2015 BUDGET MAY CHANGE-FINANCE MINISTER SPEAKS

Mr Seth Terkper, Minister of Finance, has said
his ministry was mindful of the falling crude oil
prices on the global market and was putting
together a report on the impact of the
reductions to cabinet.
The report, he said, would also contain the
necessary adjustments that would have to be
made in order to ensure the achievement of
Ghana’s fiscal consolidation objectives, adding
that they would go back to parliament if
necessary.
“If it requires that we make immediate changes,
government will not hesitate,” he said at a press
briefing on the state of the economy.
Mr Terkper said the reduction in the prize of
crude oil would have mixed impact on the
economy.
He said his ministry had used a methodology
prescribed by the petroleum revenue
management act, 2011 (act 815) to estimate the
petroleum benchmark revenue for the 2015
budget in order to determine crude oil price
and quantity; using price per barrel as $99.376.
However, as at January 15, Brent crude price
had fallen by more than 50 percent to $48.80
per barrel.
This, he said, meant that the estimated
petroleum benchmark revenue price of $99.376
per barrel might not be achieved, with negative
implications for the budget and as well as
potential negative implications for the current
account and reserves.
He said in analyzing the impact of the
reductions, care should be taken not to base the
analysis on just one indicator, thus making
hasty conclusions.
“A certain balance will help not to overstate the
impact on the economy,” he said.
Mr. Terkper said the ongoing negotiations with
the International Monetary Fund (IMF) were on
track and had not been derailed in any way, as
speculated by some sections of the media.
He said three rounds of negotiations had so far
been held with the Fund since Ghana formally
requested for policy and credit support from
the IMF in August 2014, two in Ghana and one
in Washington.
“Government does have its own policies. There
are strong domestic policy underpinnings in the
negotiations” he stressed, adding that meeting
would be held in the coming weeks to finalise a
draft Memorandum of Economic and Financial
Policies (MEFP) for submission to the IMF
Executive board for approval.
Speaking on ongoing negotiations on the 2015
minimum wage and base pay, Mr Terkper said
ideally negotiations on this should have been
concluded before the reading of the annual
budget but added that organized labour,
employers and government were working to
conclude the negotiations as soon as possible.
He said government, in order to prevent fiscal
slippages from the wage bill, had since 2013
been implementing measures aimed at
controlling the wage bill and improving payroll
management including the introduction of the
electronic salary payment voucher (ESPV) system
to reduce the incidence of ghost workers on
government payroll as well as periodic audits to
streamline the payroll.
He said incidence of ghost workers and other
payroll problems were not always accounting
issues but human resources management
problems, thus a human resource management
system (HRMS) is being developed to address
such issues in the public service and related
payroll issues.
A cabinet subcommittee has been set up to
oversee the implementation of these measures to
improve payroll management.