Government Commitment To Reduce Domestic Arrears

The Minister for Finance and Economic Planning, Dr. Kwabena Duffuor, on Thursday assured Ghanaians that the Government will institute pragmatic measures as promised in the 2011 Budget Statement and Economic Policy, to efficiently manage the country's stock of domestic arrears both in the short and medium term. The Minister who gave the assurance when he presented the mid-year review of the Budget Statement and Economic Policy and the Supplementary Estimates, for the 2011 financial year to Parliament yesterday said, government widened the scope of domestic arrears to include liabilities of Tema Oil Refinery (TOR), Volta River Authority (VRA) and Bulk Oil Storage Transport (BOST) arising from short and long term loans as well as other commitments owed to their creditors as part of efforts to manage the arrears. He revealed that the change in definition of the arrears to include liabilities of the SOEs resulted in total domestic stock of arrears amounting to GH�3.8 billion as at the end 2010 of which SOEs arrears amounted to GH�1,771.8 million He noted that government in addition have also issued a total of GH�891.3 million in bonds to creditors as part of its liquidation strategy, adding that efforts to substantially repay the stock of arrears is not only intended to reduce the financial burden of contractors and suppliers but also to reduce the exposure of commercial banks to the accumulation of Non-Performing Loans (NPLs). The Minister indicated that government have released an amount of GH�8.0 million out of the GH�25.0 million allocation to SADA for the 2011 fiscal year and has made a provision of additional GH�5 million in the Supplementary Budget. He revealed that a GOG-Development Partners conference on SADA will soon be convened to solicit the support of development partners and assured Ghanaians of government's commitment to release the rest of the funds to SADA to ensure a speedy implementation of programmed activities. Dr. Duffuor informed the House that the Supplementary Estimates, of GH�1,463,123,559 when approved by parliament will be used to support some specific programmes including National Flood Control Programme , Sakumono Sea Defence Works, Completion of Nima drains, and the Construction of Ferry on Black Volta, the School Feeding Programme, Sanitation, removal of Schools under Trees, Education Infrastructure among others. He pointed out that some developments in the domestic economy, including the passage and implementation of the Petroleum Revenue Management Act, 2011, Act 815, coupled with changes in world crude oil prices and revised oil production levels, receipt of proceeds from the sale of shares in Anglogold Ashanti among others have necessitated the revisions to the fiscal framework. Dr. Duffuor disclosed that government have revised its macroeconomic targets for the 2011 budget, projecting real GDP growth of 7.5 percent excluding oil and 14.4 percent including oil. ''Overall fiscal deficit is revised from 4.1 percent to 5.1 percent of GDP with End-period inflation rate been targeted at 9.0 percent from 8.5 percent,'' Dr Kwabena Duffuor said.