of any certain forecast, the general evidence from countries similarly situated would suggest that this pro¬ gramme should succeed. Finally, mention should be made of local raw materials for the paper industry. The stage of economic development already reached in Ghana entails the consumption of quantities of paper and paper products that now require the expenditure of N£12 million in foreign exchange every year. There is enough evidence that Ghana can produce pulping species of timber to justify a serious attempt during the plan period to save foreign exchange previously spent on paper and paper products. While quick-growing species of such pulping timbers will be planted, the gestation period is still so long that substantial benefits will only begin to accrue after this plan period. However, by the very nature of the industry, the longer a decision is postponed, the more serious will be the deficiency as the economy develops. Capital and Enterprise in Agriculture 33. It has been obvious that the development of managerial and technical competence in agriculture has been left far behind in the process of Ghana's economic development. Whereas Ghanaians have been educated in the most modern techniques in industrial and commercial management, in science and in the professions, the managerial cadre in agriculture has consisted almost exclusively of an illiterate, poor and progressively ageing group of village dwellers. They have been supported with no capital from the outside, and except for those crops where there were overseas consumer interests, with no organised modern agricultural marketing. After many tottering starts a beginning has now been made in raising the managerial level in agriculture. Even before the "Farmers Budget" of 1969/70, the relative price level of food and agricultural raw materials had already made it profitable for some of the more far-seeing members of the educated classes to venture into farming. Since then a quiet revolution has been taking place which, if pursued and supported, will surely transform the agricultural economy of Ghana within a few years. Both as cause and effect, the entry of more farm managers and proprietors with training and contacts from the urban sector into the previously isolated rural sector has been accompanied by the entry of more capital for agricultural development. 34. The existing deficiencies in agricultural production in Ghana, coupled with the magnitude of the balance-of-payments problem, make it necessary to supplement this steady evolution with measures which would lead to a more rapid break-through. There is evidence of consider¬ able interest by foreign management and capital in Ghana's agricultural development. Considering the long-term social needs of the country, it is obvious that the participation of such foreign capital and managerial skill must be introduced under controlled conditions. At the same time, especially in view of the technical and complex legal problems associated with land in some parts of this country and the social complications that foreign farming enterprises could encounter, the most convenient arrange¬ ment for all concerned will be for Government to interpose itself between such potential foreign agricultural enterprises and Ghanaian society.
13 Fortunately, existing law and practice make it very easy for Government to cut through the legal problems associated with assembling the large packets of land-holding that will be required to support modern agricul¬ tural enterprise. .w!..: .. 35. It has therefore been decided that Government will acquire land for sub-leasing to both Ghanaian and non-Ghanaian enterprises interested in farming. The Constitution of this country limits foreign holdings of Ghanaian land to 50-year leases, albeit with the possibility of renewal. In most agricultural enterprises, even including plantation crops such as rubber, this provides more than ample time for the recovery of capital investments with a reasonable margin of profit. Government will accordingly provide for the land acquisition and lease arrangements which approved agricultural enterprises-will require. Applications for such assistance will be processed through the Capital Investment Board, to which all enquiries should be addressed. 36. The experience of the last decade indicates clearly that the most important factor in modernizing Ghana's agriculture is competent management. At the present time the financial institutions that stand ready to provide capital for agricultural development have command of much more capital for loan and equity participation than there is demand. Hence competently managed enterprises, both Ghanaian and foreign, will be offered ample amounts«of capital in various forms. The only requirement will be the normal commercial one, namely that the produc¬ tive potential of the project and the competence of its management will enable it to earn an acceptable rate of return on the invested capital. 37. I would like to emphasize that the Government welcomes the contribution of capital and especially of managerial skill from all those capable of participating in the agricultural revolution for which the forth¬ coming National Development Plan must provide.
38. Lest our policy be misunderstood, let me also emphasize that the development plan will not propose the substitution of large-scale for small-scale farming or of foreign-controlled for Ghanaian-owned farms. We are saying that a maximum welcome awaits all those who come to assist with the implementation of our agricultural plan. Every successful farming economy comprises many types and sizes of farms and farmers—some big, some small, some backward, some progressive, livestock farms, arable farms, irrigated farms. There is no reason to think that Ghana's agriculture can be successfully transformed if we do not develop, as a complement to our small peasant farms, many other layers of sizes and types of farm. And above all it is our firm intention that farming should become a more dynamic source of employment, including wage employment, than it has been in the 1960s.
Other Industrial Sectors
39. The lesson of the past decade is that the most successful and socially profitable areas of industrial development in Ghana will be those closely related to the raw material base available in the country.
14 On present knowledge, the most promising prospects outside the agriculture-based industries relate to cement, salt-based chemicals, bauxite and aluminium, silicon and clays, and petro-chemicals. With iegard to cement, a number of competing proposals have already been received for the exploitation of the limestone deposits at Nauli which are at present the most promising. It is our firm intention to exploit these deposits during the period of the five-year plan. The Government also intends that the development of the Nauli limestone deposits should go hand in hand with the participation of Ghana in the establishment of an integrated clinker-cement industry for the countries in this middle part of the West African coast. 40. Arrangements have already been reached with the Kaiser Group of Companies and their associates, with the Engineering Inter¬ national Company and their partners, and with the Japanese for the prospecting of Ghana's major bauxite deposits at Kibi and Nyinahin as a prelude to their exploitation for the production of bauxite and. alumina. Government has clearly indicated its intention to lead in the formation of the consortia that must necessarily be formed for the exploitation of both of the main bauxite deposits. During the next IS. months we expect to discuss with our prospective overseas partners concrete proposals for the development of bauxite fields. With regard to the Nyinahin deposits, Government is also committed to honour the undertaking that the Aluminium Company of Canada (Alcan) will be given an opportunity to participate in any project for the exploitation of those deposits in the Nyinahin area over which that company holds concession rights. The time-table that Government has set for developing this industry entails a rigid commitment to ensure that a bauxite-alumina project will actually be in production before the, mandate of the present Government ends in 1974/75.
Employment
41. Let me return to my theme that Ghana had built up a satisfac¬ tory social and physical infrastructure during the 1960s, but had failed to use the opportunity to increase agricultural production. This failure had resulted in the situation that the country, in terms of welfare services and public services which have to be maintained, was living like a retired gentleman who is no longer able to support his wonted standard of living. As happens in such situations, we resorted to massive borrowing and to depletion of our capital assets.
42. Industrial production, starting as it did from a low base, did indeed show absolute and proportionate increases that were moderately high. The gross output of industry in real terms continued to grow at approximately 10 per cent per annum during the earlier years of the decade and by as much as 15 per cent per annum in the second half. This latter record of growth was achieved in a period when, broadly speaking, investment in new industry was at a standstill. It was achieved by a more rational and intensive utilisation of the industrial capacity that had been built but not fully utilised in the early 1960s. Owing to the extreme dependence of our industry on imported raw materials, which
15 I will presently discuss in more detail, the growth of local incomes which was associated with this industrial performance' was much less impressive. Local value added—that is, the wages earned by Ghanaian labour and other incomes accruing to Ghanaians in the process of the industrial production—has only increased at a rate of 10 per cent per annum in the period since 1966, a rate only two-thirds that of the growth of industrial production as a whole.
A3. The mirror im?ge of our disappointing performance in the field of production, compared with the development of social and infra¬ structure services, is to be seen in the data we have assembled on employ¬ ment during the decade. It is of course notoriously difficult to speak with great certainty about trends in employment since the lack of reliable data is more serious on this subject than on any other aspect of the economy. The numbers of those workers on whom' we have records grew at a ráte of 2 per cent per year between 1961 and 1970. In the first half of the decade till 1965, the growth rate was 2.7 per cent per annum. This fell.to 1.0 per cent per annum between 1965 and 1970, which covers the period of stabilisation and retrenchment. During the decade, as last year's census indicates, the population in major urban centres, whose employment conditions are the ones- that are most closely reflected by the available data, was growing at a rate of over 5 per cent per annum. In.other. words, .the so-called modern.sector of the economy was failing persistently to provide'employment for the available labour force in urban areas. According to some of the best estimates, the unemployed by last year numbered 220,000. It is towards ameliorating the conditions of these nearly one-quarter of a million Ghanaians that the economic policy of this budget, and of the National Development Plan, will be principally directed."
16 1970 416,847 48,842 .24,657 56,575 17,642 59,191 36,646 .27,205 1969 400,814 46,516 25,955 52,874 17,642 57,467 35,930 29,571 146,086134,859 1968 391,261 47,536 26,236 44,849 16,023 54,783 36,913 36,374 128,547
1967 43,659 41,155 14,381 47,790 29,962 361,35! 26,299: 35,482■ 122,477 1966 361,502 49,243 25,548 35,820 14,030 46,475 -35,482 32,537 122,367 1965 395,811 56,077 26,738 32,485 14,033 72,932 33,957 30,436 129,153
— 1964 386,860 50,698 27,258 34,767 14,414 •46,200 27,245 121,748 1963 46,330 29,861 32,364 14,969 558,551 37,293 32,733 1962 374,086356,215 38,791 28,728 30,358 15,912 61,200 39,244 32,605 121,985109,377 93,941 1961 48,046 28,466 29,310 15,735 63,259 37,686 33,498
1960 • . 332,898 57,687 29,083 14,263 61,773 31,136 31,180 83,687 57,22837,431 . 45,132 Table;5- 349,932 24,145 62,79062,189^65,15458,45489,02867,388;76,26357,913-
Numbersatas RECORDED December tions OFNUMBER 31jf All All Miningand .. 1960-70AGENCIESEMPLOYMENTTHETHROUGHPLACEMENTSANDEMPLOYEES \Sectorsf'Industries FishingForestryAgriculture,and Quarrying Manufacturing ServicesSanitaryWaterElectricity,and Construction Commerce Communica¬StorageTransport,and .. Services...... Placements Table 6
PERCENTAGE INCREASE/DECREASE OF RECORDED EMPLOYMENT BY INDUSTRIAL SECTORS
Sectors 1960/65 1966/70 All Industries 18.9 15.3
Agriculture, Forestry and Fishing -2.8 . -0.8 Mining and Quarrying -7.9 -3.5
Manufacturing ...... 34.5 57.9
Electricity, Water and Sanitary Services .. -1.6 25.7 Construction 18.1 27.4
Commerce 9.1 3.3
Transport, Storage and Communication .. -2.4 -16.4
Services ...... ;. 54.3 19.4
44. The number of people who are finding jobs through the employment exchanges has recently shown a healthy upward trend. After the high point of 1965, when nearly 90,000 people were placed in jobs through these exchanges, the figure dropped to less than 60,000 at the low points of retrenchment in 1967. It has climbed back to 76,000 in 1970. In 1971, if our policies succeed, the record placement figure of 1965 should be surpassed. But we must look much further ahead. The task of catching up with a deficiency of 220,000 jobs in an urban economy that probably employes only about half a million people in paid jobs would be formidable even for the most healthy economy. For an economy that is still hobbled by a weak balance of payments and by excessive external indebtedness, it will call foi heroic efforts. The budget proposals which I am presenting to you should be judged against the background of these facts. Any budget that did not address itself to the problem of unemployment would be cowardly and irrelevant. In the face of great odds the Progress Party Government has decided that its 1971/72 budget will face up to this problem, however modest the contributions that it can make in a single year.
18 Section II BALANCE OF PAYMENTS 45. In the first half of the 1960s Ghana consistently rah a deficit on its international trade in goods and services. This deficit reached an all-time record of N0217 million in 1965 and averaged N0114 million over the period 1960 to 1965. Since then a radical improvement has been achieved, resulting in a reduction of the current deficit to N£15 million in 1970. However, Ghana's balance of payments position remains essentially weak—and among the elements of weakness the following are the most important. First, average real imports in the latter half of the decade have been running at a level about 10 per cent below that of the early 1960s. This is clearly not a position that can be maintained as the population is nearly a third larger today than it was ten years ago and the economy itself has expanded by over a third. There are few known historical precedents for the hope that balance of payments equilibrium can be maintained in the long-run by a reduction in imports even in a slowly growing economy. 46. Second, the growing volume of exports which should have provided the more secure long-term solution to the balance of payments problem has simply failed to materialise. Our trade still depends dan¬ gerously on one unstable primary product—cocoa. In years of good cocoa market prices, such as 1970,. export receipts have gone up but in bad years, such as we have now commenced, they have gone down. There are no alternative sources of export earnings to cushion these swings. On the contrary, some traditional mineral exports have declined, thereby neutralising the beueficial effects of those few cases where exports have in fact increased.
Table 7 NON-COCOA DOMESTIC EXPORTS* (NC millions; 1968/69 prices)
Item 1965/66 1966/67 1967/68 1968/69 1969/70 0.03 '— 1. Bananas 0.05 0.03 0.03 0.06 0.07 2. Other fruits 0.21 0.02 0.03 1.38 0.56 0.56 3. Lime juice 0.11 1.09 0.55 Ö.57 0.59 4. Yams 0.07 0.61 1.56 2.02 2.24 5. Coffee 2.62 1.81 0.04 0.05 0.06 6. Palm kemelsf 0.04 0.09 0.52 0.51 0.11 7. Shea nuts 0.04 0.01 17.81 18.47 20.92 8. Timber logst 16.38 14.53 12.95 14.18 .. 12.20 13.08 9. Timber sawn 12.94 15.22 13.78 .. 15.05 10. Diamonds 16,30 9.99 1.95 1.63 1.34 1.84 11. Bauxite 1.40 8.67 14.36 8.57 7.54 12. Manganese 12.53 0.28 0.35 0.52 13. Kola-nuts 0.42 0.60 0.42 0.27 0.71 0.64 14. Veneers 0.79 26.17 24.70 25.05 15. Gold 24.79 25.43 86.10 88.04 Total .. 88.91 77.42 92.75 104.3 96.8 99.0 .. 87.1 Index . .. 100.0 * Excludes Valco aluminium. t Based On average price for January-June 1968 and 1969. t Excludes curls. Source: Based on C.B.S. data. •19
£ im 47. Third, the improvement in Ghana's balance of payments which took place in 1970 masked the fact that there was a sharp increase in imports. Commodity imports which had been projected in the. govern¬ ment's One-Year Plan to increase to a level between NJZ417 and NJZ436 million, were actually NJZ465 million, 7 per cent above the upper limit projected. The structure of this increase looks particularly unhealthy, with a large increase in expenditure on imports of food, drink and tobacco. There has been a reduction in direct imports of textiles and clothing. But owing to the extreme dependence of the local import-substituting industry on foreign raw materials such savings in the direct imports of the finished consumer gocd> are substantially cancelled by increases in imports of raw materials. The net effect is that the economy continues to be highly dependent upon foreign supplies for its basic consumption requirements.
Table 8
IMPORTS BY END-USE CATEGORIES 1968/69 TO 1970/71 '
. (NC Millions) Index 1968-69 1969-70 1970-71*
• (1968-69=100) Description (Estimate) 1969-70 1970-71
f I. Non-durable consumers' goods 79.3 98.8 123.9 124.6 156.2 1, Food, drink, tobacco 33.5 45.4 68.8 135.5 205.4 2. Textiles, clothing 24.1 25.8 22.8 107.1 94:6 3. Others 21.7 27.6 32.3 127.2 148.8
II. Durable consumers' goods 15.3 17.0 23.5 111.1 153.5 ' 1. Private vehicles 7.3 8.6 13.0 117.8 178.1 2. Others 8.0 8.4 10.5 105.0 131.2 III, Fuels and lubricants 21.9 23.2 24.3 105.9 111.0
IV.Non-durable .. producers' materials 97.2 126.4 129.1 130.0 132.8 1. Raw materials for food, drink, tobacco, manufacture 27.1 25.8 27.4 95.2 101.1 2. Raw materials for agriculture .. 6.3 7.7 6.1 122.2 96.8 •3. Raw materials for mining, other manufacture, commerce (t) 63.8 92.9 95.6 145.6 149.8 V. Durable producers' materials 31.6 36.8 53.1 . 116.5 168.0 VI. Producers' equipment 80.0 97.2 111.1 121.5 138.9
... _ Totals ,(f) 325.1 399.4 465.0 122.9 143.0
* Based on provisional total for 1970-71; end-use breakdown on first nine months, t Includes Valco imports and freight and insurance.
Source: Based on C.B.S. data.
20 48. The trend towards an improved trade balance in 1970 has now been decisively reversed by a relapse of the cocoa market. Since other sources of export earnings are unavailable, and in any case could not be mobilised in the short run to compensate for a reduction in cocoa export earnings, a reduction which is now estimated at N05O million in the coming year, government has no option but to introduce measures to restrain the demand for imports. Let me emphasise that I personally do not believe that this is the correct way of dealing with balance of payments problems. A sudden reduction in imports inevitably leads to the risk of a recession in the economy and of inflation due to shortage of goods which have been built into the pattern of commodity use of the economy. But it is the sort of painful medicine which has to be adminis¬ tered because of the basic weakness in Ghana's balance of payments situa¬ tion and the absence of reserves to cushion such short-term fluctuations as are now taking place in the cocoa trade.
External Debt 49. You will recall that after last year's London Conference on the pre-1966 medium term debt obligations of Ghana it was agreed to adopt an interim two-year solution offering 50 per cent debt relief pending the convening of another conference which was scheduled to take place by December, 1971. The World Bank was requested by both Ghana and the creditors to help prepare tne basis for the next round of negotiations. Work is proceeding and we are informed that it will be possible to organise a conference well before the terminal date for the present settlement. At this time it is only necessary to restate the position of the Governmenl of Ghana on two fundamental issues. Firstly, there seems to us no plausible way of avoiding the conclusion that the only realistic and feasible solution to the debt proolem will be a long-term settlement which allows the economy of Ghana to begin restoring its basic strength before repay¬ ments nave to be resumed. Second, the level of debt should not be increased so alarmingly as has been done in the past by the chosen methods of debt rearrangement. As long as agreement can be reached on these two fundamental requirements, it would seem to me that the chances of success for the next debt conference are very great. 50. Among the debt repayment obligations which fall due in the present financial year will be payment of N£28.5 million to the IMF and NJZ4.5 million to the World Bank. The payments to the IMF will be in respect of short-term credit extended to the N.L.C. Government as balance-of-payment support in the years 1966 and 1967. Under the established rules of the Fund, such loans are to be amortised after 3 years subject to the possibility of short extensions. Such loans are intend :d to contribute to the restoration of the country's balance-of-payments position so that the loan can be repaid within the stated period. Alter¬ natively, they are meant for countries whose basic balince of payments is sound,so that period» of deficits are abnormal interlad ;s and balance- of-payments support will be repaid when the basic surplis position, has been restored. In the case of the loans from the IMF to the Government of the N.L.C., neither of these conditions have been fulfilled. Given the
21 absence of any massive development effort, it could that increased hardly be expected export potential could be created during the 1966/69 period. The stability which was achieved meant a return to a position of a rela¬ tively steady level of balance-of-payments deficit. 51. It will therefore be necessary to seek I.M.F. understanding with the regarding these repurchase obligations in the wise the coming year. Other¬ paradoxical situation will be reached where the balance-of- payments support is extended to the country and taken back in the when its year payments position once more turns seriously downwards. Owing to the long interval between the granting of the World -Bank's loan for the V.R.A. and the resumption of lending by the Bank to other sectors of the Ghana economy, there has developed a hiatus in bank operations in Ghana which is only now ending. This has raised the question of the effects of the relations between the Bank and Ghana on the country's balance-of-payments situation. I hope we will be able to reach agreement on a World Bank loan prog"amme designed to support Ghana's efforts to improve its balance-of-payments.
Import Policies 1971/72
52. Last year Government took the decision to carry out a major programme of trade liberalisation whereby approximately 60 per cent of the total value of Ghana's import trade was freed from administrative controls. Government then, indicated that this policy of liberalisation would be continued if circumstances permitted. The experience of the past year that has shown given the appropriate adjustments in the level of taxation on such imports, liberalisation need not result in an uncon¬ trollable increase in imports. In other words, given the appropriate supporting policies, the prospect of a less favourable development in the balance of trade in the coming year is essentially no barrier to the continuation of the liberalisation programme. 53. Many of the items that were freed from administrative controls in last year's budget were goods essential for investment and The production. imposition of surcharges on these goods in return for liberalisation has produced the paradoxical situation that the importation of such items is now subject to a higher level of taxation than the importation of other less essential imports simply because the latter remain subject to administrative controls. We also discovered there during the year that are many instances where the benefits of in liberalisation, especially stimulating industrial production,- have not materialised some because complementary requirements of the have remained to industry subject specific licences and have been unavailable on the market. It is necessary to remove all restrictions that may thus have stood in the of industry. way
. 54. It has accordingly been decided to carry forward the gramme of pro¬ import liberalisation. As a result of the measures which I will presently request to Parliament approve, about two-thirds of Ghana's total import trade will henceforth be free of all licensing controls. 22 55. It has come to the notice of Government that owing to the high margin of private profit that can be made on some of the least essential and expensive luxury goods, certain importers have abused the spirit in which import licences were granted and import controls were removed and have continued to spend foreign exchange on the importation of such items despite the repeated call by Government for everybody to help the nation to conserve its foreign exchange. Since we cannot trust to their good judgement it is necessary to impose direct controls on these importers. Accordingly, the Ministry of Trade is today publishing a list of items the importation of which will simply not be allowed in the course of this financial year. As a further contribution towards meeting the balance of payments problem, all branches of the public services without any exception are with immediate effect prohibited from making any new purchases of passenger cars until further notice, save as expressly permitted upon application to the Ministry of Finance. ^ 56. After the implementation of the above measures, a free market will have been restored for most of Ghana's import trade, but purchases of goods from abroad will be subjected to a relatively high level of taxa¬ tion. This will be due entirely to our continued inability to earn more, which would permit the consumption of more imported goods through lower taxes on, and prices of, such goods to Ghanaians by a reduction in taxes.
57. Last year, when I introduced these fresh impositions of taxes on imported goods I chose for them the name of "temporary surcharge". Sceptics have asked how temporary are these surcharges? Let me return to the basic analysis of our balance of payments situation, which I have presented to you, for an answer to this question. These surcharges will not last one day longer than the day it becomes evident that, through an increase in exports, this country has begun to pay its way in its inter¬ national transactions, and that accordingly we can afford more imports. Then, Ghanaians will be given greater access to imports at lower prices through lower taxation.
Export Promotion 58. It is because of this that I have consistently spoken about the need for a greater effort in the field of exports. During the past year, Parliament has legislated for the implementation of the export bonus scheme. Many Ghanaian traders and manufacturers are finding that, by taking advantage of this export bonus to reduce their price quota¬ tions, they can now realistically look forward to being able to land substantial export orders especially in the neighbouring countries. 59. In order to support their efforts, Government has negotiated trade and payments agreements with Mali, Upper Volta and Dahomey and is holding discussions with the Ivory Coast about a similar arrange¬ ment. In our trading relations with our neighbours we seek agreement on two measures that are of particular importance to potential Ghanaian exporters. First, potential importers of Ghana-made goods in those neighbouring countries where foreign trade is subject to licensing controls
23 should be able to obtain more licences to import from Ghana than they have hitherto done. In some of the neighbouring countries the issuance of such import licences remains very limited in relation to potential export sales which could be made by Ghanaian enterprises.
60. Secondly, we seek to obtain tariff treatment no less favourable than that accorded to the exports of other countries to the markets of our sister states. It is quite obvious that the existing contractual relations between many of our neighbouring countries and the members of the European Common Market, and also the contractual relations among those countries within the framework of the West African Customs Union, commit them to grant certain tariff advantages to the E.E.C. countries and to each other vis-à-vis Ghana. Under established law and practice in international trade there are well-known rules for determining the circumstances under which Ghana could expect to share in these tariff •* advantages. We are quite prepared on our part to enter into contractual relationships for the granting of mutual trade advantages between our¬ selves and our neighbours to eliminate the tariff discrimination against our exports. 61. Other administrative arrangements which have been put into effect including the speeding up of the process of refunding duties and surcharges on imported raw materials which have been used for filling export orders, should facilitate the work of those Ghanaian businessmen who have responded to our call for increased exports. But the overriding fact, which gives great cause for concern in this field, is how few of such businessmen there are and how sporadic is the effort that we as a nation are making to increase our exports. Government has established a strong department in the Ministry of Trade to deal with export promotion. The banking system has been requested to make especially favourable arrangements in favour of exporters, including granting facilities for the discounting of export bills. Various suggestions which have been received for strengthening the Ghana Export Company, so that it can play a more decisive role in export promotion, are being pursued. 62. But in the end the job of exporting rests on the individual manager of an enterprise with a potential for exporting. It is remarkable, for instance, that Ghanaian businessmen travel much more extensively to make arrangements for importing goods than to arrange for exporting. It is disturbing to note how few stable commercial relationships have been established between Ghana's businessmen and customers or agents in any of the neighbouring countries. As part of the new arrangements which have recently been made for the organisation of trade at the major crossing points on our borders, Government will provide funds in the coming year to establish export outlets in which we will offer for duty-free sale all the lines of made-in-Ghana goods which are in demand in the neighbour¬ ing countries. These shops will however only serve travellers. More substantial export business directed towards sale in the major markets and shopping centres in these neighbouring countries will have to be arranged by the individual businessman, although the Ghana Export Company and Ghana's diplomatic missions in those countries stand ready to assist in every way possible.
24 63. Tourism has been identified as a potential major source of foreign exchange earnings for Ghana. This year's development estimates contain provision for the launching of a large programme for the im¬ provement and construction of tourist facilities. This includes the preparation of a number of castles to receive tourist traffic, constructing hotels at various reg:onal centres, Vg:nnmg with Bolgatanga and Cape Coast, developing a major new tourist hotel in Accra, and preparing some of our best beaches to receive tourists. Wh'le Government is willing to lay out its share of the money that is required for the dsvelopment of tourism, this trade is essentially one for private operators with imagina¬ tion and contacts abroad, and with the managerial ability to supply to. the tourists the quality of services that should go into the tourist trade.. Partnerships are therefore being sought with private interests, both Ghanaian and foreign, in this programme of tourist development.
64. Because we start with a large and chronic balance of payments deficit, which constitutes the single most important brake on our ability to make economic progress, the export targets of.the development plan are, together with the food production targets, the most important national targets that can be identified. The calculations indicate that whereas exports haye been stagnant for years, even the most modest programme for general economic growth in the next four years would require that cocoa exports should increase by 3^-4 per cent per year and- other exports by over 10 per cent per year. Considering that both cocoa and non-cocoa exports have been practically stagnant for a whole decade, these targets represent a formidable challenge.
65. It is the belief of Government that this challenge is not beyond the capabilities of our people. Hitherto the best business talent, the most expert civil servants, and the cream of our politicai cadres, have not been deployed on solving the export problem. Our financial system is more concerned with the trad? in imports than with exports. Public servants in the Ministries of Trade and Finance, in Customs and in the Bank of Ghana, all treat the exporter as a rather marginal figure. We must ensure that the exporter becomes one of the aristocrats of our society, command¬ ing the attention of political personalities, public servants, bankers arid others.
Import Saving
66. In a year such as the one which we have just entered, when balance of payments difficulties pose a .major threat .to the entire economy, it becomes apparent once more how much foreign exchange Ghana con¬ tinues to waste on goods that can be produced at home with just a little effort on our part. In 1970 Ghana spent N£70 million on importing sugar, cotton, tobacco, rice and fish. In the case of fish we have for the past six years had the capacity, to produce ,more than our domestic requirements. Hence Government has decided simply not to allow any more imports of fresh or frozen fish after the end of this year. The item will accordingly be placed on the prohibited list.
25 67. When one examines objectively all the facts regarding the possibilities for increasing exports and saving imports one is still drawn to the conclusion that with some concentrated effort the balance of pay¬ ments problem can be resolved in the rational manner—that is by achieving equilibrium at a high level of both imports and exports rather than by retrenchment of imports. The structure of our production is such that we need a large volume of imports for national development. We do not produce machinery or equipment or most classes of chemicals: and these are the sinews of economic development. During the plan period imports would still have to grow at a rate of between and per cent per annum in order to support an overall growth rate of between 5 and 5\ per cent per annum—and that is onthe assumption that the export growth target of 10 per cent per annum will be attained. Clearly, we cannot afford these necessary imports unless we can eliminate all the unnecessary imports and bend our most concentrated energies towards export promotion.
Importation of Cars
68. While the public transport system has fallen progressively into a state of collapse we have, as a nation, been spending increasing sums of foreign exchange to procure individual means of transportation for the better-off members of the community. It would be illogical for a poor country such as this to get itself into the position where the only reliable means of getting about are private cars and taxis. It has been decided by Government to make a forceful demonstration of our will to reverse this trend. It has accordingly been decided that no more cars may be imported into Ghana for sale until further notice. With immediate effect, all outstanding licences for the importation of cars against which firm purchases have not been made—and proof of this shall be upon the importer—are cancelled. Car dealers who at present hold stocks of cars against which firm purchase orders have not been consummated may' not dispose of any such cars pending further instructions. Individuals who arrive in Ghana with their own cars will be allowed to bring them in provided they can satisfy the relevant authorities that, if they are Ghana¬ ians, they are returning with such vehicles which they have acquired in the normal course of a period of residence abroad which has been of not less than twelve months' duration; if they are foreigners, that they are bringing in such cars for the bona fide use of themselves and their families. As I will presently inaicate substantial allocations of funds have been made by Government for the acquisition of buses to meet the require¬ ments of a reinvigorated public transport system. Private imports of buses an'd commercial vehicles are also on Open General Licence, and since the 1st of April they have not been suoject to an import surcharge. With this combination of measures it is intended, within the next eighteen months, to restore a more rational balance between mass public transportation for the use of the lower income groups and private individual means of transportation for the higher income groups.
26 Section III
THE BUDGETS. OF 1970/71 AND 1971/72
The 1970/71 Budget
69. The past financial year was a reasonably satisfactory one for public revenues. Taxes on production and expenditure yielded. N£380 million of which a net amount of NJZ80 million were allocated to reserves and NJZ300 million brought to account for the year's operations. Taxes on income and property fell a little short of the level forecast, due principally to a shortfall of N£4.6 million below the estimated level of taxes paid by companies. While the net amount of taxes on production represented an increase of N£35 million over the collections in 1969/70, taxes on income fell short of the previous year's collection by N£5.5 million, against a forecast of a slight increase. A shortfall in capital receipts was due primarily to our inability to collect the expected contri¬ bution from the Social Security Fund, because the appropriate securities, which would enable the Fund to lend to Government in the manner prescribed by the Act governing it, were not issued. The utilisation of external aid at a level of N£37.2 million fell N£12.8 million short of the estimate. The scheme for issuing premium bonds was also not brought into operation during the year. 70. Recurrent expenditures, excluding debt service, exceeded the budgeted levels by the large margin of N£14 million. This was due principally to an increase of N{25 million in the sums required by the educational services, and a payment of N£2 million that had to be made in respect of unpaid electricity, telephone and water bills of Government ministries and departments, as I explained when presenting the supple¬ mentary estimates to Parliament. 71. It was not the knowledge that the financial position of the government was relatively sound that led to this excess of recurrent expenditures over the original estimates. Government's operations for many' years have been characterised by this tendency towards a high rate of increase in current spending. It is estimated that during the 1960s as a whole, when the wealth of the country, as measured by the gross domestic product, was rising at an annual rate of 2.5 per cent per annum, the current costs of running the Government increased àt a rate of 10.5 per cent per annum. At the same time Government's income by way of taxation rose by an average of 10 per cent per annum, thus leading gradually to increasing difficulties in finding the resources to finance the development programme.
72. The net balance between government revenues and current expenditures averaged N02O million per annum in the period 1960/65 and N015 million per annum in the second half of the decade. The short¬ fall in savings was accompanied by a decline in investment. It is one of the most unsatisfactory aspects of Ghana's economic performance during
27 the 1960s that investments for the future declined as a proportion of the nation's wealth from an average of 20 per cent during the first half of the 1960s to 15 per cent during the second half. The inability of the Government to find a substantial contribution to national savings from its own tax revenues is one of the leading causes of this failure to mobilise domestic resources for national development. 73. Seen against this long-run perspective, the performance in 1970/71 would suggest that we still have a long way to go in observing that rigid attention to economy in the operations of Government which is required in the overall national interest. In the present financial year, when the prospects for collecting tax revenues are beclouded by the weak state of the cocoa market, the need for vigilance becomes particularly great. But it is doubtful whether those who are responsible for managing the operations of Government are sufficiently aware of the seriousness of their responsibilities in this regard. A review of the Government's opera¬ tions in the past year has revealed case after case where the officials who are responsible for controlling expenditures showed barely any interest in the fact that departmental estimates had been exceeded or were running in an uncontrolled manner. It would seem that the sanctions which descend upon all of us for failure to exercise due care in the expenditure of public funds are inadequate to induce the requisite degree of concern. I will therefore ask Parliament to adopt amendments in the relevant regulations in order to increase such penalties. The 1971/72 Budget
, 74. In deciding the .scale of its operations for the new financial year, Government first had to take a stand on a broad question of national policy. In the face of unfavourable trends which are forecast for tax revenues and the balance of payments, should Government cut back on development and even undertake measures of retrenchment in its curieht operations? Or should Goveri ment through its budget seek to support, maintain and perhaps increase the momentum towards accelerated development which had begun to show in the economy? The decision of our government is that it is necessary and possible to main¬ tain expansion. This decision is based in part on our general policy that, after so many years of economic stagnation, the Government should not, even in the face of considerable financial difficulties, take any action which would kill the trend towards economic expansion that has begun to emerge in Ghana in the last two years. We have so many years.of neglect to .make up. And the problem of unemployment is of such dimensions that a determined attack on it can no longer be postponed for any reason short of a total collapse of the economy.
... 75. Let us be cLar about'the implications of that decision of Govern¬ ment. It means that those of us who have some income, by way of wages and salaries, or profits or income from properties, are being asked to mike additional sacrifices in order to compensate for the approximate ■ reduction of NJZ50 million in export receipts and NJ245 million in govern¬ ment revenues which will result Lorn ihe fall in the world market price of cocoa. We are being asked to do this so that some of those who are now.
28 unemployed may be provided with jobs; so that we can continue to maintain the standards of our public services in the field of education, health and water supply; so that we can maintain our assistance to agri¬ culture and the rural economy generally; and above all so that we can increase the level of our investment in the future of this country.
76. We are forced by this decision to present to the country a hard budget, an austerity budget. But we think that our decision on the funda¬ mental issue is correct. And we are asking Parliament and the nation to endorse it. This is the central question which we shall be debating when we discuss the Government's economic policy in the next few days. I am sure that the majority of the people of this country will endorse our choice, not because the majority of all Ghanaians support our Party and our Government but because they will also agree that in this particular instance our decision is right. 77. It is planned to spend a total of NJZ323.6 million on the current operations of government in 1971/72, excluding debt service. Another N0.125.1 million excluding repayment of short term borrowing will be required for the payment of interest and repayment of capital on the public debt, both internal and external, making a total of NJ2448.-7 million. Excluding the public debt charges, the increase in expenditure would amount to NJZ19.4 million or 6.4 per cent of last year's current spending. This comprises an increase of N£9 million in the sums allocated to the Ministry of Agriculture, NJZ10.6 million in proposed expenditure on Education and NJ£5 million in expenditures on the Health Services. 78. To compensate in some way for these increases, which I am sure Parliament will endorse, it has been deeded to reduce expenditure on externa] Defence by N£5 million while increasing by NfZl.6 million the moneys devoted to protecting the lives and properties of the citizen against what was threatening to become a defiant wave of lawlessness. Already the upsurge of lawlessness has been put down by a combined army ana police operation which is still in force. 79. The reduction in Defence expenditures in the present financial year is a decision which calls for special comment. For some years governments have been faced with the problem of what to do about a level of Defence expenditures which was clearly onerous for a small country such as ours. But to achieve this reduction was a matter that required careful thinking and planning. With the co-operation of the Armed Forces Command a rational programme is being implemented to make this saving in expenditure possible without sacrificing the basic defence needs of the country. It has involved raising all the basic questions of.defence policy. How large should the armed forces be? Can we afford to maintain naval and air force bases? What should be the nature of civilian control over defence policy? How should the foreign policy of the government affect defence policy and vice versa? These are all matters of legitimate concern for the people and Parliament, ana certainly matters for grave decision by the Government. 80. The Armed Forces intend to go one step beyond effecting this major economy in expenditures. It is quite clear that once a soldier has
29 been trained to the standards that our Armed Forces observe,. it is possible to combine his continuing maintenance training with substantial contributions to national development. Therefore during this financial year, it has been arranged that wherever units of the Armed Forces go out on training exercises they will seek to leave behind them some positive development project for the area by way of roads or sanitary buildings or- facilities of one sort or the other as their contribution to national development. 81. This operation to economise on the expenditure of the Armed Forces is a pointer to the sort of analytical process that the Govern¬ ment will be extending progressively to other areas of its operations. One of the first such studies will concern Education. For whilst undoubtedly this Government will spare no efforts to provide the financial resources that are required to achieve its objective of giving every child born in Ghana the opportunity to obtain a basic minimum of education, it is also necessary to ensure that every cedi which is provided in this vital area goes as far as it can go. What should be the proportion between boarding and day schools? Why should Government pay N(270 per year on campus services for every pupil in secondary school? Should all teaching trainees be given automatic full scholarships? What use is the present system of technical education in terms of the manpower needs of Ghana ? In the meantime, the Government has decided to put all educa¬ tional units firmly under the budgetary control of the Minister. 82. The concept of achieving maximum cost effectiveness in various branches of government is one with which our traditional administrative system is not very familiar. But it is one that we have to learn if in the long run we are going to keep the cost of running the administration within the means of the country. Let me mention by way of illus¬ tration some areas in which a different way of looking at Government's operations would suggest interesting departures towards achieving better economic results. Tema Harbour cost the Government N07O.14 million to construct. During the present financial year the gross revenues from the operation of the Harbour will amount to N05.8 million which is equivalent to 8.3 per cent of the capital invested in it. Net revenues at N£2.37 million will be equivalent to a return of 3.37 per cent on the investment. One has to ask the question then: in a country which is as short of capital as Ghana now is, and where the cost at which the Govern¬ ment can borrow money is certainly above 5 per cent, is it acceptable to employ such a large volume of funds at such a low rate of return? When the management of the Railway and Harbours Authority ask themselves this question, it is obvious that the answer is to try to earn higher revenues with the existing investment. Looked at from that point of view, an effort, for instance, to develop Tema into a major entrepôt narbour to serve the neighbouring countries will be seen not as an interesting though marginal diversion, but as a serious contribution towards justify¬ ing the very existence of Tema Harbour.
83. The countiy earns about NJZJ5.3 million in foreign currency from the sale of power to Valco. But this is inadequate to cover the Volta River Authority's external debt service of NJ27.3 million for 1971.
30 It will ihöt be until the end of 1972 that we will begin to!earn additional foréígnrexchange from the export of power to Togo and Dahomey. 84. The implementation of the corrective programmes that arise from such analysis of the cost effectiveness of the operations of govern¬ ment will invariably be difficult; in many cases it will hurt some Btit in the people. long run the nation will either have to carry through such reform or find that the machinery of Government has become a terribly burdensome load on the back of the economy, making it impossible to achieve that very improvement in the material well-being of the individual citizen Whichis the ultimate end that the whole machinery of Government is supposed to serve. 85. We should also remind ourselves that the running of this country still depends to a considerable degree upon the support of other Governments. Tn the five years since 1966, Ghana has received total commitments of N£Ü263 million of project aid and balance of payments support from these countries, including particularly the United the United States, Kingdom and West Germany. Of this aid, N017O million had been utilised up the to the end of 1970. In present financial year drawings on such aid are estimated to amount to N056 million, which will finance one-third of the development programme. We will simply have to achieve some major economies in Government operations if the goal of fiscal independence is to come within our reach within the foreseeable future.
Table 9
ANALYSIS OF LONG-TERM AID LOANS 1966/70
Weighted Average Terms(*)
Per cent • contri- Rate of Amount button Interest Gr^ce Maturity Donor Country (NÇmns) {Per cent) Periods ^ Years) ï- A. Project Aid 1. Canada 6.73 9.10 0 10 50 2. Denmark 2.72 3.68 0 7 25 3. Italy 12.24 16.56 6.00 4 12
4. United States .. 2.24 2.76 2.50 10 12 5. West Germany .. 18.77 25.40 •2.75 7.5 25 5 6. I.D.A. 25.27 34.19 0.75 9.5 47.5 7. l.B.R.D 6.12 8.28 6.50 10 25
Total Project Aid 73.89 100.00 2.52 8 33.5
Notes:
(*) Weighted country terms for individual loans.
31 Table 9—contd. . ■ ;| l)
ANALYSIS OF LONG-TERM AID LOANS 1966/70
Weight Average Terms Percent
contri- Rate of ■ '
. Amowît bution Interest Grace Maturity Donor Country ' (NÇlmns) (Per cent) Periods ( Years)
Commodity Aid (f) 11 1. United Kingdom 43.86 24; 53 1.45 5 25 2. United States(|)., 120.50 67.39 2.97 9 40 14.44 8.07 2.87 7 24 3. West Germany ..
Total Commodity Aid 178.80 100.00 2.56 8 35.0.
All Aid 1. Project 73.89 29.25 2.52 8 33.5 2. Commodity 178.80 70.75 2.56 8 35.0,
34.5 Total All Aid .. 252.69 100.00 2.55 8
(t) Excludes Canadian food grants of NC10.4 million. (J) Includes U.S. PL. 480.
Highlights of the Expenditure Programme for 1971/72 86. In framing its expenditure proposals for the present financial year, the Government has sought to focus action on three areas, namely, expanded food production, increased employment opportunities and a new expanded programme to supply water to more people, especially in the rural areas. Outside the ordinary budget, it is also intended to carry out a substantial programme of investment,' in which projects will be selected for their ability to create employment and to contribute towards the improvement of the balance-of-payments situation.
87. Before I go on to describe some of the salient details of the programmes and projects which are proposed in pursuance of these leading objectives, let me emphasise that everyone of the other areas of development to which the Government has put its hand since assuming office two years ago will also be further expanded during the year. In proportionate terms, the increase envisaged in budgetary outlays in some of these areas will, in fact, be even greater than is proposed for the priority sectors wnich I ha^e mentioned.
32 (iä) Education 88. A notable case is the field of education. Last year the govern¬ ment made an innovation in the improvement of primary and middle . school facilities; this marked the beginning of what could turn out to be one of the most important developments in educational policy in the life of this Parliament. It is well known that the institution of universal and' compulsory primary education in Ghana was not accompanied by any credible plans for the physical development of schools or for the pro-T gramme of teacher training wnich was required to make universal primary education meaningful. In the last five years, progress in teacher training has advanced to the stage where it is now possible to envisage a time when all the teachers into whose care we entrust the training of our children during tneir most tender and formative years will be people with the requisite professional training for this task.
89. It has turned out to be even more difficult to finance the construction of the physical facilities which are required to cope with the vast increase in numbers of school children. The pnysical environment within which many rural school children get their formal education puts them at a very great disadvantage compared to others. Hitherto, the central government only recognized a responsibility to assist with the provision of school buildings in restricted areas of the country based on historic circumstances. It is no longer possible to maintain the pretence that, without central, government intervention, the local authorities will be able within a reasonably short time to provide adequate school build¬ ings and equipment in most parts of Ghana.
90. The Government therefore has decided to make a small begin¬ ning by offering to match, cedi for cedi, the contributions in money, in materials and in labour which any local community in Ghana could put up for the construction of school buildings. The initial allocation of N$22 million has been distributed to reach all parts of the country. Members of Parliament have been invited to help in deploying it towards the most urgent needs in their constituencies. It is being followed by the provision of another NJ22 million under the current year's budget. 1 trust that members of Parliament will continue to provide leadership in die implementation of this programme. Through this mobilisation of local initiative and the support of the central government, we should be able eventually to achieve a remarkable improvement in the physical conditions in which the majority of the nation's children recieve their elementary education.
9Í. I would like to mention another small item of expenditure with considerable long-term significance in the field of education: the provision of libraries in schools, for which an allocation of N$2101,000 is included in the budget. It is -a matter of great concern that, through the lack of reading material at critical stages in the educational process we should, as a nation, be producing so many people who have little familiarity with or facility for reading. As financial conditions permit, this programme will be vastly increased in future years.
33 92. Thirdly, let me refer to the question of textbooks ,and,other supplies for the prim try and secondary schools in which all parents"have a close personal interest. Last year the government contributed N02.O million to the textbooks scheme bringing its total subscriptions since 1967 to NJ210.0 million. The contributions of parents ever since 1967 has been NJ211.2 million.
93. In the coming financial year a further allocation of about NJ22.1 million of central government funds is being proposed for.the text books scheme. However, the scheme continues to be plagued by gravé fiscal and -administrative problems and extraordinarily high costs of operation. The money which the Government and parents are providing is not going as . far as it should. In many cases students are simply not getting the books and other supplies for which money has been provided. Among the most important proposals which will be presented for the approval of Parliament during this session will be those for a reform in the area of educational policy and administration, including measures to. contain the problem of mounting costs. They are being carefully worked out and I trust-that Parliament will support them.
(b) Health 94. The Government is holding steadfastly to its policy of extending facilities for sanitation and health to all.corners of the country; and in the process it is reducing the extreme neglect of the rural aieas which characterised past policies towards health services. Our programme for the construction of health posts which will serve the rural community at. the primary level is well under way. A second batch of 66 health posts will be constructed as soon as the fiist batch, which was started in the past financial year, has been completed.
95. At the next level above these health posts are the health centres, which will eventually ensure that there will be a qualified doctor resident in. every sizeable town in Ghana. As announced in the Sessional Address by the President, the construction of major hospitals at regional centres outside, the traditional triangle of Accra, Kumasi and Sekondi-Takoradi will' be taken one stage further with the commencement of work on the new regional hospitals at Sunyani and Ho. Eventually, there will also be such new hospitals in Cape Coast, Koforidua and Sefwi Wiawso, where in the meantime substantial improvements to the existing hospitals are being carried out.. 96. The capacity of central hospitals in Accra, Sekondi-Takoradi and Kumasi which have been constructed and modernised in the last decade has now been overtaken by the increase in population and by the greater demand for hospital services. These hospitals have also exhibited various defects in their planning. It is necessary in these urban areas progressively to decentralise the provision of medical services away from the single, overcrowded central hospital. It is therefore intended to proceed with the construction of five new urban poly-clinics in Accra, Kumasi and Sekondi-Takoradi. These poly-clinics will take over a large proportion of the out-patient work of the major hospitals, reduce travelling
34 distances for patients and also provide hospitalisation for the simpler cases. ! In effect, they will be small urban hospitals. The overcrowding of Körle. Bu, Okomfo Anokye and Effia Nkwanta hospitals will eventually be eliminated.
97. The importance of extending modern, health facilities to protect the people in all parts of the country has been acknowledged on all sides, ït is however impossible for the Government alone to continue to under¬ take this responsibility in the way that was done when the health services were designed to cater for that small proportion of the population which lived in the urban centres and were subsidised with moneys funnelled from the rural areas. In 1969 our Government asked Parliament for time to re-study the proposals which had been drawn up by the N.L.C. for the introduction of a scale of charges for hospital services and drug> to the people who use these facilities. This review has been completed and a modified system of charging hospital fees will be introduced with effect from 1st September.
98. Let me emphasise that for all residents of this country the a services of doctor in Government hospitals , will continue to be'free unless the individual chooses to pay for private attention. The charges for medical service relate to the provision of bed and board in hospitais and to the supply of drugs, X-rays and similar items. As envisaged under the N.L.C. proposals, Doctors will be given discretion in waiving any or all of these charges for those people who genuinely cannot afford to pay for drugs or hospital facilities. Nobody will therefore be denied-.medical services on account of his inability to pay for such facilities. But every¬ body who can contribute will be asked to contribute, in particular so that the Government can continue to extend health services to those masses of Ghanaians who have still no ready access to elementary medical care or sanitation.
(c) Transport - . 99. For the two years of its existence the provision of improved transport services has been a main blank in the rural development pro " gramme of the Progress Party Government. In the three years from 1967 to 1970, Government constructed a total of 1,241 miles of feeder roads under the national feeder roáds programme. 411 miles are under con¬ struction and 500 miles will be put out to tender in the present financial year. Government has commissioned a study for the next phase of the national feeder roads programme, the result-of which will be incorporated in the National Development Plan. We confidently expect that for the rest of the life of this administration we will be bringing into use new feeder roads at a rate of not less than 500 miles every year.' '
35: Table 10
FEEDER ROADS CONSTRUCTION (')
Total A verage Commence¬ - Mileage - Mileage Expenditure Cost/Ml. ment Programme Awarded Completed N0 . N0 date 1
• (!) .Pilot Scheme .. .92 90 885,356 9,837 1967 . (P.W.D.) 562 551 , (ii) Phase I .. 8,311,792 15,085 Jan, 1968
-(iii) Phase II 509 - 435 . 6,332,335 14,557 July, 1969 (iv) Phase III 492 165 2,081,053 12,612 July, 1970
• Totals 1,655 1,241 17,610,536 14,191
(') Situation as at end of June, 1971.
100. These roads are being constructed to the standards of what has traditionally been known as the secondary road network. Efforts are being continued to reduce the costs for the construction of these roads below the N£12,000 to N013,OOO per mile which they now cost. This year.,. Government will also begin a programme for putting a more durable surface on these secondary roads. The initial programme for this year 1971-72 consists of the tarring of selected stretches of feeder roads, totalling 100 miles which would otherwise be threatened with the most rapid deterioration owing to natural conditions.
101.-At the next level below these feeder roads are the many hundreds of miles of village and farms roads, most of them maintained by local authorities. Since 1969 the central Government has been helping the local communities to improve these roads to the standards of all- weather roads. This programme has achieved a far-reaching impact on rural life which is perhaps not sufficiently appreciated at the centres of Government. Many communities, which were yearly cut off by swollen rivers from their markets or whose roads had become blocked with weeds and erosion, have regained assured connection with the outside world through these newly improved roads. In the past financial year, 600 miles of such village access roads were improved or constructed by local communities all over Ghana with, the assistance of the Ministry öf Rural Development. The programme will be maintained at the same level in the current financial year. 102. Government is aware of the need to keep this vast mileage of new or improved roads in'a state of good repair to avoid the loss of the investment which we are now making in them. This year, for the first time, major financial provision is being made for the maintenance of feeder roads and village roads. The cost to the budget initially will be N£400,000. As a full maintenance programme is instituted it is expected that this figure will mount rapidly. I mentioned in last year's budget the need to re-define the respective responsibilities of Central Government
36 and the local authorities for keeping our roads network in a state of good repair. After the new local administration bodies have been elceted in the coming year, I hope it will be possible to arrive at fair and workable arrangements with them for this purpose. 103. With the rural road construction programme of the Govern¬ ment securely launched on an accelerating path, it is now possible to turn our attention to a long-term programme of reconstruction and rehabilita¬ tion of the trunk road network. This reconstruction and rehabilitation is necessitated by the steady expansion of economic activity and by the sheer passage of time. Many of the roads which carry significant pro¬ portions of the commercial traffic of this country have been overtaken by economic development. A typical example is the Kumasi-Sunyani road,- which is now carrying a large proportion of the country's timber and cocoa traffic on a road more suited to the conditions of 30 to 40 years ago. With the support of the World Bank, studies have been carried out of a national road rehabilitation programme, which will provide for the reconstruction and up-grading of a very substantial proportion of the network of trunk roads. A provision of N£4 million has been made in the estimates pending the completion of feasibility studies that are under way and the final negotiation of a loan. The tarring of the Bogoso to. Ayenfuri road, the improvement of the Bunso-Anyinam road and of the Accra-Nsawam road as well as the continuation of the tarring of the trunk roads from Techiman to Bawku and Tamale, constitute major elements in the trunk road improvement programme which will be continued during the 1971-72 financial year.
(d) Food Production 104. To return to the areas which have been selected for emphasis in this year's budget, the food programme promises substantial and early results. As I discussed earlier although food prices remained at a high level during the past year, the stage has now been set for a signifi¬ cant improvement in the domestic food situation for the coming year. By far the most dramatic development is the revolution of rice produc¬ tion currently taking place in the Northern and Upper regions. Aided by credit facilities of the ADB and the extension services of the Ministry of Agriculture, farmers in the area have expanded both their acreage and their use of improved inputs, including seed, fertilizer and mechanized services. Acreage devoted to rice has more than doubled in the Northern region in the past two years. This has been made possible by substantial increase in privately owned and operated tractors, many-of which were purchased with ADB assistance. Fertilizer consumption increased from less than 1,000 tons for the two regions in 1969 to approximately 3,000 tons in 1971, and a further doubling of this figure is expected in 1972. By the end of the current year as much as half of the existing acreage devoted to rice in Upper and Northern regions should involve the use of improved inputs. Applications of seed-and fertilizer have been shown to more than double yields, from 4 to 10 bags of paddy rice per acre. The Government has set self-sufficiency in rice production by 1974 as a major objective in agriculture. Attainment of this objective must how be 37 regarded not only as possible but highly probable, thus country over N£5 million in saving the foreign exchange annually. 105. With the aid of a pilot and project currently operating in Volta Central regions, efforts are being made to n similar green revolution in rmize ignite production. Intensive work has to trials and been devoted demonstrations in these areas over the with the view to past 2\ years developing a set of recommended and practices for maize acquainting farmers with their application. Efforts will be to the Eastern, Ashanti extended and Brong-Ahafo regions in the the ADB maize credit coming year. In scheme, which has been operating maize producing areas for the throughout past 2 years, increasing emphasis will be placed upon the use of improved practices by farmers who obtain credit. These practices will make it possible for farmers to more than double yields per acre and substantially reduce annual storage losses. 106. During the past year the Ministry of four project Agriculture prepared proposals, covering rice, maize, oil palm and have been subm'tted to cattle, which the World Bank and other interested for consideration. It is agencies hoped that agreement on those can be achieved during the coming year. Implementation of these projects vull subse¬ quently improve the domestic food and burden on supply situation reduce the food imports. In the case of the maize project, it is that a programme of envisaged supervised credit to small holders will of induce the application the improved on practises approximately 100,000 acres in major maize growing areas over a increase in five-year period. This will result in an annual production of over of 50,000 tons. A planned oil palm production in the expansion Eastern ana Central regions will additional 20,000 acres of bring an half high-yielding trees into production in tne latter of the decade, which will contribute substantially to the elimination of imports of seeds and oils. (e) Cocoa 107. Government efforts in cocoa are aimed at regaining Ghana's share of the world cocoa market, which has been declining in recent years, primarily as a result of Government's neglect of the cocoa during the industry early 1960's. An amount of N£15.7 million, approximately 50 per cent of the representing total budget for the Ministry of Agricul¬ ture, has been provided to support the programme of the Cocoa Division, including disease control and replanting. During will embrace the 1971/72, this programme replanting of 11,000 acres as a shoot eradication follow-up to the swollen campaign, and 298 nurseries will be provide established to plantirg materials. In addition, the government will N£3.5 million this spend year on a mass spraying campaign, under which 1.65 million acres will be sprayed with 400,000 gallons of insecticide cost to the at no fanners. It is expected that mass a n spraying, which will become gjlar feature of our cocoa programme, will contribute signally to increasing Ghana's yields and output. 108. The special Eastern Region cocoa rehabilitation which is being scheme, primarily financed by the World Bank, was launched earlier this formally year and field operations are now under project will cost way. The nearly N£16 million over a five-year period, much of it in 38 form of recoverable loans to cocoa farmers, and will provide for the rehabilitation of 51,000 acres of cocoa and replanting of additional 36,000 acres with high-yielding varieties. Cocoa rehabilitation will more than-triple the income of participating farmers, raising it from N£20 per acre to, N066 per acre. It is hoped that the Eastern Region project will serve as a model for similar efforts in other cocoa producing areas in the country.
(f) Water Supplies 109. It will be recalled that in 1968 the N.L.C. Government launched a "water budget" under which a total allocation of N04.5 million was made. The new programme was aimed at supplementing the extensions to the city water supply schemes that were then under con¬ struction for Accra-Tema, Sekondi-Takoradi and Kumasi, with a number of new water projects designed to reach the population in the smaller administrative and economic centres. In 1969/70 the allocation for water development amounted to NJZ7.5 million of which N£5.6 was finally spent. In 1970/71 a further increase in the budgetary allocation for water supplies was made, envisaging a total of NJ213 million for the year. But the water programme has fallen into severe difficulties in management and execution. Actual construction in 1970/71 totalled NJZ6.7* million 110. The programme as envisaged was a balanced one comprising the provision of good drinking water to a very large number of villages and small towns from boreholes, wells, and surface sources of supply in addition to the construction of water supplies for major urban centres such as Konongo and Tarkwa which, surprisingly, have not had water supplies all these years. The city schemes have continued with the com¬ pletion of the Barekese Dam at Kumasi and the commencement of work on a new water and sewerage project for Accra-Tema, partly financed with a World Bank Loan of N03.6 million. The rural programme has been largely stagnant. Of the boreholes that were supposed to be developed in 1970/71 barely 100 could be completed. 111. Engineering design and construction problems continued to frustrate the execution of proposed water supply schemes throughout the country. Government has therefore decided to focus special attention on the water supplies from this year in order to ensure that this vital element in rural development and sanitation will not continue to lag so far behind the other aspects of community development on which satisfactory progress is being made. On the basis of various administra¬ tive and technical changes which have been put into effect it is expected that a total programme level of N015 million can be actually attained during this 1971/72 financial year. This should result in the extension of good water supplies to thousands of Ghanaians in towns and villages all over the country. It is the intention of the Government thereafter to maintain the momentum which is built up in the present financial year so that by the end of the period of the National Development Plan the vast majority of communities of any size in any part of Ghana will be provided with safe drinking water. .
39 ' 22,000 30,300 108,400 85,800 63,800 166,900 74,800 624,900
' 54,300' 18,600
6
30 23 11 15 36 21 12 18 172
1970 15,500 11,300■ 39,400 52,400- 88,100 50,100 18,600 ' 79,400 ' 375,700■ 20,900' .
7 9 8 6
23 . 11 10 19 13 projectscompleted nities- 106
6,500 — 1970 19,C00 29,000 46,400 11,400 78,800 24,700 33,400 249,200
4 7 5 1969-70* 8 — 12 17''
during No. 1971-72 of nities .66 projectscompleted 1968-69duringand . Commu-Population 'Table11'' •" 1970-71duringand completionfor '1968■ Comma-Population • 1972TO . 3' : 10 WATERBUDGET 1968-72—PIPE-BORNE region WATERSUPPLIES summary. ~ Totals Note.—ApproximateCost Upper Western Volta of Northern Brong-Ahafor.... Ashanti .. Eastern Central...... GreaterAccra:. N£30isDevelopmentN£35toperson.per Wages and Salaries 112. On the 31st of March, the Prime Minister announced the establishment of a Commission of Enquiry into a subject that had agitated the government and the country for many months, namely, the level of wages and salaries at the bottom of the income scale in the face of the present cost of living and, on the other hand, the disparities between the top and bottom incomes within the public services. As requested, the commission has submitted an Interim Report. Government has considered its proposals and arrived at the following decisions:—
(a) Measures to reduce income disparities (i) Government Housing 113. It has been decided to abolish the system whereby Government not only undertook the impossible obligation of trying to house a large proportion of its employees but also gave substantial hidden subsidies to the highest paid public servants through the Government bungalow system. It has been decided to establish immediately a new company, to be known as the National Properties Limited, to which in the first instance there will be transferred all those Government bungalows in Accra, Kumasi and Sekondi-Takoradi that are not required to house persons to whom Government is obliged to provide free housing. All occupants of Govern¬ ment bungalows will henceforth become tenants of this company. For the time being, they will continue to pay the rents that they now pay. The monies so collected will be paid over to the company, which will henceforth be responsible for the maintenance and redevelopment of all the properties vested in it. By this measure Government will at last remove from the budget the need to finance the maintenance of residential accommodation for the highest paid employees with budgetary funds, so much of which is collected from the lower-paid workers and the farmers of Ghana.
114. A study is now being conducted by the Ministry of Works and Housing to determine reasonable economic rents for each of the houses involved. Eventually, the tenant/landlord relationship between the National Properties Limited and the occupants of its houses will be based on rents which are related to the actual standard and size of accom¬ modation provided for the tenant, rather than simply to his income as at present. As 1 have said, rents for the occupants of Government bungalows will be maintained at their present levels following the transfer of the properties. The rental policy of the company will also be subject to close supervision by the government within the spirit of the Rent Act in order to avoid a situation where the occupants of these bungalows could also become victims of the exorbitant rent charges that are rampant in Ghana. Eventually, a reasonable target of return on. value of these pro¬ perties will be set in order to regulate in a business-like manner the relationships between Government and the Company. (ji) Vehicle Maintenance Allowance 115. Government has hitherto assisted public servants with loans to acquire individual means of transport and has then virtually paid for the
41 day-to-day running of these vehicles irrespective of the extent to which they are used on Government business. The payment of these allowances has cost the taxpayer N£3 million a year. This expenditure the cannot.in present circumstances be any longer justified. Government has there¬ fore accepted the recommèndation of the Commission to abolish the payment of vehicle maintenance to all public .servants with effect from the 1st of August. Officers who are entitled to free transport by virtue of their posts will continué to be given such free Transport or an appropriate allowance in lieu. Payment of mileage allowance for actual travel on Government business will, of course, continue. (iii) Table Allowance 116. This allowance is paid ostensibly as a commuted reimburse¬ ment to certain categories of senior officials of the expenses incurred them in by entertaining as a part of their official duties. The allowance however, has come to be increasingly treated as simply a part of the emoluments of the officers concerned. Government recognizes the need for paying out of the public chest the cost of hospitality connected with its business. It has accordingly been decided to accept the recommenda¬ tion of the Commission and to substitute in place of the present payment of table allowance to individuals a system whereby approved entertain¬ ment will be paid for out of votes that will be held in the various Minis¬ tries and Departments for that purpose. Administrative instructions will be issued laying down the procedures for incurring expenditure on approved official entertainment.
(iv) Other Allowances 117. Pending the consideration of the final report of the Campbell Commission, Government has decided to leave unchanged the special allowances are which received by certain numbers of the public services such as the allowances in lieu of professional fees which is paid to doctors and dentists.
(v) Free Services 118. Some senior officers have in the past been giVen free of charge various utility and personal services such as telephones and Government drivers. In the case of telephones which are installed in the residencies of senior officials, Government will pay the monthly bills up to a stated limit for each officer. Charges over and above that limit will be deemed not to have been incurred in the discharge of official duties and will be the officer paid by. concerned. Similar arrangements have been made within the Armed Forces in respect òf the usage of electricity. Drivers will no be longer provided at Government expense for those officers whose work does not consist essentially of moving from place to place. (b) Raising the Real Income of Lower-paid Workers 119. Upon à careful examination of the information and advice offered by the Commission, government has come to the conclusion that it would require very large proportionate increases in the wages of the lower paid public officers to compensate them for the changes in the cost
42 óf living since the last increases in wages or to bridge the gap between their incomes and those of the higher paid officers. Such a scale of wage increases for the lowest paid public servants, even if not promulgated as an in increase the national minimum wage, would inevitably lead to reper¬ cussions in other parts of the income structure. In the face of this inability of the country to provide more food, housing, transport and any of the other goods and services which the workers would wish to buy, a- general increase in money wages would undermine the stability of the whole economy. It would also be self-defeating, as it would not improve the real standards of living of the lowest paid workers. Government has accordingly decided to adopt the more positive approach, which has been endorsed by many sections of the working population, of improving con¬ ditions and reducing costs in those fields that are of most concern to the lowest paid workers, namely, food, housing and transport.
Food 120. As I have already described the special emphasis which Government has given in its 1971-72 programme to food production which is related to this need to make food available in plentiful quan¬ tities. Unless the cost of locally produced food can be kept under control, the cost of living will continue to increase, to the detriment of the lowest paid workers more than any other group. In the coming year it is in¬ evitable that the cost of imported goods will increase owing to increases in prices in all the countries from which Ghana procures its imports. But, as I have previously explained, locally produced food items were responsible to a much greater extent than imported goods for the rising cost of living in previous years. The severe shortages that followed the exhaustion of last year's crop of maize, plantains, yams and other locally produced crops was the principal cause of the sharp increase in the cost of living that has so agitated the whole country during the last few months. Whilst this year's crop production seems very satisfactory so far, Government has to maintain steadfastly its programmes of support to food production in order to ensure that by this time next year adequate supplies will be available and the cost of living will once more be under control.
Housing and Sanitation
121. In the Prime Minister's broadcast on 31st March, he laid special emphasis on the provision of housing for the lowest paid workers. Government has granted loans ofN07.5 million to the Housing Corpora¬ tion and N£7.4 million to Tema Development Corporation to under¬ take the construction of more housing immediately. In addition, Government proposes to mobilise funds from the banks and insurance companies to develop new townships and housing estates for the people.
122. I should mention in this regard that arrangements have been made to put into operationt he factory for the production of prefabri¬ cated houses, which has been under construction in Accra for many years. The Ministry of Works has arranged for a demonstration of low-cost housing which will be opened in November and December this
43 year. The ideas that will be demonstrated in that exhibition, including the successful pilot project recently completed by the T.U.C., are being used to develop the programme for the construction of low-cost houses for workers. ' ' ' Í23. Without benefit of Government help, the members of the lower income groups have provided themselves with housing accommo¬ dation in various quarters, suburbs and satellites "of the main urban centres. Conditions of living in .these; quarter^/have progressively deteriorated with the increase in the numbérs of:peppje inhabiting them. It has therefore been decided to spehdya'substantial^amount of money to provide the basic services of sanitation,'drainage; Water, electricity to such communities as Madina, Nixua, Zongo, Sukula and Bukom around Accra and in the corresponding areas and satellite towns around Kumasi and Sekondi-Takoradi.
Transport 124. In the last two years the working people have been subject to steep increases in the cost of transport, especially for getting themselves to work, their wives to market and their children to schools, due to the steady disintegration of the public transport system. Government has spent a lot of money already in trying to rehabilitate the public transport system. Some improvement is beginning to show, but this is not enough to reverse the continuation and in some cases the intensifica¬ tion, of high transport charges for personal movement in the urban areas. Government proposes to spend the money which it will save on the purchase and running of private cars on a major programme for re-equipping the public transport services. Already 77 buses costing NJZ2.7 million have been ordered for operation in the cities and will be delivered between now and February. Government proposes to purchase another 120 buses in the course of this financial year at a total cost of NJZ4.4 million. We trust that this equipment will be efficiently operated and maintained, so that public service transport will be available at iow passenger rates in all the urban areas to break decisively the present high cost of transportation.
125. It will be recalled that in his address on this matter the Prime Minister announced the reduction of taxes on the importation of com¬ mercial vehicles and buses. This was to ensure that the private operators Of transport would be able to offer reduction in fares and would- not be killed commercially by the strengthened Omnibus Services Authority. An instrument is being promulgated for the establishment .of the National Finance and Merchant Bank. One of its principal responsibili¬ ties will be to provide hire-purchase financing to the private sector for a further strengthening of the transport system, as announced in the budget statement last year.
Development Programme below-the-line 126. As I have said Government has come to rely increasingly on the normal operations and criteria of the capital market to finance those schemes and enterprises which are essentially bankable. In the présent
44 financial year such investments will total some N052 million of which approximately N£20 million will be investment in banks, housing projects, food production and small scale business promotion. The other N032 million will consist of loans granted directly out of Govern¬ ment funds or which Government will guarantee so that the institutions concerned can borrow from the banking system. The monetary measures which I will outline below coupled with the resources that Government had already accumulated in its reserves make it certain that we will be able to finance all these investments in cedis. In some cases, however we shall require supporting foreign exchange in order to carry out the programme. 127. I have spoken about the contributio n which projects must make towards relieving unemployment. It seems to us that one of the quickest ways to put people to work would be to'embark on a massive programme of construction. The use of a programme of public works to ameliorate unemployment is a well known and successful way of dealing, with the problem. We hope that we can mobilise the managerial component that is required to implement a programme of capital construction. We are however, not proposing to carry out a public works programme of the type that consists of digging up holes and filling them up so that peopíe can be given paid employment. Our economy cannot support that kind of unemployment relief. Besides, there is so much to be done in the physical construction of a nation that as many workers as possible should be allocated to a programme of public works at this time to build various facilities for which there is a huge back-log of unfulfilled requirements. 128. I have referred to the housing shortage in the main urban centres and the attendant rise in rents which is placing such a burden on the finances of the lowest paid workers. I have spoken of the conclusion which the Government reached in discussing the recommendations of the Campbell Commission to the effect that without a substantial in¬ crease in the production of food, in the construction of low cost housing and in the provision of public transport, an appreciable increase in money wages would be rapidly nullified by further increases in rent, food prices and transport costs. To help solve this problem of supplying all the basic essential needs and services, our investment programme is designed to make a very large contribution this year. The Food Production Corporation of the Ministry of Agriculture has now mobilised 10,000 people, in addition the National Service Corps is putting 4,000 acres of land in each region under cultivation. The Agricultural Development Bank has a lending programme which would total as much as N£8 million in the coming year compared to its total loans of about N£4 million in 1970/71. All this of course is in addition to the normal expenditure above the line on services to the farmer by the extension services and the Grains Development Board of the Ministry of Agriculture. 129. Among other agricultural activities which will be financed below-the-line, I should mention our contribution to the expansion programme of the Rubber Estate in the Western Region. This will increase
45 from 3,000 to 5,000 acres per year the amount of new }and that will' be pianted annually. The estate companj has also been engaged,to establish a programme for the extention of rubber production by small holders : and this should also contribute to increasing employment oppprtunities in a part of the country where jobs are being lost through exhaustion of mineral deposits. The lending programme of the Agricultural Deve¬ lopment Bank also includes contribution to a large scale plantation for growing cotton which is expected to make a major contribution to employment. 130. For some years plans have existed for the redevelopment of the centres of Accra, Kumasi, and Sekondi-Takoradi. Government has decided that the time has come to start implementing: these plans which, apart from putting a large numoer of people to work in the building of new commercial and office buildings, will also relieve the shortages in properties which have oeen evident in major cities for sometime. The City Centres Development Agency has been set up to serve as a catalyst for mobilising funds from the insurance companies and potential business tenants towards the development of these city centre properties. 1 have already spoken about the company that has been created to take over Government bungalows. On the lands which will be vested in this company, there will be plenty of room tor the construc¬ tion of additional houses. The company will also be given new areas by the Government for development. With Government contributing N065O,OOO, but based principally on the value of its property holdings, which will run into many millions, the company will have access to funds for housing development on a scale very much larger than the N^15 million which are expected to be spent by the State Housing Corporation and Tema Development Corporation for the construction of houses.
131. This battery of building construction programmes is being launched by Government this year in the face of ail the foreseeable financial difficulties because, as I nave said, we have decided not to post¬ pone any longer the launching of a frontal attack on the problem of unemployment. We have great confidence in the ability of the budget, and the.fmancial system of the country, to provide the funds that will be needed. We know there are workers who would like to obtain jobs in this programme who now stand idle. We only have to assure ourselves that the organisational capacity to put these unemployed Ghanaians to work will be equal to the immensities of the task. 132. Because our Government has devoted so much energy and given such prominence to its programme of improving the rural areas and decreasing the disparities between them and the urban areas, we have unwittingly created the impression that we have ignored the urban areas in our development programmes. In fact an objective examination of the pattern of expenditure of Government on water and sewerage projects, on roads, residential and office buildings, and on the construction of educa¬ tional institutions and hospitals, would show that a very large proportion of our budgetary resources continues to be spent on tne development of urban centres. I hope that the magnitude of this year's programme in
46 housing construction, in commercial properties development, and in the improvement of the public transport system will finally remove any doubt that anybody may have had concerning the determination of the Government to develop both the urban and rural areas.
133. This is not simply a matter of developing this place or that, or of allocating so much money here or there. There is a very large social issue involved. The nation cannot be really united, and therefore strong, if within its boundaries it nurtures two communities, two different states, one poor, neglected and rural and the other wealthy, pampered and urban. At the appropriate stage in the debate on the Government's pro¬ gramme for 1971/72, Parliament will be informed in greater detail of the activities that are planned for the National Service Corps. This is one of the institutions on which Government places great reliance not simply for constructing immediately this or that facility which is of great benefit especially to the rural communities, but also in the process of training the young men and women who will be mobilised in the Corps and in this way acquire modern skills for a future as useful members of the community of workers.
134. As I have already stated, the provision of an adequate supply of low income houses, priced so that the average worker can afford such housing, continues to be a major problem confronting the nation. To meet this pressing need a provision has been made of N01.5 million for the RoofLoan Scheme to assist the development ofrural housing. Further¬ more, the prefabricated housing project which was being constructed with a loan from the U.S.S.R. and which was abandoned in 1966, is to be revived. An allocation of NJ21.0 million is included in the projects to be financed from the reserve fund for this scheme in the coming financial year. It is expected that eventually 1,600 units will be produced each year through this project alone. Each unit will consist of a two-bedroom flat with sitting room, kitchen, toilet, and shower facilities and it is proposed to lent such units for N02O.OO per month. 135. The development of Ghanaian entrepreneurs continues to be of major concern to Government. Last year NJZ3'million was made available to assist our small scale businessmen. This year an additional amount of N01.5 million of investment reserve funds will be used for this purpose. The operation of the small scale business credit scheme has revealed that Ghanaian businessmen, operating on a somewhat larger scale, also face financing difficulties. Hence Government has allocated an amount of N£2.5 million for financing such medium scale firms, including rural industries. 136. Finally, the funds collected under the Special Development- Levy, imposed last year on imported rice, sugar, and cement will be used to enable the rice mills to make prompt cash payments to farmers who deliver rice to the mills, to provide funds for the newly created Sugar Development Board, and to assist the local cement industry.
47 Section IV
MONETARY POLICY
137. In a year such as the present one when the yield of taxes will show severe reduction arising from a sudden deterioration in cocoa market conditions it is proper to call on the financial institutions to help in mobilising domestic savings in order to make up part of the deficiency in Government revenues. I said before that the ratio of savings to national wealth has been allowed to fall to unacceptably low levels, so that in any case we require changes in monetary policy that will have the effect of stimulating private savings as well as a fiscal policy that will provide an adequate level of public savings. It will be recalled that last year 1 announced an increase in the rate of interest payable by the Post Office Savings Bank as a first step in the launching of a national savings campaign^ That experiment has had highly encouraging results. Whereas in the three years before that withdrawals exceeded deposits in the Post Office Savings Bank by just under N$2370,000, in the four months follow¬ ing the increase in the interest rate deposits exceeded withdrawals by . some N$2425,000.
138. Based on this experience and other considerations tne time is considered opportune to introduce a thorough going set of measures for monetary reform. With effect from today Bank rate is to be increased from 5^ per cent to 8 per cent. Commercial Banks have been instructed to increase their borrowing rates, in other words the rates of interest which they will pay on savings accounts, time deposits and other forms of deposit, from the present levels of per cent to 3 per cent up to a minimum of 1\ per cent. Commercial Banks will also be required to pay a smáíl rate of interest on the balances which their customers keep on ordinary chequing accounts or demand deposits. Such accounts, on which the.' customer now has to pay service charges, will henceforth carry a small interest yield of 1 per cent.
139: These measures are designed to encourage people to save more of their income and their surplus funds with the commercial banks by making it profitable in terms of hard cash for them to do so. Government has every reason.to believe that individual Ghanaians all over the country have small sums of money which they would like to lay by to meet various needs in the future. Saving these moneys in banks has not hitherto been particularly important or attractive because the interest that could be earned there was relatively low. Now these citizens are being offered a substantial cash inducement to bring forth their money, however small, and save it in a. bank.
140. A co-operative drive to collect-these savings all over the country is being launched by Government and the banking community. It is our firm expectation that substantial additional sums will thereby be collected by the banks and put to use by the Government and the private sector.
4,8. 141. As regards the utilisation of these new savings and other resources of the banking system to extend credit in tne coming year, banks have been requested to give priority to agriculture and forestry, transport, export trade, manufacturing and construction. On the other hand they are being instructed to reduce their lending tò importers and to those who require personal loans for consumption. These measures are intended to go hand in hand with the .extension of a steadily increasing Volume of bank-credit to Ghanaian businessmen. ~
' 142. These changes in monetary policy may noton the surface appear to be of very great significance or immediatè relevance to the financing pf the 1971-72 Budget. But those who are better acquainted, with the technicalities of economic management will readily appreciate that in the long run this reform of the monetary system is. of much greater importance in determining the overall pattern and speed of development of the. economy than the short-term changes in taxation which we may make from time to time.
49 . Section V
REVENUE PROPOSALS
.143. On the basis of existing taxation government's ordinary revenues for the coming financial year are estimated at N0368.7 million. The reduction in revenues from the previous year's collection of taxes 'is principally accounted for by the fall in cocoa revenues of about N0113 million/ However, the actual cocoa revenues in 1970/71 were swollen because of payments of arrears from 1969/70 to the tune of N£69 million. Taking into'account that out of the total current revenues in 1970/71 ;ofN£490 million, N ^80 million was paid into reserves, the net revenues amounted: -to. NJZ410 million. Given the. estimated N£368.7 million 'ordinary revenues at existing rates for the coming financial year, there is a net fail in current receipts of NJZ41 million or 10 per cent. As against this, current expenditures for 1971/72 are estimated N£383.6 million and this represents an increase of NJZ36.1 million or 10.4 per cent. With the fall in revenues and the increase in expenditure the balance of the current account of Government, i.e. recurrent expenditure plus interest payments on puolic debts as against ordinary revenue minus payments into reserves, will worsen from the net figure of a N062.1 million surplus in 1970/71 to a deficit of NJZ17.2 million in 1971/72. In addition to this, allocations for development expenditure above-the-line in the present financial year, as I have said, total 151.4 million. Considering that net capital receipts for 1971/72 are estimated at N065.1 million we have a problem of finding additional funds to the tune of NÇ2103.5 million from new taxation and from additional capital receipts to finance the operations of Government in the next financial year.
50 1. Ordinary revenues .. i
2. Payments into reserves ;
3. (a) Recurrent expenditure, j (b) Interest on internal debt (c) Interest on external deb
4. Balance on current account 5. Development expenditure
6. Cash surplus (-j-) or deficit 7. Capital payments (other thi (a) repayment of internal' (b) repayment of internal (c) repayment of external (d) other capital payment
8. Capital receipts : j (a) internal medium/long- (ib) internal short-term bö (c) external aid sources (ci) other capital receipts
9. Overall Surplus or Deficit (<
1970/71 Provisional Actuals < I ï 490.0 1-i 80.4 2.'
■— 3.
409.6 4. 304.2 5. 31.5 11.8 347.5
+62.1 6. 92.0 7.
-29.9 8. 9. 10.6 15.0 31.1 6.2 62.9 • 6.9 10. 6.9
42.0 33.9
3.3 1.7
87.8 11.
-5.0 12.
Import Taxes
144. As a result of thé measures of liberalisation that , were carried out in the last year imports continued to grow. The liberalisation measures of April, 1970 which were restricted to, basic consumer, goods were followed by a sharp increase in imports of tinned fish; tinned meat, sugar, milk, rice and other items. It was indeed the intention of those measures to break the high cost pf these essential goods to the consumer by increas¬ ing their supply and breaking the power of monopolists and speculators. The measures that were then taken, as well as the previous measures of liberalisation that had been introduced under the NX.C.y were not accom¬ panied by the imposition of additional: taxes to keep the importation of these items under control through the, penalty of a higher pricb. , ,
; "145. The more extensive programme of liberalisation which' was introduced under the last budget was however accompanied by the imposition of surcharges. Even so, as the data which has been circulated to you will show, imports in the six months after the introdactidn of those measures were running at a level approximately 18 per cent higher than the, level of imports in the corresponding period in 1969-70 before the .introduction of these measures • of liberalisation. Considering the volume of pent-up demand, and especially the low level of stocks ofmost commodities, this is not a rate of increase that wouid .be regarded as extraordinary. It is confidently expected that the upward trend lof imports, wilf level off and probably decline somewnat. -The present measures of liberalisation which 1 have announced are also accompanied by the levying of appropriate levels of surcharges on the items involved-1-1 mostly within the range of 5 per cent to 40 per bent. Í ; 1; ; •• ' O
! ,;'S
55' 218.2 114.0 98.2 2-68;. 131.5 91.3 1 114.4 March to■ March '153.5
. ; 1971/ 1970 ■
i Index to: 1 -Oct. 120.4 238.1 117.5 1(N£millions) of . 1969 -0.2 -0'.7 10.0 1,3 2.9 35.4 to,
.to : ' 1969Oct. March 14.4 ! 10.8 . -5.2, March 1970 , 1971/ '1.3 0.8'
19.7 0.9 ^-4.1 2.8 .0.5 0.8 -8.2. 0.5 13.4 to
1-8• . . .-1.3 Changes Imports: Aprilto 1969Oct. March1970 in-Change, Oct.1970Oct. Sept.1970/ 41.3 2.4 6.5 10.9 54.5 5.0 to .41.7 237.9 1970Oct. 1971March 63.8' 10.3■ 1.5i-,
1 ' - ■ 1 2.0, 1.6 2.7 7.7 2.6 ' 46.6 32.5 51.5 215.9 Table . . * ' 14 • to " 1970April 1970Sept. 13.9 54.8
26.9 1.1 5.7 11.1 2.2 31.7 59.7 53.0 9.0 2.1 to 202.5 1969Oct. 1970March ANALYSIS—OCTOBER,IMPORTTO1969MARCH,1971 CommodityGroup Total Mineral articles Foodliveand Beveragesand Crudematerials fuels Animal,vegetable Chemicals Manufacturedgoods Machinery Miscellaneous Commodities,n.e.s.
0. tobacco 2. 3. 4.oils 5. 6. 7. 8. 9. animals 1. fatsand manufactured 146. Numerous representations have been received since laSt yea from one Liierest group after another for the reduction of taxes", on imports. Indeed Government is fully aware that immediate'relief .to. .the high cost of living will be brought about by reducing taxes on imports.. But in the coming year it is estimated that the export revenues that are required to pay for these imports will fall by NJ250 million. This is there¬ fore clearly not the opportune moment for any responsible Government to reduce taxes on imports and thereby to stimulate a high volume of expenditure. On the contrary, the Government must hold itself free, should the balance of trade situation deteriorate unexpecteoly against Ghana, to further, increase levies on imports. This is not a popular policy but it is a necessary policy.
147. Tne further measures of liberalisation that I have mentioned» involve the placing of most of the remaining items of.raw"materials which are now on Specific Licence on the Open General Licence list at appro¬ priate, rates of surcharge. For this purpose I will presently ask Parliamênt to pass the Temporary Surcharge on Imported Goods {Amendment) Bill. 148.- In addition, those items which will remain on the Specific Licences will be subjected to appropriate rates of surcharge so that the expenditure of foreign exchange for importing those items is not made paradoxically less expensive than the expenditure of foreign exchange for the importation of other commodities which have been placed on Open General Licence.
149. A loss of revenues has also resulted from the exemption of Government Departments from paying import duties-and surcharges. The Government has decided to abolish these exemptions, and this decision will be implemented through an appropriate amendment to the Customs and Excise Act. : : : "
Taxes on Other Uses of Foreign Exchange ï 150. We have imposed additional charges on those who utilise foreign exchange for the importation of merchandise. A large proportion of our foreign exchange is also used in. paying for invisible expind.iture obI.iga-, tions of all sorts. In a full year these payments total nearly N£U0Q. million and are therefore an important drain on our foréigti exchange resources. It has been decided to levy some charges on those who use; foreign exchange in these other ways, both in order tò persuade them tor exercise more restraint in such expenditures and also to obtain from th m, some contribution towards the development effort. Parliament is therefore; being invited to pass the Service Payments Allocation Tax Act (1971)'. under the authority of which taxés will be levied on the usage of foreign exchange for invisible transactions. ' - - -- 151. As far as .concerns enterprisés which operate .in Ghana with* cap'tal owned by non-residehts, one of the most .unsatisfàÇtôry'rfesults- óf the balance of p ayments difficulties of the past few years his .been our: inability to allow them to remit the legitimate, profits which hive beëg. earned, by. the owners of this foreign,capital and bn wh^h-the .apprbiymtQ 5% taxes have been paid here in Ghana. It has therefore been decided that with immediate effect and in respect of all remittances of dividends and profits which are earned during and after the financial year starting 1st July, 1971 or during any trading year of any enterprise that ends between 1st July, 1971 and 30th June, 1972, which are presented for transfer and on which a tax of 25 per cent will have been paid, the Bank of Ghana will henceforth guarantee to permit immediate transfer. Remittances of dividends and profits that are earned by non-resident capital will move to the top of the queue for allocation of foreign ex¬ change. It is my hope that with this measure we will have removed one of the most serious difficulties that have hitherto faced foreign investors in Ghana.
152. Transfers of foreign exchange in respxt of business and private travel and for th? payment of commissions, interest and headquarters expenses will also be subject to a 25 per cent allocation tax. Users of foreign exchange for airlines and shipping remittances other than in connection with merchandise imports, for the payment of insurance and reinsurance, for students' remittances and for Ghana diplomatic missions abroad will be subject to a tax of 10 per cent.
153. Taken together, these three measures will yield a total addition óf N036.4 million to the expected revenues from customs duties and import surcharges. Of this sum N015 million will oe paid by Ministries* departments and other units within tne public services.
Vehicle Licences
154. With last year's budget Government was able to make a 50 per cent reduction in the fees that operators of commercial vehicles and taxis have to pay. As of the beginning of April, the 25 per cent import surcharge on commercial vehicles and buses has also been removed. I am glad to be able to announce the decision of Government to go further and to abolish with effect from today the entire system of charging for licences to operators of vehicles. Everybody knows tnat this institution of the so-called "quarter licence" is one that is surrounded with, much vexation for the ordinary citizen, if not with harassment and extortion. Besides, Government has ne\er oeen able to collect the full amount of taxes which could be expected on the basis of the vehicle population. Numerous representations that we have received have convinced us that the motoring public will find it more convenient and acceptaole to pay its due share of the taxes for the building and maintenance of roads and for other facilities which they enjoy through means other than tne "'quarter licence". 155. The most convenient and equitable substitute for the "quarter licence" has been found to be a tax on motorist's fuel. Accordingly, with immediate effect the taxes on petrol and fuel oil will be increased in accordance with the schedules which I will present to you for adoption. The effect of these changes will be an increase óf 8Np, 6Np and 3.5Np respectively in the pump prices of premium grade gasoline, ordinary grade gasoline and gas oil. Together, these adjustments in petroleum
58 taxés will yield additional revenues of N06.12'million in place of the estimated N06.12 million that would otherwise have been collected on quarterly licences. It is the firm hope of the .Government that the drivers and owneis of commercial vehicles will co-operate with government and not take advantage of these changes to increase fares.
156. It will be necessary to retain machinery to ensure that only vehicles that have certificates of roadworthiness, and which are insured as required by law, will operate on the roads. Accordingly, instructions will be issued regarding the nature of the certification from insurance companies which motorists will have to possess before they are allowed to operate their vehicles. I can say now that such certification from an insurance Company will, not be issued except upon presentation of . a certification of roadworthiness given by the official inspectors of govern¬ ment. In view of the need to improve road safety vehicle inspection is to be tightened up.
National Development Levy 157. In this year when Government revenues from cocoa have fallen and at the same time it is necessary and desirable to step up the pace of national development, Government has decided that the most equitable way of sharing the burden of replacing these lost revenues will be to tax all of us; the wealthy and the not so wealthy, everybody who has the opportunity of earning a regular income as an employee or as a self-employed person or as the owner of a corporate business. This will not only meet the demands of equity but will promote our comrade¬ ship in the common task of national development. It will show us that we are all together in times of difficulty as in times of prosperity. It has therefore been decided to levy on all employees, self-employed persons and companies a contribution to our National Development Levy. This levy will oe paid at rates which will progressively increase from a mini¬ mum rate of 1 per cent on the incomes of those who earn less than N01,OOO. Self-employed persons and companies v/ill pay the levy at a rate of 5 per cent on their chargeable incomes. The National Development Levy is estimated to yield a revenue of NJZ7.6 million during 1971/72. I am asking Parliament to adopt the appropriate legislation.
CONCLUSION
158. I said that I was not presenting a popular budget and indeed I have not tried to presexit a populai budget. But I have tried to adopt a set of measures that are in the interest of long-term growth and the good health of the economy and that will be seen by the average person to be equitaole and fair. If we had been using the tactics of some years ago, we would have got some hapless farmers to send telegrams to say "This year, cocoa price has fallen, reduce our cocoa price by N02.OO". We could easily have done that. But we chose not to do that. Instead, among those who are oenefitting by the small improvement that we are able to make this year will be women in the public service who hitherto have had to forego half of their incomes when on maternity leave. It has been decided that now they should go on maternity leave with full pay. 59 .• -159. Far from reducing the incomes of the farmers; and especially of the cocoa farmers, what we arc saying is that those of us' who are better off, who consume imports and use foreign exchange for invisible transaction, who have regular incomës, should pay in-order to keep up tne pace of progress in Ghana. That is why we are maintaining , support for agriculture and our guaranteed prices for cocoa, rice and maize. That is why we are.iricreasing'the supply of planting materials, fertilizers and insecticides to our farmers. This year, with the support of the Government, farmers in every part of this country can rest assured that they will have available, in their own villages, cutlasses at the control price of 65Np.
160." This is the spirit in which we have prepared our Budget. Those of us who speak "Akari will readily recognise the proverb: "Etuo ben a esi obarima bo" and everybody will acknowledge the wisdom in it who has been'brought up in the tradition that believes that one of . the attri¬ butes of manhood is the will to stay in the fight when it was at its bitterest. The proverb says literally "When the gun is hot it is the stalwart who still carries it near his bosom". Let me explain this. Our grandfathers usedj to go to war with home-made guns and after hours of fighting, the guns"would get hot. It was the coward who when the gun was hot dropped it. It is the brave man'who keeps his gun when it is hot. . .*
' * 161. The gun of Ghana is-hot and tne Government of the Progress Party is asking the whole nation to hold steadfast, to go through this temporary period of difficulty. We are sure that once the Progress Party government has carried out its programme of development,, we will come out on the other side a wealthy and a progressive nation. Remarks ft.(IncludesBridge)150span N£ 816,474 818,334 728,541 92,685 Up-to-date Expendturt 1685,106 1,330,966 801,661. 1,557,724 1,199,878 1,165,779.
—
60 40 89£ 55 Approx. miles 50 60i 83 ■ completed 130J 721- PhaseI SUMMARY •••-
40 90 60 72| Mileage 50 60£ 95£ 55 130£ 654-9,197,148641. I—ROADAPPENDIXPROJECTS DECEMBER,JUNE,TO19671969
Totals Region
1. 3. A. 5. 6. 7. 8. Volta9. Upper 10. - Ashanti Western Central Greater Eastern Northern2... Brong-Ahafo Accra .. 30-6-69)(upFeesConsultants-to NC 568,030 331,866 959,639 416,808 457,824 685,734 676,696 1,675,892 323,717 236,129
-- —
52 34 361 681 401 331 391 100 App'rox.- 301■ - IIPhase SUMMARY
46 46 46 44 421 33 ' 84 > 55^ 112 509i;435 .- AUGUST-1970JUNE,1969-TO •- —- 6,332,335
Totals
: Region
~ Upper Western Greater Volta Up-to-dcitemiles- RemarksExpenditureMileagecompleted . Northern Brong-Ahafo■ .. Ashanti Central.. Accra Eastern. .... 30-6-70)(1-7-69FeesConsultantsto — N£ 487,726 164,921 577,722 167,001 211,919 79,352 217,656 9i.l73 165,583■
W
miles —. 7 — 46* 44 Approx. Up-to-date 16 13* 17* 18* 2,081,053164|- IIIPhase SUMMARY —
74 60 98 71 40 33 36 JUNE,1971TO1970AUGUST, 64 16 492
Totals Region
Mileage Upper Northern Ashanti Western Central AccraGreater Eastern.. Volta Consultants RemarksExpenditurecompleted Brong-Ahafo 30-6-71)(30-6-70Feesto APPENDIX 1 S !
ROAD PROJECTS j ;
ApproXi
Miles : Total Com- Expenditure Communities served From To to Mileage pleted , Date
Region—Greater Accra j
• Phase I j NC 1. Bortianor-Kókorbite 0-10 10 ! 10 ! 163,233 2. Amasaman-Okushibuade 0-8 8 8 1 ; 102,560 3. Amasaman-Odontia 0-6 6' 6 ' 82,039 4. Amasaman Junction-Amahia 0-4 4- 4 ' 55,159
5. Old .. : Ningo-Nyibenya .. 0-7 7; 7 ! 119,500 6. Ayikuma-Doryumu 0-6 e\ 6 ! 80,402 7. Agave-Sokpöe : 0-9 9 ! 120,872 8. Kitase-Breküso 0-5 5j >:5 1 77,896 Phase II
9. Torkuse-Domiabra-Obon 0-26 26 ! 26 j 327,566 10. Prampram-Goi and Sege-Anyaman 0-29Í 29} 26 ; 349,130 11. Dawà-Lekpongono 0-8 8 4 ; 43,552 12. Agogba-Abokobi-Oyarifa 0-8 8 1 3 ! 35,800
Total 126} 114 ; 1,557,709
Central Region ! Phase I 1. Atabadzi-Ekutunase 0-14 14, 13}i 254,498 2. Dunkwa-Twifu Praso 0-48 48 48 ' 745,451
3. Essiam-Manso 1 .. 0-17 17 17 ; 187,176 4. Odobèn-Brekum-Kokoso 0-11 11 : 11 ; 143,841 !| Phase II 1. Assifl Nyankomase-Sienkyem 0-22 22 ' 19 ■ 389,633 2. Bontrase-Gyeikrodua 0-8 s ; 8 •' 121,779 3. Bawjiase-Papase-Oduponkpehe .. 0-12} 12}' 12};( 174,322
1 . Phase JII 1. 0-9 9 Jakai-Kruwa-Nyamebebu ; 3} 45,356
2. Queen Anne's Point-Ekon 0-1 . ï : 1 11,826
3. Peteduasi Junction-Fetteh. ' 0-6 6 . 4' 55,682
4. Beseáse-Anyinase-Manso .. .0-9 9 9 . 101,055 5. Abodom-Gomoa Eshiem (Mozana)- ; : Hasowodze i" .. . v 0-8 8
; . N ' Total vi • ... ;.-. 165} ■ 146} 2,230,619
64, APPENDÍXI—contd.
Approx. Total Miles Expenditure Communities served From To Mileage Completed to Date
Phase I N^: 1. Daboasi-Krobo 0-4 4 4 2. Asankrangwa-Humjibre .. 0-34 . 34 34 590,679 3. Dompim-Kanso .. •• •.. - 0-2 2 2 ■ ' 40,335
Phase H 4. Atieku-Anyinabrem-Daboase
.. Krobo .. . .: 0-35 35 '261 367,698 5. Benso-Bonsaso 0-11 11 7 90,126
Phase III
6. — Boinso-Asemkro-Nkwanta 0-23 23 — 7. _ Wassaw-Akropong-Oppon Valley 0-17 17 . —
Total 126 731 1,088,838
Brong-Ahafo
Phase I
1. Atebubu-ICwadjokrom 0-35 35 35 421,667 2. Atuna-Bibianiha 0-10 10 10 159,138 3. Sunyani-Tainso ...... 0-15 15 15 237,529
Phase II 4. Jema Junction-Ofuman-Wenchi .. 0-24Í 241 14 215,232 5. Goaso-Noberkaw-Sankore 0-28^ 281 281 367,330 6. Sunyani-Acherensua 0-31 31 26 377,077 7. Sunyani-Tainso-Akrobi Í5-46Í 311 20 238,622
Phase III 8. Tuobodom Adutwie-Ofuman 0-14 *4. 101 137,673 9. Yamfo Junction-Yamfo-Tepa 0-21 21 187,427
10. — Duayawnkwanta-Techimentia-Dorma 0-12 12 —, 11. Adamso-Bawda-Sisala-Asempaneye 0-5 5 . 12. Amoma-Prampeso 24-281 4 —■ 13. Bibiani-Abofrim-Anwiam 0-14 14" • ï 14,000
... _ . --Total - ...... i .— .... 2451 1721 2,355,695
65 APPENDIX l^-cohtdi
•; - ' ' • Approx. , •• Total Miles Expenditure Communities served ' From To Mileage completed to Date
Northern Region
Phase I 1. Tarriale-Tampiong 0-15* 15* 15* 191,274
2: Salaga-Bimbila (+ Bridge) 0-45 45 45 . 624,302
Phase II • \ 3. Yendi-Saboba 30-45 15 6* 68,309 0-31 31 30 4. Busunu-Daboya .. 263,557
Phase III
5. Tamale-Tampiong-Karaga-Pigu.. 15*-75* 60 16 164,921
Total 166* 113 1,312,363
Upper Region
Phase I
— 14 14 •1. Garu-Worenyenga .. 177,777 2. Bulenga-Yala — 28 28 420,566 3. Tappo-Kaleo — 8 8 86,763
Phase II 4. Nandawli-Donweni-Lissa 0-27 27 ' 27 443,392 1 5. Fian-Kojopere-Wahabu 0-7 7 _ 124,638 6. Lissa-Nandom 0-12 12 — .7. Fian-Kojopere-Wahabu 7-31 24 24 282,095 8. Sambrungu-Zoko-Sherigu 0-10 10 6 71,461 9. Worinkongo-Tango 0-5 5 2 21,700 10. Mile 21 (Bawku-Garu Rd.)-Bugri 0-3 3 1* 18,903 11. Garu-Worekambo Market 0-5 5 5 74,505 12. Kaleo-Jang 0-6 6 5 65,983 13. Lawra-Doori-Jirapa 0-15 15 3 32,329
Total —. 164 123* 1,820,112
Phase I 1. Kpandu-Alavanyo-Wegbe 0-20 20 20 429,607 2. Jasikan-Borada-Hohoe 0-22 22 22 285,881
3. Sokode Etoe-Agoriku-Pore 0-30* 30* 30* . 484,590
Phase II 4. Kpandu-Abotoase 0.33 33 30* 323,717
Phase III 5. Nkwanta-Dutukpene-Dumbai 0.31 31 1 10,397 6. Takrabe-Jasikan 0.5 5 9,173 * ,
Total — 141* 104* 1,543,365
66 APPENDIX I—contd.
. - Approx. r.., . Total Mileage -Expenditure Communities Served From To Mileage Completed to Date
Ashanti
Phase I N0 1. Juaso-Obogu-Ofoase 0-21* 211 211- 371,808 2. Brofoyedru-Nsuaem-Ofoase 0-17* 171 141- 172,060 3. Nsuaem-Achiase 0-9 4. Nsuta-Kwaman 0-9 9 9 92,782 5. Bekwai-Abodom-Kokobin 0-131 131 10 161,348
6. — Bekwai-Jacobu-Besease (+Bridge) 0-24 24 — 7. Bekwai-Jacobu-Mile 9-Hia 24-25 1 — __ 8. Ejura-Babeso-Nokwareasa 0-10 10 61, 68,061 9. Kokote-Wawase 0-11 11 101 101,268 10. Anansu Junction-Aframso 0-171 171 171 180,417 11. .. Jamasi-Boanim-Dom© 0-6 6 . 6 66,942 12. Dompoase-Adokwae 0-6 6 2 25,009 13. Mamponten-Kenyasi-Ajumakese- Antoa 0-18 18 3 - 32,330 14. Ahwerewa-Npatiiam 0-6 6 1 . .. 15,988 15. Konongo Dwease-Praso .. 0-9 9 5 " 62,611 16. Nkwanta-Brengo 0-3 .-3 . . "" 1 I 12,546 17. ' Abankwame—Praso 0-lp 10 -11 18,517 18. Bomfa Junction-Asiwa-Nyenase-.. 0-19 19
•
19. .. — Kumasi-Barekese .. 0-141 141
20. — Kumasi-Kuntanase 0-19 19 —
2351 109 . .1,381,687
Eastern Region
Phase I
"" 1. Asesewa-Kumakuma :. — 8i 8*. - 123,403 2. Asesewa — .. . Anyaboni-PaWpäwnya 14i 14*: ,. 149,600 3. Asesewa-Awasu-Sekesua-Brépon- -- '
, •— ' su-Timber Junction . 23 * 23 •'
■ >399,365 ' 4. P.W.D. — Feeder Road Unit 84* 84* 885,356 ' 5. — Hweehwee-Onyimso ;. 13* 9 130,110
6. — Abetifi-Hweehwee-Daaku 12 12 192,161 7. Kwahu Tafo-Oframase-;Miawso .. 24 24 8. 349,086 Kraboa-Coaltar-Oworam 5 5 178,170 9. Suhum-Asamankese — 17 . 17 449,375 10. — Osonson-Sutawa-Nobi-New Tafo 9* 9* 150,390 11. — Abompe-Osino-Fenkyeneko/Asaman 17 17 225,000
12. — Achiase Railway Junction-Aperade 6 2 26,718
13. — Kesseh-Kadza .. , .. 3 1 13,259 14. — Nankese-Supresu-Akorabo 8 8 86,247 15. Afosu-Amenam-Pragya- . ! 3* 1 12,003 16. .— Kwahu Tafo-Oworoborig-Begoro 20 3 37,319 17. .— Kwaben-Akyem Akropong ' 12 3 23,371 18. — Asafo-Agyapoma-Maase ' 6 H 18,739 19. .— Sutapong-Agogo Village 4 —
20. — — Bepong-Kayera ...... 9 —
Total .. 300 243* 3,449,672
67 APPENDIX II
WATER BUDGET 1968/72—LIST OF COMMUNITIES
1968/70 1970/72 Upper Region 1. Nator 1.. Jirapa . . 2. Paga/Nkota. 2. Dafiama 3. Lambusie 4. Gwalu. 5..ßinduri 6. Pusiga 7. Chiana 8. Sherigu 9. Chuchuliga.
Northern. Region 1; Damongo 1. Nyankpala-Tòlon '2. Wulendi 2. Saboba/Pion 3. Nalerigu/Gambaga 3. Daboya 4". Gushiégu. 4. Chereponi 5. Diari.
Brong-Ahafo -Region XlNehiraaJ_ 1. Offaasi 2. Goaso 2. Gyeda/Ntrotso 3. Nkòranza 3. Akrodi 4. 4. Tanoso Prang . 5. Bechern 5. Odumasi 6. Bomaa 6. Nkaben 7.: Aheasi. 7. „Tinijini 8. Sampa 9. Adamso 10. Badu 11; Japekrom 12. Techimaniia 13. Dwamo 14. Duayaw-Nkwanta 15. Acherensua 16. Hwidiem 17. Kenyasi No. 1 18. ïCenyasi No. 2 19. Nsoatre 20. Tuabodom 21. KwameDanso 22. Yeji.
68 APPENDIX ll—çontd.
1969/70 1970/72 Eastern Region 1. Pramkese 1. Akim Swedru 2. Akoasi 2. Nkawkaw 3. Aboabo 3. Kade 4. Asene 4. AnumBoso 5. Ntronang 5. Akropong 6. Takorase 6. Apedwa 7. Akim Oda 7. Nankasi 8. Ofuasi 8. Akim.Wenchi 9. Begoro 9. Jumapo 10. Asamankese 10. Adukrom 11. Asesewa 11. Manfe 12. Kibi 12. Obosomasr 13. Mepom 13. Tutu 14. Kusi 14. Abomoso 15. Anyinam 15. Akwamufie 16. Kwabeng 16. Osenase 17. Osino. 17. Ayiribi ' 18.'Präsu-Amuana 19. Boaduaa.
Ashanti 1. Asamang 1. Chichiwere 2. Efiduasi 2. Jamasi 3. New Edubiasi ' 3. Agona 4. Juabeng 4. Wiamoasi 5. Tepa 5. New Offinso 6. Nyinahin 6. Nkenkenso 7. Obogu 7. Juaso
8. Bompata ., S.'Foase/Rahouan.
9. Fomena . .. , 9. Achiasi 10. Nsuta-Beposo 10. Ofuasi 11. Kona 11. Akrofuom. 12. Dompoasi.
Western 1. Yakase 1. Prestea 2. Dompim 2. Akropong 3. Sefwi Bekwai 3. Aboso 4. Asawinso 4. Bogoso 5. Blubo. 5. Anyinaso 6. Awaso 7. Mpohor 8. Asafo 9. Tikobo 10. Atuabo.
69 APPENDIX 'Ii—cont'd.
1968/70 1970/72 Volta
1. Abor • 1. Tsiame 2. Afiadenyigba 2. SovieDzigbe 3. Nsuta-Buem 3. Poase Cement 4. Agbozome 4. Denu 5. Avoeme 5. Alavanyo 6. Nkonya-Ahenkro 6. Logba Alakpeti 7., Tsito 7. Nkwanta: 8. Papase 9. Ahamansu 10. Kwamekrom.
Greater Accra 1. Old Ningo 2. New Ningo 3. Prampram 4. Kpone 5. Abokobi 6. Pokoase.
Central
1. Ekrajo .- > • 1. Ayamfuri 2. Esakyere 2. Diaso
3.. Brakwa 3. Odoben • 4. Asikuma 4. Twifu-Praso 5. Kuntanasi 5. Mumford 6. AburaDunkwa 6. Apam 7. Nkrem 7. Besease 8. Kini. 8. Abrem Agona 9. Tantum 10. Obuasi 11. Afransi 12. Ekwamkrom 13. Kwaman.
GPC/A128/1.600/7/71-72