KUFUOR SHOCKS •With $1billion

As the world suffers from the pangs of rising food and fuel prices, President John Agyekum Kufuor will tomorrow, in a nationwide broadcast, unfold a $1billion package to mitigate the debilitating effects of the anomaly on Ghanaians.

The package will be coming a few days after a Cabinet meeting he had summoned to deliberate on the unsavoury economic developments, which have impacted negatively not only on the real incomes of Ghanaians but the entire national budget.

The meeting had promised a Presidential intervention to rescue Ghanaians from the global tragedy, which had sent citizens of some worst affected countries to the streets in demand for palliative measures from their governments.

DAILY GUIDE has learnt that among the measures to be unfolded would be the removal of certain taxes on petroleum products as a way of reducing the prices of crude oil derivatives such as petrol, diesel, kerosene and LPG among others.

Also included in the special package is a subsidy on some staple foods and fish, the paper has gathered.

President Kufuor's delivery tomorrow would therefore be making good the promise that government is not insensitive to the plight of Ghanaians after all, in the face of biting global recession.

Rice, whose phenomenal price increase on the world market has been a topic of discussion in the international media and forums, would also receive a Presidential intervention in tomorrow's delivery, as well as other essential commodities by way of tax waivers and the like.

In some countries like Haiti and Argentina, the price of rice has increased almost three-fold, triggering national security problems for these governments.

The price of an average bag of Thai Rice, which used to be GH¢32, taxes inclusive, has suddenly appreciated to more than GH¢50, plus the mandatory taxes, according to a source at Finatrade, a major rice importing group in the country.

The tax components include the National Health Insurance Levy (NHIL) and the Value Added Tax (VAT).

When these are reduced or waived as the Presidential intervention is expected to do, the price of this important Ghanaian staple food would be reduced remarkably.

Wheat, which has suddenly shot up bringing the price of bread to an unacceptable level, would also get reprieve.

A statement emanating from last week's emergency Cabinet meeting on the sagging world economy had assured Ghanaians that it would not be long before government announces relieving measures.

The statement, signed by Stephen Asamoah-Boateng, Minister of Information and National Orientation and issued after the emergency meeting, assured Ghanaians that government was not oblivious of the harsh economic developments.

The fluctuating price of crude oil has thrown asunder fiscal projections of government, leaving the National Petroleum Agency (NPA) with no option but to increase prices of petroleum products intermittently.

Commuters and motorists are feeling the painful effects of the rising prices of petroleum products as they face incessant increases in fares by the Ghana Private Road Transport Union (GPRTU) and other transport bodies.

In its first quarterly report for 2008 on the state of the economy, the Bank of Ghana Governor indicated that although the economy had posted impressive records, it nonetheless suffered from the external shocks of a sagging world economy.

The Cedi, which had held its head above water for a long time, maintaining a stable exchange rate with convertible currencies like the dollar, suffered a 1.8 percent depreciation between January and April, according to the Central Bank's report, as a result of the rising prices of crude oil and food.

Despite the external shocks, Dr. Paul Acquah has maintained that available figures point at a resilient and robust economy.

But for the aforementioned resilience and robustness, the economic pinch could have been worse, experts have said.

Unlike other countries, the prices of food items have not witnessed outrageous increases in Ghana.

The prices of rice and flour, for instance, have appreciated marginally.

In the case of flour, the price hike has been prompted by a fall in supply of wheat, which have been attributed to an adverse weather pattern in wheat producing countries.

The spiral effect of a rising crude oil price which has hit its highest level in recent times-$126 per barrel- is one of the most urgent issues on the agenda of the UN whose Secretary-General, Ban Ki-Moon has called for a concerted action to contain the situation.

Non-oil producing countries are the most hit by the rising petroleum product prices. Saudi Arabia has declined a US request to increase production as a way of stemming the runaway price rise, saying that they have already done so by 3 percent.

There is a discordant position on the causes of the rising prices of rice and other cereals across the world. While some point at the competing demand for land for the cultivation of bio-diesel like jetropha as a cause, others think it is the diversion of rice and other cereals for the production of ethanol as a substitute for fossil fuel which is responsible.

Tomorrow's Presidential intervention, it is expected, would go a long way in stemming the economic travails being felt by Ghanaians.

By A.R. Gomda