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Akufo-Addo appoints 4 new faces in ministerial reshuffle

KT Hammon, Asabee, Bryan Acheampong, Stephen Amoah to be vetted

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Reshuffle, Newscenta, ministers, Akufo-Addo,

President Nana Addo Dankwa Akufo-Addo has finally made some changes to his government in a ministerial reshuffle.

Four new faces will join the government while three incumbents have been reassigned.

Member of Parliament (MP) for Adansi Asokwa KT Hammond picked to replace Alan Kyerematen at the Trade and Industry Ministry.

MP for Nhyiaeso and former head of Microfinance and Small Loans Centre (MASLOC) Stephen Amoah has been appointed as a Deputy Trade Minister.

Bryan Acheampong MP for Abetifi has also been appointed to head the Ministry of Food and Agriculture

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MP for Akwapim South Osei Bonsu Amoah has been picked as the Minister of State at the Ministry of Local Government and Decentralizaton.

Deputy Minister of Energy, Dr Mohammed Amin Adam has also been appointed at the Minister of State at Finance Ministry.

Mr Stephen Asamoah Boateng – Chieftaincy and Religious Affairs

Deputy Minister of Trade and Industry Herbert Krapah, has been reassigned as Deputy Minister for Energy

KT Hammond, Bryan Acheampong, Stephen Amoah  and Asamoah Boateng will be vetted

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The list

Kobina Tahiru Hammond – Minister for Trade and Industry

Bryan Acheampong – Minister for Food and Agriculture

Stephen Asamoah Boateng – Minister for Chieftancy and Religious Affairs

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Mohammed Anim Adam – Minister of State in the Finance ministry

Osei Bonsu Amoah – Minister for Local Government

Herbert Krapah – Deputy Minister for Energy

Dr Stephen Amoah – Deputy Minister for Trade and Industry

 

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Energy

 Dr Addison appeals to MPs to prioritize revenue bills

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Dr Addison, Newscenta, BoG, revenue bills, IMF,

Governor of the Bank of Ghana (BoG) Dr Ernest Addison has appealed to Parliament to pass the outstanding revenue mobilization bills before adjourning sitting sine dire this Friday.

According to him, the passage of the relevant revenue bills will conclude the required prior actions agreed in the Staff-Level agreement to advance Ghana’s $3 billion programme to the IMF Executive Board for the country to ease its current economic difficulties.

The Bills

The bills are the Income Tax (Amendment) Bill, Excise Duty and Excise Tax Stamp (Amendment) Bills as well as the Growth and Sustainability Levy Bill.

GH₵4bn revenue targeted

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Cumulatively, the bills are expected to rake in GH₵4 billion annually. However, this target will be missed this year as the bills are yet to be passed while the first quarter ends in two days.

Passage will facilitate IMF Executive Board approval

Approval of these outstanding revenue mobilisation bills is critical to facilitating the approval of $3 billion IMF Programme staff level agreement by the Executive Board of the Fund.

2023 budget sets fiscal policy on consolidation path

Addressing the Monetary Policy Committee (MPC) Meeting in Accra, Dr.  Addison noted that the budget statement for 2023 has set fiscal policy on a consolidation path which is consistent with key elements agreed with the IMF at the Staff Level in December 2022.

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Significant reduction of debt service, creating fiscal space

According to him, the domestic debt exchange, new revenue measures, and structural fiscal reforms will provide significant reduction of debt service and help create fiscal space.

Fiscal outlook is contingent on financing the budget

He pointed out that the fiscal outlook is contingent on financing of the budget and will require the conclusion of the domestic debt exchange programme as well as securing the requisite financing assurances from bilateral donors saying indications are that these discussions are proceeding well.

Based on the above, he said it is imperative that Parliament prioritizes the passage of the revenue bills currently before it.

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Zero financing of budget to be signed soon

The Central Bank Governor said under the Staff Level Agreement with the IMF, BoG and the Ministry of Finance have finalised a Memorandum of Understanding (MoU) on zero financing to the budget, which will be signed soon.

Resetting the economy on the path of recovery

Dr.  Addison is hopeful that the measures will be critical in resetting the economy on the path of recovery, including putting it firmly on a disinflation path and sustained growth

Factors that adversely affected Ghana’s macroeconomy

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The COVID-19 pandemic, rising global food prices, rising crude oil and energy prices; and the Russia-Ukraine war adversely affected Ghana’s macroeconomy, with spillovers to the financial sector.

Combination of adverse external shocks

The combination of adverse external shocks had exposed Ghana to a surge in inflation, a large exchange rate depreciation and stress on the financing of the budget, which taken together have put public debt on an unsustainable path.

$54bn total public debt stock

Ghana’s total public debt stock stands at $54 billion, out of which $28 billion is owed to foreign creditors.

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Ghana owes China $1.9bn

Out of Ghana’s $8.5 billion bilateral loans, about $1.9 billion is owed to China.

$3bn staff-level agreement reached in December 2022

In December 2022, the government reached a staff-level agreement with the fund and is now left with board-level approval before it can access the $3 billion support.

Ghana seeking extension of maturities, debt servicing, lower interest rates

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Information indicates that Ghana is seeking among other reliefs, an extension of the moratorium on debt servicing; an extension of maturities; and lower interest rates.

Passage to increase Tax-to-GDP from 13% to 18%

The  passage of all the outstanding revenue bills which are necessary for effective budget implementation as well as boosting efforts at increasing Tax-to- Gross Domestic Product (GDP) from less than 13% to the sub-Saharan average of 18%.

3 agreed Prior Actions in the Staff Level Agreement fulfilled

Already, government has completed tariff adjustment by the Public Utilities Regulatory Commission (PURC), Publication of the Auditor-General’s Report on COVID-19 spending, as well as onboarding of Ghana Education Trust Fund (GETFund), District Assemblies Common Fund (DACF) and Road Fund on the Ghana integrated financial management information system (GIFMIS).

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No access to international capital market

The international and domestic bond markets are shut for the financing of government’s programmes, forcing government to rely on the Treasury Bills and concessional loans as the primary sources of financing for the 2023 fiscal year.

Bills critical for recovery from current economic crisis

Therefore, consideration and approval of fiscal measures by Parliament are critical for recovery from the current economic crisis.

Income Tax (Amendment) Bill, 2022

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The object of the Income Tax (Amendment) Bill, 2022 is to amend the Income Tax Act, 2015 (Act 896) to revise the rates of income tax for individuals and introduce an additional income tax bracket.

It will introduce a withholding tax rate on the realisation of assets and liabilities and on winnings from lottery, unify the loss carried forward provisions and revise the treatment of foreign exchange losses.

The Bill will also increase the optional rate for individuals on the gain from the realisation of an investment asset, revise the upper limits for the quantification of motor vehicle benefits and increase the concessional income tax rates.

The individual personal income tax bands have been reviewed to accommodate the minimum wage for 2023 as the basic tax free income and an additional band at 35% as part of the high net worth taxation policy.

The upper limits for quantification of motor vehicle benefits have not been revised since 2015.

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Government has therefore revised these upper limits to account for inflation.

Compliance with the requirements for payment of tax on realisation of assets and liabilities is being made more efficient with the introduction of a return to be submitted within 30 days of the realisation and a withholding tax.

The optional tax rate for individuals on the gain from realisations has also been increased.

The rate for income from gifts will also be increased as a consequential amendment.

The loss carried forward provisions are being unified at five percent while the treatment of foreign exchange gains is being restricted to actual losses.

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Foreign exchange losses relating to capital expenditure is also to be capitalised.

The income tax rates for temporary concessions are being reviewed upwards with the intent to gradually phase them out.

These amendments are considered necessary to support the growing economy and will lead to a revenue yield of approximately GH₵1.290 billion.

Excise Duty (Amendment) Bill, 2022

The object of the Excise Duty (Amendment) Bill, 2022 is to amend the Excise Duty Act, 2014 (Act 878) to revise the excise tax rates for cigarettes and other tobacco products to conform with the Economic Community of West African States (ECOWAS) Protocols and raise revenue to mitigate the harmful effects of these excisable products.

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The Bill will increase the excise duty in respect of wine, malt drinks and spirits; and impose excise duty on sweetened beverages and electronic cigarettes and electronic liquids to increase revenue.

The ECOWAS directive on the harmonisation of excise duties on tobacco products directs that the excise duty on tobacco products must include an ad valorem duty and a specific duty.

Specifically, the ad valorem rate is required to be 50% or more while the specific tax is required to be the minimum equivalent of $0.02 per stick in the case of cigarette, cigar and cigarillo and the cedi equivalent of $20 per net kilogramme for all other tobacco products.

The Bill also seeks to amend Act 878 to implement this Directive in line with Ghana being a member of ECOWAS.

There has been an increase in the use of electronic cigarettes and other smoking devices over the last decade.

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Currently, these products do not attract excise duty, but Excise duty will be imposed on these products as the nicotine and other chemicals used as additives are also harmful.

Apart from mineral waters and malt drinks, all other sweetened beverages, including processed fruit juices do not attract excise duty.

The Bill amends Act 878 to impose excise duties on these products and increase the excise duty on mineral waters and malt drinks.

Spirits have a higher alcohol content compared to beer but the excise duty on spirits is lower than that of beer.

To address this, the excise duty on spirits is being raised above that of beer in accordance with good practice on the imposition of excise duties.

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Consequentially, the excise duty on wines has been reviewed upwards.

For ease of reference and the record, the descriptions of the various products are being revised to conform to the World Customs Organisation Harmonised Commodity Description and Coding System.

The Bill amends Act 878 by substituting the First Schedule with a new Schedule.

The rationale for the amendment is to revise the excise tax rates for cigarettes and other tobacco products to align with the ECOWAS Protocols and impose new excise tax rates on sweetened beverages.

The passage of the Bill will yield approximately GH₵450 million.

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Growth and Sustainability Levy

The object of the Bill is to impose a special levy to be known as the Growth and Sustainability Levy to raise revenue for growth and fiscal sustainability of the economy.

The Coronavirus Disease (COVID-19) pandemic led to a significant reduction in revenues and increased expenditure enormously.

The double jeopardy of the Russian-Ukraine war has also resulted in unprecedented global crises, depreciation in currencies and impacted living conditions and inflation levels.

The Ghanaian economy has not been spared these shocks.

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Further interventions are required to raise additional revenue for national development and social protection for the vulnerable.

The introduction of the Growth and Sustainability Levy is part of Government’s efforts to raise funds for carrying out these interventions.

The Levy is to be imposed on profit before tax of the companies and institutions and on· production in the case of mining, upstream oil and gas companies specified in the first column of the Schedule.

The estimated revenue for 2023 is approximately GH₵2.216 billion.

The Levy is subject to review by the Minister responsible for Finance in 2025.

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Energy

NDC opens nominations for Presidential, Parliamentary Primaries

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NDC, Newscenta, nominations, primaries, presidential, parliamentary,

The National Democratic Congress (NDC) has opened nominations for its Presidential and Parliamentary aspirants for the 2024 General Election.

A statement issued by Mr Fifi Fiavi Kwetey, the General Secretary of the NDC said the Nomination Forms for Parliamentary aspirants would be accessible to all persons for purchase on the official website of the party; www.ghanandc.com effective 22nd February.

It said Nomination forms for Presidential aspirants could be obtained from the Office of the General Secretary at the Party’s Headquarters at Adabraka, Accra effective 0800 hours from Wednesday, February 22.

The statement said the Functional Executive Committee of the Party had, however, put on hold the opening of nominations for parliamentary primaries in some constituencies.

These constituencies are Ayawaso Central, Amasaman, Afram Plains South, Akwatia, Efutu, Gomoa Central, Amenfi East, Evalue Gwira, Assin North, Pusiga and Tarkwa Nsuaem.

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The rest are Ayensuano, Adansi Asokwa, Offinso North, Ahafo Ano North, Sekyere Afram Plains, Ahafo Ano South West (Aduagyman), Bosome Freho, Asante Akim Central, Manso Adubia, Manhyia South, Subin and Fomena.

The statement said the Functional Executive Committee of the Party would in due course announce the date for the opening of nominations in those Constituencies.

Filing fee for its presidential primary has been fixed at GH¢500,000.

The parliamentary primary fee has also been pegged at GH¢40,000.

Furthermore, nomination forms for the presidential and parliamentary primaries are going for GH¢30,000 and GH¢5,000, respectively.

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Both the presidential and the parliamentary primaries would be held concurrently on Saturday, May 13, 2023.

It is the final leg of internal elections to elect a flag bearer and 276 Parliamentary Candidates to lead the party into the 2024 election.

Per the timetable, nominations for aspiring parliamentary candidates would open on February 22 to 24 to make room for interested persons to pick nomination forms via the NDC website at a cost of GH¢5000 which must be paid via Mobile Money.

Although nomination for presidential candidates will also commence on February 22 to 24, interested candidates are required to pick nomination forms directly from the office of the General Secretary of the party and pay a fee of GH¢30,000 via banker’s draft.

However, female aspirants and persons with physical disabilities will be required to pay only 50 per cent of the fee charged.

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Aspiring presidential and parliamentary candidates will be required to submit the completed forms between March 20 to 22 before vetting will commence on March 27 to 29.

There will also be a window for appeals on the outcome of the vetting process between March 30 to April 6 before the election on May 13.

Interested individuals must  be a paid up member of the NDC in good standing and must not be a dual citizen or owe allegiance to any other country aside from Ghana.

With regard to flag bearer aspirants, interested persons must be members of the NDC for at least 10 years and in good standing.

An electoral college will be constituted by the party to elect the flagbearer.

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The college will comprise executive members of the party from the branch to the national level.

It will also include Members of the NDC parliamentary group, former MPs who are members of the party, former presidential staffers, former members of the Council of State who are members of the NDC and former Ambassadors who are members of the party.

 

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Energy

 Dr Addison: BoG’s intervention prevented economic standstill 

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BoG, Newscenta, financing of govt, economic standstill,

Governor of the Bank of Ghana (BoG), Dr. Ernest Addison has defended the Central Bank’s decision to finance government expenditure last year to prevent the economy from being totally destabilized.

Economic instability

According to him, without Central Bank intervention, the economy would have come to a standstill, leading to an economic instability.

Ratings downgrade blocked access to $3bn from capital market

He explained that 2022 started with the downgrading of the economy by credit ratings agencies blocking the country’s access to the capital market where Ghana borrows at least $3 billion each year prior to 2022.

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Revenue projections fell far below expectations

Dr Addison pointed out that in addition to losing access to the capital market, revenue projections fell far below expectations.

Govt finances in trouble

Speaking at the annual stakeholder meeting of the State Interests and Governance Authority (SIGA), the Governor said the developments put government finances in trouble as there was no money to fund expenditures.

GH¢44.5bn net claims on govt in 2022

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BoG records show that net claims on the government increased by about GH¢44.5 billion at the end of December 2022.

GH¢7.2bn purchase of treasury bonds

Giving a breakdown, BoG noted that GH¢7.2 billion, represented its purchase of treasury bonds from banks to provide them with liquidity to enable them meet their obligation to customers.#

GH¢8.9bn on-lending facilities granted by IMF

In addition, GH¢8.9 billion is on-lending facilities granted by IMF for onward lending to government.

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GH¢37.9bn overdrafts

In the same vein,  GH¢37.9 billion, represents overdraft extended to government, solely meant for the purpose of addressing auction shortfalls and paying customers whose bonds had matured and for which government did not have adequate resources.

GH¢9.5bn govt deposit liabilities

According to BoG, Government Deposit liabilities recorded an increase of GH¢9.5 billion in the course of 2022.

BoG stepped in to prevent economy from being standstill

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Dr Addison stated that the Central Bank stepped in to prevent the economy from destabilizing and coming to a standstill.

Crisis would have been much earlier

He pointed out that if the BoG had not stepped in, Ghana could have gone into this crisis much earlier and investors in government bonds would not have been paid their interest.

Situation unsustainable by mid 2022

The Governor explained that the situation became unsustainable by mid 2022, leading to the government’s decision to seek support from the International Monetary Fund (IMF).

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IMF supports BoG financing of govt

According to him, IMF agreed that financing from the Central Bank was needed until a plan is finalized.

IMF applauded BoG for stepping in

He revealed that the IMF applauded the Central Bank for stepping in on time to stabilize the macro-economic condition to avert a collapse of the economy.

“We have been discussing this plan with the IMF over the last three to six months and finally had a staff-level agreement in December,” he added.

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Fiscal consolidation and debt restructuring

The plan, according to Dr. Addison, involves fiscal consolidation and debt restructuring.

“So when people speak as if we have been reckless, I disagree completely,” he said.

Analysts criticize BoG’s intervention

Some analysts have criticized BoG for supporting government expenditure in 2022, arguing that the central bank acted irresponsibly.

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Critical role of BoG

He maintained that one of the critical roles of the Central Bank is to step in and stabilize the economy when there is danger ahead.

No more BoG support for govt

According to Dr. Addison, one of the key objectives of the IMF programme is to ensure that the revenue and expenditure plan for 2023 does not require Central Bank financing in order to make BoG’s interest rate policy more effective and targets achievable.

State-Owned Enterprises

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He added that there was also a decision on aligning structural policy, hence the decision to include State-Owned Enterprises (SOEs).

Competitive and efficient SOEs

“It is important that SOEs are competitive and efficient and it is expected that we will have a policy which will state clearly what the objectives and guiding principles of state ownership will be.

Roles and responsibilities of shareholders, management of SOEs

“It must also state clearly what the roles and responsibilities of the shareholder or the management of SOEs will be.

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Financing of SOEs and dividend payments

“The policy should also specify what the fiscal relations between the government and SOEs are, including the financing of SOEs and dividend payments,” he added.

Remuneration of board members and management of SOEs

Dr. Addison is of the view that it is important for the policy to also provide a framework for the remuneration of board members and the executive management of SOEs and also a framework for the appointment of board members, as well as executive management, based on their technical competence.

Cap on salary adjustment of SOEs

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He pointed out that it is long overdue to place a cap on the salary adjustment of SOEs.

 

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