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Business and Economics

Goverment to address short-term vulnerabilities

Accra , Nov. 19, GNA – Government is committed to address the short term vulnerabilities that the economy faces to safeguard the nation’s bright medium term prospects for strong growth and job creation.

Accra , Nov. 19, GNA – Government is committed to address the short term vulnerabilities that the economy faces to safeguard the nation’s bright medium term prospects for strong growth and job creation.

“Our goal for the medium term is to progressively reduce the fiscal deficit to 3.5 per cent of GDP by 2017,” Finance Minister Seth Terkper told Parliament on Wednesday while presenting the 2015 budget.

    He said the reduction would be driven mainly by improvements in tax policy, revenue administration reforms, and improved management of public funds, expenditure rationalisation, and the implementation of new debt management strategies.

   The Minister said government would continue to implement the on-going expenditure measures that under its Home-Grown Policy, including Government’s fiscal stance to negotiate public sector wages within budgetary constraints to ensure the sustainability of the Single Spine Pay Policy.

   Government is also mindful of the signal and pressure that public sector base pay could have on the private sector’s application of the minimum wage.

    He said despite the benefits of the new salary scheme, it was the cumulative overrun in the wage bill of more than GH₵ 1.9 billion in addition to more than GH₵ 3 billion overrun in arrears for three years in a row that prevented government from paying all its obligations on pensions, contractors and expenditures to run government services smoothly.

   As noted, however, this was worsened by factors such as the gas supply disruptions and fall in gold and cocoa prices, the Minister said.

   The Minister said government would continue with its policy of net freeze on employment into all sectors of the public services (excluding education and health) and non- replacement of departing public sector employees in overstaffed areas.

    In addition, government would continue to implement the existing price adjustment mechanisms for utility tariffs and fuel prices which had helped to eliminate the spectre of long queues for fuel.

   “As the gas supply situation improves, we expect that consumers will also see the benefits of the utility price adjustments,” the Minister said.

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