By Kofi Ahovi
Government is likely to meet all the macroeconomic targets it set for the 2010 fiscal year as provisional data suggests.
As at September 2010, the economy had expanded by 5.9% against a Gross Domestic Product (GDP) target of 6.5%, according to provisional GDP estimates based on actual January to June data released by the Ghana Statistical Service.
Government set itself a real GDP growth of 6.5%; average inflation rate of 10.5%; end-period inflation of 9.2%; an overall budget deficit of 7.5% of GDP; and a gross international reserves of not less than 2.5 months of import cover for the 2010 fiscal year.
According to the provisional data, the agriculture sector grew by 4.8% in 2010 against a target of 6.0% and constituted about 32.4% of GDP, relinquishing its position as the largest contributor to output to the services sector. All sub-sectors in the agriculture sector achieved their targets except the Crops and Livestock sub-sector, which posted a growth rate of 5.0% against a target of 7.0%. However, it is expected that when the GDP figures are revised at the end of the year, the agriculture sector will post a much higher growth rate.
The Industry Sector grew by 7% against a target of 6.6% contributing about 25.7% to GDP. The impressive performance of the industry sector is largely explained by the remarkable performance of the Mining & Quarrying, and the Electricity & Water sub-sectors. While the Mining & Quarrying sub-sector grew by 10.5% against a target of 6%, the Electricity & Water sub-sector grew by 13.3% against a target of 10.0%. Electricity production increased by 17.7% resulting mainly from a 9.2% increase in hydro power generation and 38.3% increase in thermal power generation.
After contracting by 1.7% in 2009, the construction sub-sector recorded a high growth rate of 7.9% against a target of 8%. The Manufacturing sub-sector posted a marginal growth of 1% after contracting by 1.3% in 2009.
The services sector grew by 6.1% and contributed 32.8% as its share to GDP, displacing the Agriculture sector as the highest contributor to GDP. This is an indication of a structural change in the economy towards the services sector. The Finance, Insurance, Real Estate and Business Services sub-sector recorded the highest growth rate of 13.9% against a target of 10% mainly explained by substantial growth of 38.7% in business services such as consultancy and other professional services. The Wholesale and Retail Trade, Restaurants and Hotels sub-sector registered the lowest growth rate of 3.5% in the sector compared to a projected growth of 8%.
The country recorded gross international reserves of US$ 3,973.0 million at the end of October 2010 exceeding three months of import cover compared with reserves of US$2,036.2 million at end December 2008..
The Ghana Cedi strengthened and appreciated by 0.1%, 2.2 % and 5.4 % against the US dollar, pound sterling and euro respectively as at the end of September, 2010.
Provisional data on the implementation of the budget for the first three quarters of 2010 indicates that, revenues were below the budget target by 1.8%. On the other hand, expenditures were higher than estimated by 8.0%. Given the performance of revenues and expenditures for the first three quarters of 2010, the overall budget balance, showed a deficit of GH¢2,294.3 million. This is equivalent to 8.8% of GDP, compared with a budget target of a deficit equivalent to 7.6% of GDP.
Based on the projected revenues and expenditures up to the end of the 2010 fiscal year, the fiscal deficit for the full year is forecasted to be GH¢2,514.3 million, equivalent to 9.7% of GDP.
The domestic primary balance for the period under review registered a deficit equivalent to 2.1% of GDP, against a budget target of a deficit equivalent to 3.2% of GDP. The domestic primary balance is expected to be a deficit equivalent to 1.4% of GDP at the end of the year.
The consumer price index released by the Ghana Statistical Service for October this year shows a steady decline in the inflation rate from the peak of 20.7% in June 2009 to 9.38% in October this year. Food inflation has declined from an average of 15.8% in 2009 to 5.6% in October this year. Over the same period, non-food inflation dropped from an average of 21.8% to 11.8%. The appreciation of the Cedi has also contributed significantly in lowering inflation in the country.
Interestingly, the Central Bank policy rate has fallen steadily over the period, reaching 13.5% in July 2010. All short term interest rates on the money markets have also fallen in the last 10 months of the year. Commercial banks, however, have been less responsive to the general fall in interest rates and the inflation rate, citing high risks associated with lending to small and medium size businesses as the major cause of their inability to reduce their lending rates.
During the 2010 fiscal year, construction, rehabilitation and upgrading of a number of roads and highways were completed during the year to reduce road infrastructure backlogs in the country. The Ho-Fume, Sogakope-Adidome-Ho, Kumasi-Techiman, Doyormu-Prampram and Nkawkaw-Obemeng were among the major roads that were completed during the year.
Routine maintenance were also done on 3,975.07 kilometers of highways, and re-gravelling and resealing of 444.36 km of road were also completed. In addition, some 810.13 kilometers of road improvement works was executed under the Improvement Work, Partial construction, Upgrading and Rehabilitation Program.
During the same period, a total of 253 rural communities were supplied with electricity under the SHEP 4 Project, and a survey to connect additional 1,200 communities was completed;
Work on the design and construction of 400 megawatts hydro power plant at Bui to enhance power generation is 32% complete, while work on the construction of 132 megawatts combined power cycle plant at Aboadze commenced;
During the period under review, the Rural Enterprise Skills Project, provided training and start up kits for 4,252 rural apprentices in metal works, auto-repairs, electronics, leatherworks, masonry and blacksmithing. 500 rural micro and small-scale enterprises were supported through the training of master crafts persons and created about 8000 new jobs in the rural areas. In addition, over 520 rural entrepreneurs have been supported with credit facilities in the sum of GHC1,120.00.
Eighteen Rural Technology facilities were provided with Nissan Pick-ups and standby generators, 40 District Business Advisory Centres were supplied with motorbikes, and 6 new Business Advisory Centres were also supplied with office equipment.
The National Board for Small Scale Industries provided business development assistance to 23,879 businesses, 322 SMME entrepreneurs, also provided training and finance and were assisted with loans amounting to GH¢234,281.00 as part of the effort to facilitate job creation.
The GRATIS Foundation provided training to 300 technical apprentices in metal machining, welding and fabrication, foundry and woodwork. The company manufactured 141 units of cassava, and Palm fruit processing equipment, which were exported to Sierra Leon and Cameroon. The company also developed several new prototype machines for use on the local market. The machines include crop residue processor, multi-crop thresher with a winnower5, food wormer, a tomato pulping machine, and a soap processing plant.
The Business Development Services Fund provided US$3.3 million grants to 142 SME’s to acquire technical assistance to address issues of low productivity, access to markets, product development and access to finance.
Government is likely to meet all the macroeconomic targets it set for the 2010 fiscal year as provisional data suggests.
As at September 2010, the economy had expanded by 5.9% against a Gross Domestic Product (GDP) target of 6.5%, according to provisional GDP estimates based on actual January to June data released by the Ghana Statistical Service.
Government set itself a real GDP growth of 6.5%; average inflation rate of 10.5%; end-period inflation of 9.2%; an overall budget deficit of 7.5% of GDP; and a gross international reserves of not less than 2.5 months of import cover for the 2010 fiscal year.
According to the provisional data, the agriculture sector grew by 4.8% in 2010 against a target of 6.0% and constituted about 32.4% of GDP, relinquishing its position as the largest contributor to output to the services sector. All sub-sectors in the agriculture sector achieved their targets except the Crops and Livestock sub-sector, which posted a growth rate of 5.0% against a target of 7.0%. However, it is expected that when the GDP figures are revised at the end of the year, the agriculture sector will post a much higher growth rate.
The Industry Sector grew by 7% against a target of 6.6% contributing about 25.7% to GDP. The impressive performance of the industry sector is largely explained by the remarkable performance of the Mining & Quarrying, and the Electricity & Water sub-sectors. While the Mining & Quarrying sub-sector grew by 10.5% against a target of 6%, the Electricity & Water sub-sector grew by 13.3% against a target of 10.0%. Electricity production increased by 17.7% resulting mainly from a 9.2% increase in hydro power generation and 38.3% increase in thermal power generation.
After contracting by 1.7% in 2009, the construction sub-sector recorded a high growth rate of 7.9% against a target of 8%. The Manufacturing sub-sector posted a marginal growth of 1% after contracting by 1.3% in 2009.
The services sector grew by 6.1% and contributed 32.8% as its share to GDP, displacing the Agriculture sector as the highest contributor to GDP. This is an indication of a structural change in the economy towards the services sector. The Finance, Insurance, Real Estate and Business Services sub-sector recorded the highest growth rate of 13.9% against a target of 10% mainly explained by substantial growth of 38.7% in business services such as consultancy and other professional services. The Wholesale and Retail Trade, Restaurants and Hotels sub-sector registered the lowest growth rate of 3.5% in the sector compared to a projected growth of 8%.
The country recorded gross international reserves of US$ 3,973.0 million at the end of October 2010 exceeding three months of import cover compared with reserves of US$2,036.2 million at end December 2008..
The Ghana Cedi strengthened and appreciated by 0.1%, 2.2 % and 5.4 % against the US dollar, pound sterling and euro respectively as at the end of September, 2010.
Provisional data on the implementation of the budget for the first three quarters of 2010 indicates that, revenues were below the budget target by 1.8%. On the other hand, expenditures were higher than estimated by 8.0%. Given the performance of revenues and expenditures for the first three quarters of 2010, the overall budget balance, showed a deficit of GH¢2,294.3 million. This is equivalent to 8.8% of GDP, compared with a budget target of a deficit equivalent to 7.6% of GDP.
Based on the projected revenues and expenditures up to the end of the 2010 fiscal year, the fiscal deficit for the full year is forecasted to be GH¢2,514.3 million, equivalent to 9.7% of GDP.
The domestic primary balance for the period under review registered a deficit equivalent to 2.1% of GDP, against a budget target of a deficit equivalent to 3.2% of GDP. The domestic primary balance is expected to be a deficit equivalent to 1.4% of GDP at the end of the year.
The consumer price index released by the Ghana Statistical Service for October this year shows a steady decline in the inflation rate from the peak of 20.7% in June 2009 to 9.38% in October this year. Food inflation has declined from an average of 15.8% in 2009 to 5.6% in October this year. Over the same period, non-food inflation dropped from an average of 21.8% to 11.8%. The appreciation of the Cedi has also contributed significantly in lowering inflation in the country.
Interestingly, the Central Bank policy rate has fallen steadily over the period, reaching 13.5% in July 2010. All short term interest rates on the money markets have also fallen in the last 10 months of the year. Commercial banks, however, have been less responsive to the general fall in interest rates and the inflation rate, citing high risks associated with lending to small and medium size businesses as the major cause of their inability to reduce their lending rates.
During the 2010 fiscal year, construction, rehabilitation and upgrading of a number of roads and highways were completed during the year to reduce road infrastructure backlogs in the country. The Ho-Fume, Sogakope-Adidome-Ho, Kumasi-Techiman, Doyormu-Prampram and Nkawkaw-Obemeng were among the major roads that were completed during the year.
Routine maintenance were also done on 3,975.07 kilometers of highways, and re-gravelling and resealing of 444.36 km of road were also completed. In addition, some 810.13 kilometers of road improvement works was executed under the Improvement Work, Partial construction, Upgrading and Rehabilitation Program.
During the same period, a total of 253 rural communities were supplied with electricity under the SHEP 4 Project, and a survey to connect additional 1,200 communities was completed;
Work on the design and construction of 400 megawatts hydro power plant at Bui to enhance power generation is 32% complete, while work on the construction of 132 megawatts combined power cycle plant at Aboadze commenced;
During the period under review, the Rural Enterprise Skills Project, provided training and start up kits for 4,252 rural apprentices in metal works, auto-repairs, electronics, leatherworks, masonry and blacksmithing. 500 rural micro and small-scale enterprises were supported through the training of master crafts persons and created about 8000 new jobs in the rural areas. In addition, over 520 rural entrepreneurs have been supported with credit facilities in the sum of GHC1,120.00.
Eighteen Rural Technology facilities were provided with Nissan Pick-ups and standby generators, 40 District Business Advisory Centres were supplied with motorbikes, and 6 new Business Advisory Centres were also supplied with office equipment.
The National Board for Small Scale Industries provided business development assistance to 23,879 businesses, 322 SMME entrepreneurs, also provided training and finance and were assisted with loans amounting to GH¢234,281.00 as part of the effort to facilitate job creation.
The GRATIS Foundation provided training to 300 technical apprentices in metal machining, welding and fabrication, foundry and woodwork. The company manufactured 141 units of cassava, and Palm fruit processing equipment, which were exported to Sierra Leon and Cameroon. The company also developed several new prototype machines for use on the local market. The machines include crop residue processor, multi-crop thresher with a winnower5, food wormer, a tomato pulping machine, and a soap processing plant.
The Business Development Services Fund provided US$3.3 million grants to 142 SME’s to acquire technical assistance to address issues of low productivity, access to markets, product development and access to finance.
Comments