Mr. Speaker, I rise to second the motion, that this Honourable House approves the sum of GH¢ 252,790,947.00 as Supplementary Estimates of Government for the 2009 Financial Year, which was moved by the Hon Minister for Finance and Economic Planning on Tuesday, 25th August, 2009.
Mr. Speaker, in doing so, I wish to present the Report of the Committee. Before I begin with the presentation of the Report, I wish to amend a portion of it, that is, page 6, number 6, that is, Conclusion. We will amend there to read:
“The Committee respectfully recom- mends to the House to adopt this Report and approve by Resolution”.
So that is the amendment to the Report. 1.0 Introduction
The Supplementary Estimates for the 2009 Financial Year were laid in the House on Tuesday, 25th August, 2009 and referred to the Finance Committee for consi-deration and report, pursuant to article 179 (8) of the 1992 Constitution and Order 143 of the Standing Orders of the House.
To consider the Estimates, the Committee met with the Minister for Finance and Economic Planning, Hon Dr. Kwabena Duffuor and a technical team from the Ministry of Finance and Economic Planning and hereby present this Report.
The Committee referred to and/or was guided by the following documents in its deliberations:
The 1992 Constitution of the Republic of Ghana.
The Budge t S ta tement and Economic Policy of Government for the 2009 Financial Year.
The Standing Orders of the House.
Mid-Year Review of Economic Policy and Supplementary Estimates of the Government of Ghana for the 2009 Financial Year.
In March 2009, the 2009 Budget Statement and Economic Policy of Government was presented to the House for approval in line with article 179 of the Constitution and Standing Order 140 of the House.
The Budget reflected the strategic focus of growth and poverty reduction and dwelt on investing in the economy and creating jobs for a better Ghana.
Since the 2009 Budget was approved by the House, many significant developments have arisen on the macro- economic front, especially with regard to interest costs
associated with domestic borrowing. As a result of the build-up in the stock of domestic debt and associated high cost of borrowing, as well as the need to liquidate some arrears and outstanding commitments, payments will exceed earlier estimates for 2009, thereby requiring additional resources to meet those additional payments.
The Supplementary Receipts and Payments to be undertaken have given rise to the need for some adjustments in the annual estimates approved for the 2009 fiscal year.
It is as a result of this, that these Supplementary Estimates have been laid before the House for approval in conformity with article 179 (8) of the Constitution and Order 143 of the Standing Orders of the House.
4.0 Supplementary Provision for 2009
The total amount of the Supplementary Estimates is two hundred and fifty- two million, seven hundred and ninety thousand, nine hundred and forty-seven Ghana cedis (GH¢252,790,947.00).
5.0 Observations and Recommendations
The Committee observed that there has been a consistent reduction in import duty exemptions and concessions granted during the first six months of the year. The outturn for tax exemptions was GH¢180.2 million against an estimate of GH¢209.1 million indicating a revenue inflow to the Consolidated Fund of about GH¢28.9 million.
To ensure that additional revenue is generated from reduction in tax exemptions, Government has asked the Customs, Excise and Preventive Service (CEPS), Value Added Tax (VAT) Service and the Ghana Investment Promotion
Centre (GIPC) to ensure that the necessary approval channels are followed judiciously.
The technical team informed the Committee that the National Fiscal Stabilisation Levy Act which imposes a five per cent levy on the profits of banks, insurance companies, non-bank financial institutions, breweries, mining, tobacco and communication companies is expected to generate an additional revenue of GH¢11 million for the rest of the year.
In addition to the revenue measures outlined above, an amount of GH¢153.0 million is expected from cocoa revenue (specifically income surplus from COCOBOD). Together, all the revenue measures will generate total additional (supplementary) receipts of approximately GH¢252.8 million.
The Committee noted that as a result of expected increases in import Value Added Tax (Import VAT), it is estimated that transfers to the Ghana Education Trust Fund (GETFund), National Health Insurance Fund (NHIF) and the District Assemblies Common Fund (DACF) which are directly linked to revenue performance will in total, increase by GH¢4.3 million, GH¢16.6 million and GH¢7.0 million respectively. This is expected to bring more development projects in consti- tuencies of Hon Members of Parliament.
Under Discretionary Payments, an additional amount of about GH¢109.5 million has been provided in the Supplementary Estimates to cater for the liquidation of arrears and some outstanding commitments, and the creation of an escrow account for the uptake of compressed gas from the West Africa Gas Pipeline (WAGP).
In consonance with the announcement by His Excellency, the President in his
first Sessional Address, an amount of three million Ghana cedis (GH¢3,000,000.00) has been allocated to the celebration of the 100th birthday anniversary of Dr. Kwame Nkrumah, an illustrious son and first President of Ghana, which falls this year.
Hon Members would recall that His Excellency, the President mentioned that this anniversary will be commemorated as an African event in an appropriate and fitting manner.
The Committee was informed that as a result of Government's commitment to achieving the budget deficit target of 9.4 per cent of GDP, measures have been instituted to reduce domestic-financed capital expenditure by GH¢45 million. This reduction will mainly affect non- developmental capital expenditures, including the purchase of official vehicles and office furniture and equipment, such as air conditioners.
The Committee recalled that out of the amount of US$300 million the country recently received from the World Bank for budget support, an amount of US$150 million had already been factored into the 2009 Budget that was approved by this House in March 2009, while the US$150 million was an additionality. As a result of this additionality, the net domestic financing of the budget has been reduced to GH¢1,032.8 million, while programme loans have increased to GH¢611.7 million.
The Minister for Finance and Economic Planning informed the Committee that the US$602 million loan that the country successfully negotiated from the IMF for balance of payments support is expected to increase the foreign exchange reserves of the Bank of Ghana. With the G-20 decision to increase the IMF's Special Drawing Rights (SDR) allocation by