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2015 Budget: Gov't To Remove Duty & VAT On Inputs For Production of Machetes, Exercise Books   
 
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19-Nov-2014  
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Seth Terkper
 
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Minister of Finance, Mr. Seth Terkper has stated that to sustain our medium term growth prospects, measures are being put in place to reduce our vulnerability to external shocks through diversifying and adding value to our exports and supporting local production of imported goods which can be produced domestically.

By supporting the local industries VAT on locally produced pharmaceuticals and some of the raw materials used for the production of these pharmaceuticals will be removed.

Government will also remove import duty and VAT on inputs for the production of machetes and the production of exercise and text books.

Macroeconomic Performance For 2014

In the Real Sector, provisional real GDP growth in 2014 was 6.9 per cent, down from the revised target of 7.1 percent. This compares with an out turn of 7.6 percent in 2013.

Provisional 2014 real GDP amounts to GHȻ34,906.80 million.

This is slightly higher than the 2014 projected real GDP of GHȻ34,809.30 million and compares favorably with the 2013 real GDP out turn of GHȻ32,644.1 million.

According to Seth Terkper, the 2014 provisional records shows positive growth rates in all subs-sectors.

With the Sectoral Performance, he told Parliament that the Agriculture sector has continued its increasing trend, growing at 5.3 percent in 2014 compared with 5.2 per cent in 2013 and 2.3 percent in 2012.

The Industry Sector however, recorded a growth of 4.6 per cent in 2014, down from 7.3 percent in 2013.

The Services Sector recorded its lowest growth rate since 2007 by registering a 4.6 percent growth, down from 9.6 percent in 2013.

Factors accounting for the slower than expected pace of growth included:

•Energy supply shortfalls;
•Deteriorating commodity prices, particularly gold and cocoa;
•Low productivity;
•Inadequate access to credit and markets; and
•The effects of the depreciating cedi on the importation of intermediate commodities and its impact on manufacturing sector.

Inflation

Inflation rose to 16.9% in October 2014, from 16.5% in September and 13.5% at the end of 2013.

The rise in inflation pressures in 2014 reflected the sharp depreciation of the local currency as well as the pass through effects of fuel and utility price adjustments.

"Inflation during the first 10 months of the year was reflected more in the non-food inflation than the food inflation.

"Crude Oil prices have experienced a declining trend recent times, dipping to prices below $90.00 in July and an average of $107.00 and declining to $80.00 in November 2014...recent market sentiments point to weaker crude oil prices than those predicted by the WEO(World Economic Outlook)," he stated.





 





Public Debt Trend
Utilization of the 2014 Annual Budget Funding Amount

Touching on the utilization of the 2014 budget, he said out of the total Annual Budget Funding Amount (ABFA) of GH¢888.6 million received at the end of September 2014, GH¢270.51 million (30.44%) was disbursed to the four priority areas as follows:

•GH¢260.66 million (96.36%) to Road and other Infrastructure;
•GH¢0.0 (0.0%) to Capacity Building;
•GH¢0.0(0.0%) to Amortization of Loans for Oil and Gas Infrastructure; and
•GH¢9.85million (3.64%) to Agriculture Modernization.

Public Debt

He added that the stock of public debt (including Government guaranteed debt) stood at GH¢ 69,705.9 million (60.8% of GDP) at the end of September 2014 compared with GH¢52,125.91 million at the end of December, 2013 (55.5% of GDP).

He clarified that the External debt amounted to GH¢40,644.15 million (35.47% of GDP) at end-September 2014.

Domestic debt totaled GH¢29,041.75 million (25.33 percent of GDP) at end- September 2014.

The Theme for the budget is; “Transformational Agenda: Securing the Bright Medium Term Prospects of the Economy".
 
Source: Alex Ofei-Kwayisi/PeacefmonlIne.com/Ghana
 
 

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