Today’s Business Headlines ahead of Budget Statement for 2016 by Seth Terkper

Seth Terkper presents 2016 budget today

Ghana’s Minister of Finance, Seth Terkper, will today appear before Parliament to present the 2016 budget and economic policy statement.

Finance ministry officials have hinted the financial statement for next year would focus particularly on the energy sector, considering that government has secured the World Bank’s Partial risk Guarantee (PRG) to support investment in the Sankofa Gas Fields.

Officials say private investors are in the market to raise the necessary funds for the project.

Since it is going to be an election year, President John Mahama has given the assurance his government will not overspend in order to keep the economy on its healing track.

He said usually there is the tendency to overspend during that period but his government remains focused to ensure the IMF conditionality of maintaining fiscal discipline is met.

Meanwhile, the International Monetary Fund (IMF) has given Ghana thumbs up for working within the scope of its bailout plan after its second review.

A team from the International Monetary Fund (IMF), led by Joël Toujas-Bernaté, visited Accra from October 21–November 5, 2015, to conduct discussions on the second review of Ghana’s financial and economic programme supported by the IMF’s Extended Credit Facility (ECF).

Economists predict austere 2016 budget to shore up confidence in economy 

Renowned Economists have predicted that Friday’s budget presentation by Finance Minister Seth Tekper would contain austere plans.

Economist Prof Peter Quartey says he expects Friday’s budget presentation to contain austere plans to shore up confidence in Ghana’s troubled economy.

According to him, although austerity plans in 2016, an election year, would cause major discomforts and even make government unpopular, it is the right thing to do.

“For me the anticipation [for the 2016 budget] would be an austere one. A budget that would ensure that we cut our coat according to our size; that we would not overspend so that we use the rest of the year to clean up the mess,” he said.

Prof Quartey

Prof Quartey was speaking Thursday on current affairs programme, PM Express on the Joy News channel on Multi TV.

Finance Minister Seth Terkper will present to Parliament how government intends to manage Ghana’s economy next year as the country goes to the polls.

The governing National Democratic Congress has been criticized by minority MPs for over-spending in the lead-up to the 2012 elections. However, government is expected to ensure extreme fiscal discipline next year to ensure the country’s economic crisis does not worsen.

Dr Joe Abbey

He said although there may not be clear austere pronouncements in Mr Tekper’s 2016 budget presentation, austerity could still come by way of inflation tax.

He said this hidden tax would be borne automatically by Ghanaians if government decides to print more money to mask austerity.

adb lays off 14 management staff

The agricultural development bank (adb), as part of plans to review its operations, has implemented a new management organogram that has led to the merger and re-alignment of certain managerial positions in the bank.

As a result of these changes, the initial phase of the restructuring has seen the displacement of 14) Management staff who have been exited as per the policy of the bank and within the acceptable labour laws of the country.

Affected workers have been compensated with packages.

A statement issued by the bank on Wednesday said the restructuring was based on a thorough evaluation of the company’s structure and strategic objectives.

According to the Management of the bank, the decision was taken earlier this year at a Management retreat in Akosombo involving  stakeholders and was given approval by the Board for implementation, since it is aimed at ensuring growth, strength and sustainability of the bank moving forward.”

“We are in a very competitive market and there is the need to re-align our operations and strategic objectives to remain on top as one of the best performing indigenous banks in the country.”

Inflation records no change in October

Ghana’s inflation rate for October 2015 was 17.4 percent, the same as recorded in September 2015.The monthly change rate was however 2.7 percent for October compared to – 0.1 percent recorded in September this year. The food and non-food inflation recorded inflation rates of 7.8 and 23 percent respectively. The main “price drivers” for the food inflation rate were Vegetables (13.6%) and Mineral water, soft drinks, fruit and vegetable juices (8.5%). The rate for the non-food inflation was mainly influenced by; Recreation and Culture (29.9%), Education (28.8%), Transport (25.7%), Clothing and Footwear (24.5%), Furnishings, household equipment and routine maintenance (24.5%) as well as housing, water, electricity, gas and other fuels (23.1%). 

World’s largest passenger plane unveiled

Emirates has found a way to fit 98 extra seats into its new Airbus A380-800 planes: by doing away with first class.

The Airbus 380 is already the world’s largest passenger plane. But with no first class seats, a smaller business class and an extra 130 seats in economy, Emirates has managed to fit in even more passengers without losing any legroom in cattle class.

The two-class plane now has 58 seats with flatscreen TVs that recline into bed in business class, and 557 economy class seats. There is also an onboard lounge. 

Promoting eCommerce in Ghana: Operators appeal against tax increases

Operators of electronic transfer systems in the country have made an appeal to the Finance Ministry not to consider increasing taxes charged on their operations. They argue that any such move will impede the growth of Ghana’s e-commerce platforms which they describe as a growing one. The call was made by the players at this year’s Ghana e-commerce expo on the theme, “Unleashing Ghana’s online potential”. A participant in an interview with Citi Business News said, “I think they have to look at tax systems on financial services, currently if you look at the tax systems on the financial services, you will see that customers will have to pay, the taxes should be reduced( not scrapped) so as to encourage a lot of people to send monies because these days it is quite expensive.” The Event Director of OML Africa, organizers of the conference, Paul Asino on his part described the current legislation on e-commerce as out of date and called for their amendment to meet dynamic needs of businesses. 

‘$2.2bn needed to bridge housing deficit’

About $2.2 billion is needed to address the housing deficit in Ghana and this could be achieved only through private-public partnership, Alhasan Andani, Managing Director of Stanbic Bank Ghana, has stated.

Mr Andani, who was speaking at a ceremony to cut the sod for construction of the SKYVILLE premium apartment project at the site of the former Shangri-La Hotel yesterday in Accra, said government alone cannot provide the 1.7 million housing units, adding that the country needs 170,000 houses a year to bridge that gap.

The SKYVILLE Premium Apartment Project estimated at $200 million is a 297 multi-purpose apartment project.

It would include residential homes, exclusive branded shops, restaurant, cafeteria, fitness center, swimming pool and state-of-the-art Kassardjan office complex.

The project, initiated by KO&G, a Korean firm together with Ghanaian development firm Armen Kassardian, its strategic partner, spans a 150,000 square meter land at the former Shangri-La Hotel.

Gov’t must stop borrowing to pay debts – ISSER

As Finance Minister Seth Terkper prepares to present the 2016 budget to parliament this morning, the Institute of Statistical, Social and Economic Research (ISSER) has admonished government to stop borrowing to pay debts. 

ISSER is worried about government’s recurrent expenditure which it says it is not sustainable in relation to the gap in revenues.

Ghana’s budget deficit in the 2015 revised budget was pegged at GH¢9.7 billion, equivalent to 7.3 percent of GDP as against the earlier estimate of GH¢8.8 billion, equivalent to 6.5 percent of GDP. 

According to ISSER ‘ahead of the budget presentation, many are looking forward to government’s planned spending especially since 2016 is an election year.

Will expenditure overshoot revenue? Elections years in Ghana have become known for huge financial irresponsibility.

It’s only in 2004 which despite being an election year, some fiscal discipline was maintained.

This has been attributed to the HIPC initiative.

With about a year to the 2016 elections could the IMF bailout help ensure fiscal prudence?’. It queried.

Pension Trustees hail transfer of Tier-2 pension funds

The two companies whose pension schemes have received the first transferred funds from the Bank of Ghana have described the development as timely not only for their respective operations but the industry as a whole. The companies are Petra Trust and Axis Pensions Trust.Out of the 27 licensed Trustees, only these two have so far received some of the Tier-2 Pensions contributions in the Temporary Pensions Fund Account, TPFA for onward investments on behalf of their client-companies.

MD of Petra Trust, Kofi Fynn explained to Joy Business they are expecting more. “The schemes fall into two different categories. You‘ve got stand-alone schemes where a company sets up its own scheme and a Master Trust scheme that has a number of companies that are part of that scheme. The flow we got was for a stand-alone scheme for a private company that we manage and what we are looking forward to is to begin getting the flows in the Master -Trust. In the Master-Trust Schemes we are talking about thousands of companies and that’s where the real bulk of numbers of people are and like I said, this is just the beginning. The amount we got even though symbolic compared to the entire amount of the TPFA was quiet small,” he said.

SSNIT takes over Asokore-Mampong housing project

Ministry of Water Resources, Works and Housing has handed over the Asokore-Mampong affordable housing project that has stalled for the past seven years to the Social Security and National Insurance Trust (SSNIT) for completion.

The project, which is expected to be completed in 18 months, will add close to 1,200 housing units to the national housing stock.

Although the original target of the project was 1,500 apartments, it was scaled down to 1,200 due to financial constraints.

When completed, there will be 389 one-bedroom flats, 736 two-bedroom flats, a police station, 52 stores and other social amenities.

At a ceremony to hand over the project to officials of SSNIT at Asokore Mampong yesterday, the sector Minister, Dr Kwaku Agyemang Mensah, gave squatters who had taken over the place a month’s ultimatum to vacate the place to pave the way for the contractors to move to the site.

He warned that those who would fail to move out within the period of grace would be forced out.

He also appealed to the traditional authorities, the security services and the Ashanti Regional Coordinating Council to ensure that the squatters left the place on time for the contractors to start work.

The Director-General of SSNIT, Mr Ernest Thompson, said with 30 years’ experience in the provision of affordable housing, the Trust would use the same business management procedure adopted for the Borteyman project on its latest task.

Credit: Joy Online. GNA, Citi Online, Graphic, Daily Guide