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2011 Budget to focus on oil and gas

By Kofi Ahovi
The 2011 national budget and economic policy statement of the government would primarily focus on the oil and gas sector to facilitate infrastructural development in the sector to ensure the smooth execution of oil related projects Business Week has gathered.

Budget, which would be read in November this year by the minister of Finance and Economic Planning, Dr. Kwabena Duffuor, would also focus on water provision for deprived areas, education which involves the removal of schools under trees and the completion of selected ongoing projects in the road and mining sectors .

The 2011 budget plans to facilitate the establishment of gas gathering and processing infrastructure to ensure optimization of natural gas resources not only from the Jubilee field but also from other fields in the Tano/Cape Three Points Basin; Establishment of a framework for ensuring transparency and accountability in relation to oil and gas revenues and compliance with the Extractive Industry Transparency Initiative (EITI) principles.

Business Week learnt that a national Liquefied Petroleum Gas (LPG) programme will be developed that would ensure improved nationwide availability of LPG at reasonable prices to reduce reliance on fuel wood. Bulk Oil Storage depots would be expanded for security of petroleum products. The Rural Kerosene Distribution Improvement Project would be continued and enhanced.

Ghana needs a huge infrastructural investment, especially, in providing quality contemporary roads and a total transport system that would, seamlessly, connect the people and various communities in Ghana.

With Ghana turning into an oil economy, there is a huge expectation from the entire world as well as the people of Ghana for government to make this opportunity count for its people and the entire economy.

Commercial production of oil is expected to start in December this year. The oil sector has the capacity to sustain accelerated development of the country.

In 2011, real Gross Domestic Product (GDP) is expected to grow at 6.5%. However, with the expected benefit from the start of oil production and its related linkages and activities, real GDP growth is projected to surge to over 20%.

The current account deficit is expected to decline to 8% of GDP, and international reserve cover is projected to rise to the equivalent of over three months of import of goods and services.

Over the medium term, the economy is projected to achieve annual growth averaging about 6.5%, while inflation is projected to remain in the upper single digit range.

The objective of maintaining single digit inflation will also be pursued with prudent monetary and fiscal policies, and the total public debt will be sustained at around 60% of GDP in the medium term.

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