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10.01.2007 Business & Finance

Divestitures to pump in 338 billion cedis

By : GNA
Divestitures to pump in 338 billion cedis
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Government on Wednesday said it expected to rake in 338 billion cedis from the divestiture of the Tema Oil Refinery (TOR), Ghana Oil Company (GOIL) and the State Insurance Company (SIC) this year.

This formed part of the total sum of 0.7 trillion cedis expected from overall divestitures this year.

The divestiture of the three enterprises, which have been on the drawing board over the last four years, would be done through the Ghana Stock Exchange (GSE) by the second half of this year.

The news is a welcome one since industry players and practitioners have over the years bemoaned the slow or no show in government promises to divest its holdings in a number of state owned enterprises.

Contacts at the GSE showed an upbeat mood on the government promise and said: taking a cue from the 2006/7 budget and the special purpose vehicles set in motion on implementation, we are sure that it would come to pass.

The source also said it was preparing a document in collaboration with the Ministry of Finance and Economic Planning on a comprehensive divestiture process for the country.

Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning said while giving the outlook for 2007 that a number of divestitures would be coming up this year.

On revenue generation, the Minister said they were set to raise 18.25 trillion cedis by June and that revenue agencies would have to wake up and be diligent in their collection processes.

Mr Baah-Wiredu however, noted that government was going to review downward the 2.6 trillion cedis total exemptions granted in 2006.

It hoped that the other half of the year would bring in a similar amount to shore up expected loans and grants of 6.0 trillion cedis, and 9.0 trillion cedis respectively from Ghana's multilateral donors.

Mr Baah-Wiredu said to raise the amount, government was looking forward to ensure that all the revenue agencies doubled their work rate to generate the 37.5 trillion cedis or more of the total target from the domestic front, albeit with spending target of 54.3 trillion cedis.

The difference of 16.3 trillion would come from grants and loans, lotteries (0.1 trillion cedis) and others (1.2 trillion cedis).

"This we will do through constant scrutiny of the various revenue agencies and a way of making sure that those listed to pay taxes and revenue to the state do so and regularly," he added.

Giving the expenditure breakdown, the Finance Minister said personal emolument is estimated at 13.2 trillion cedis; 3.1 trillion cedis for administration and 2.6 trillion cedis for pensions, social security and gratuities.

The Finance Minister said that he was not happy that even though the Registrar General's Department had registered about 170,000 business operators, only 50,000 of these are reflected in the Internal Revenue Service books.

"This situation must change and consequently I have directed a coordinated system between all the revenue agencies that would enable one to know what is going on as far as the financial obligations of registered business are concerned. By this, any of the revenue agencies can easily tell at the click of a button to know who is doing what."

Mr Baah-Wiredu indicated that government was expecting funds from the HIPC Initiative, MDRI, MCA as well as programmes and projects, while pulling in domestic and external loans.

Government is also keen on generating substantially from the Ghana five-year Bond, which is to reduce the pressure on government funds.

On the recent salary agitations, the Minister said the response given to the situation in the health sector indicated that there was immense room for improvement, "but we must work at ensuring job evaluation and effecting quality service by workers for money."

Source: GNA

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