<<Print>>

Ghana is not broke, the Minister of Finance, Mr Seth Terkper, has stated emphatically in response to critics making those claims. Although the minister admitted that the economy was facing some challenges, he contended that the country could not be described as being broke because of the challenges. �Having challenges with an economy doesn�t translate into the economy being broke,� Mr Terkper told journalists at the Peduase Lodge atop the Aburi Mountains yesterday as he clarified some economic issues that had generated controversy among a section of the public recently. The Finance Minister recalled that the 2013 Budget Statement of the government had discussed some slippages in the economy in respect of the wage bill and corporate income tax, particularly in the petroleum sector. The wage bill was a major source of the fiscal slippage of 5.1 per cent of Gross Domestic Product (GDP) in 2012, as it constituted 2.7 percentage points of the slippage. The increasing wage bill, for instance, is said to be eroding the gains of the economy which grew by 6.7 per cent in the first quarter of last year. Mr Terkper said the government had made some significant interventions, such as the adjustment of the subsidy on petroleum, to arrest the situation and meet revenue targets. He said in order to ensure the achievement of the fiscal and other macroeconomic targets indicated in the 2013 Budget, the government was implementing measures to generate additional revenue, control expenditure and improve efficiency in public spending. Those measures, he indicated, included the re-introduction of the five per cent national fiscal stabilisation levy on the profit before tax of selected companies, such as banks, insurance companies, non-bank financial institutions, breweries, mining, tobacco and communication companies. Furthermore, he said, the government had placed a moratorium on the award of contracts and tasked the Ghana Revenue Authority (GRA) to take administrative measures that would help shore up its revenue collection. The Finance Minister said the government was also making two corrections in respect of the Communication Service Tax and the Environmental Tax. He said the Communication Service Tax was not new, explaining that the government was only seeking to clarify its nature as an excise tax, not Value Added Tax (VAT). As the government endeavoured to deal with the high wage bill, sustain the growth of the economy and maintain the relative stability in the inflation rate, the $1 billion Eurobond came in handy as a critical resource to undertake development projects, he said. �We are on course with the Eurobond issue,� Mr Terkper declared, adding that the government would not use the entire money for public debt financing. He said part of the funds would be used to finance the amortisation of domestic bonds, pay for counterpart funding for some identified projects and meet capital commitments in the budget.