Government taken proactive policy actions to address risks

By Patience A. Gbeze, GNA
Accra, Aug. 23, GNA - Mr Seth Tekper, Minister of Finance and Economic Planning, said the government has since 2015 taken proactive policy actions to address the various emerging risks in the economy.

He said world-class technical partners are fixing the technical issues that disrupted oil production at the Jubilee Field, which has resulted in two field production, storage and off-loading vessels (FPSOs) and two oil production fields are in place in 2016 as against only one in 2015.

He said average daily production from Jubilee in 2016 hovers around 74,000bbls per day and the normal oil production level from Jubilee is expected to begin early 2017.

Mr Terkper, speaking at his turn at the Meet-The-Press series in Accra, said TEN Field would come on stream in the third quarter of 2016 to balance production levels, while Sankofa would start production in 2017/2018.

He explained that work is being done in phases for production to continue at reasonable levels.

One Electrical Power Supply disruption, he said, short-term (emergency) and longer horizon power projects are being implemented to generate capacity increase and dependable power against peak demand doubled.

He said energy mix were adjusted to reduce reliance on water levels at dams, leading to thermal capacity build-up to replace unreliable hydro and reducing hydro contribution from 58 per cent to 27 per cent to mitigate reduced dam water levels.

'Domestic gas production was encourage to mitigate supplier risk and this contributed to gas now being produced in-country at Atuabo Gas Plant,' he said.

Mr Terkper said tariffs were also adjusted to market rates to make the industry attractive and to improve recovery levels and has resulted in more than 82 per cent of the Ghana's population connected to the national grid, while 59 per cent increase in tariffs with subsidies eliminated.

He said the government has put in place policy action to revamp Medium Term Debt Management Strategy in agreement with IMF as well as continued focus on fiscal consolidation and expenditure control.

Others include stricter oversight of State-Owned Enterprises (SOEs), subsidies eliminated and centralise revenue and special levels collection with SOEs debt repayment prioritised.

He noted that the Ministry is working actively with the banking community to restructure and repay SOE debt in a timely fashion to avoid contagion or systemic risks.

All these policy actions, he said, have led to significantly lowering of fiscal deficit with near positive primary balance to allow new borrowing requirement lower and pace of debt growth drastically slowed alongside focus on debt repayment.

'As a result, most borrowing activity now targeted at refinancing to elongate tenor and reduce. It also demonstrate track record in the Eurobond market with ability to manage liabilities and smoothen the repayment profile.

'Sinking fund was set up to set-aside dollar income for debt redemption; funds being collected from the special energy levies and will be used to repay SOE debt,' he said.

Mr Terkper said an agreement in principle has been reached with banks to restructure SOE debts and also efforts are underway to increase tax revenue and the domestic debt market is being deepened with focus on debt sustainability.

In the area of election related event risks and overspending, the Minister said, high level political commitment to fiscal prudence with hard choices such as wage bill caps, tariff increases and subsidy elimination is being implemented to eliminate non-budgeted expenditures.

Similar prudent policy actions are taken to ensure growth and government earnings as well as macro performance.

Mr Emmanuel Kofi Buah, Minister of Energy, said with the latest discovery of the new oil field at Tweneboah Enyenra-Ntommre, it would boost the country's gas production as well as manufacturing of fertilizer for the local farmers.

He said that would give the country more gas to power the energy generating plants to solve the current power outs that the country is facing.

GNA