Debates of 21 Jul 2015

MR SPEAKER
PRAYERS 10:25 a.m.
ANNOUNCEMENTS 10:25 a.m.
Mr Speaker 10:25 a.m.
Hon Members, it has been barely three years since the passing on of our former President, H. E. Prof. John Evans Atta Mills.
In commemoration of the third anniversary, the John Evans Atta Mills Centre for Law and Governance (GIMPA), in partnership with the John Evans Atta Mills Memorial Library, University of Cape Coast (UCC) have invited the former Governor of Ekiti State in Nigeria, H. E. Dr Kayode Fayemi, to deliver the 3rd John Evans Atta Mills Memorial Commemorative Lecture.
Hon Members, this morning, I have the pleasure to introduce to you, Dr Kayode Fayemi, who has thought it necessary to visit Parliament and to pay a courtesy call on me in recognition of the role of the institution in expanding the frontiers of our democracy and the rule of law, which the distinguished Professor of law stood for all his life before being called by His Maker.
Dr Kayode is accompanied by his spouse, Mrs Bisi Adeleye-Fayemi, and the young Dean of the GIMPA Law School, Mr Ernest Kofi Abotsi.
VOTES AND PROCEEDINGS AND THE OFFICIAL REPORT 10:25 a.m.
Mr Speaker 10:25 a.m.
Hon Members, Correction of the Votes and Proceedings.
  • [No correction was made to the Votes and Proceedings of Friday, 17th July, 2015.]
    • Mr Speaker 10:25 a.m.
    Hon Majority Leader, we do not have any Official Report for correction today:
    Are we taking item number 3 -- Urgent Question?
    Mr Alban S. K. Bagbin 10:25 a.m.
    Mr Speaker, I would want to plead that you grant us leave to alter the order of business as stated on the Order Paper of Tuesday, 21st July, 2015 to start with the Resolutions. After the Resolutions, we could take the Statements and from there, we would move onto other items.
    With your kind leave, may I propose that we start with item number 8.
    Mr Speaker 10:25 a.m.
    Hon Majority Leader, while we wait for the Chairman of the Finance Committee and the Ranking Member of the Finance Committee, can we take the Statement?
    Mr Bagbin 10:25 a.m.
    Yes, we would take the Statement.
    Mr Speaker 10:25 a.m.
    Very well.
    Hon Members, I have admitted one Statement this morning; it is standing in the name of the Hon Member for North Tongu and Deputy Minister for Education.
    Hon Member, you have the floor.
    STATEMENTS 10:35 a.m.
    Prof. Mills left a legacy consistent with Psalm 127 10:35 a.m.
    1 --
    “Except the Lord build the house, they labour in vain that build it. Except the Lord keep the city, the watchman waketh but in vain”.
    Mr Joseph Yieleh Chireh (NDC--Wa West) 10:45 a.m.
    Thank you Mr Speaker, for giving me the opportunity to also comment on this memorable occasion in remembering our late President.
    He held two things which were very important in his life. He was very punctual and made sure that when he says it is 10.00 o'clock, it is 10.00 o'clock. He respected time and I think one of the things we should all look for in this man is his ability, at the age he was, to be punctual at meetings and ensured that things went according to plan.
    The other thing that we all must remember about him is his ability to work with people who would have disparaged him or have said things about him that are not good but he was willing, at that time,
    to accommodate them for the greater good of Ghana. He always insisted that it was not about him as President Mills but what we could all achieve as a nation because he believed that everybody had a contribution.
    The accolade of “asomdwehene”, we all know, is founded on the principle that we need peace in Ghana to develop. You cannot fight anybody who has made a remark about you and still be able to get people together to ensure peace for the development of Ghana.
    I think that this man's humility and ability to ensure that there is peace in this country and that we are punctual to functions should be what we should all emulate.
    Minister for Employment and Labour Relations (Mr Haruna Iddrisu) (MP) 10:45 a.m.
    Mr Speaker, thank you very much for the opportunity to associate myself with the Statement ably made by the young Hon Deputy Minister, Hon Samuel Okudzeto Ablakwa, who is the Member of Parliament for North Tongu Constituency, on the Third Anniversary Commemorative Statement in honour of His Excellency Prof. John Evans Atta Mills, who was then the President of the Republic of Ghana.
    Mr Speaker, I also join you to welcome Dr Kayode Fayemi for accepting to do the country the honour of associating himself with today's lectures.
    Mr Speaker, undoubtedly, Prof. J. E. A. Mills was a public servant of uncommon degree, and without any hesitation, death eluded this country of a fine gentleman and good leader who was not only God- fearing, but eschewed all forms of violence.
    Mr Speaker, to add to what Hon Okudzeto Ablakwa describes as the Ten Commandments, how I wish I could add the 11 th Commandment to say that modesty, humility and honour were the hallmark of Prof. J. E. A Mills.
    Mr Speaker, just to demonstrate his sense of humility, he did not only internalise, but actively lived the values and virtues of constitutional democracy, and contributed immensely to the continuing peace and stability of our country -- as he rightly pointed out, even the management of the transition.
    Mr Speaker, I would just pick one point, which is an opportunity for young people to serve in Government, for purposes of emphasis. Indeed, Prof. Mills, probably, improved upon earlier foundations. But under multiparty constitutional democracy of this Third Republican Constitution, he would forever be remembered as a signature initiative, which includes the sitting and current President of the Republic today, who emerged out of the leadership of Prof. J. E. A Mills.
    My goodself, Hon Samuel Ablakwa, Hon Fifi Kwetey, Hon Corletey, Hon Sampson Ahi and many of the young people in Government today and yesterday owe it to his leadership. I am sure succeeding generations in our country would value octogenarianship in terms of experience, but would also place an even better and higher premium on young people given an opportunity to serve.
    Mr Speaker, one of the major things I remember Prof. Mills for was not just his sense of humour, but his sense of honesty. I still vividly recall the last days before he passed on, and that is why I emphasised that death eluded us a good leader. It was
    very close to his untimely demise when he said, afahye was coming and he was concerned about some pledges and promises he had made to the people of the Central Region, which he wanted to honour.
    Mr Speaker, as I contribute to this, as the Hon Member who made the Statement did, he was gracious in defeat. He contested and lost some of the elections he took part in, but he lived to be sworn in as the President of the Republic of Ghana.
    Modesty, as I indicated, and was rightly pointed out by the Hon Member who made the Statement, was his hallmark. It was not just reducing the Presidential convoy --
    Mr Speaker 10:45 a.m.
    Hon Minister, I hope that you are not repeating the point made by the Hon Member who made the Statement?
    Mr H. Iddrisu 10:45 a.m.
    Not at all, Mr Speaker. I am, indeed, also winding up.
    To his memory, we should identify, for future Presidents -- Mr Speaker, it is about time I stated that many of the public universities of this country, as I have argued strongly somewhere, should be named after some of our former leaders. For instance, the Universities in the Brong Ahafo or Volta Regions could be named after the late Prof. J. E. A. Mills as the Prof. Mills University.
    I also further suggest that the University for Development Studies (UDS) could be named after ex-President John Jerry Rawlings, and the University in Tarkwa could be named after ex- President John A. Kufuor. I think that we should begin to honour them while they live, instead of us eulogising them when they are dead. I think that we should take particular attention in --
    Mr Speaker 10:45 a.m.
    Hon Minority Leader, do you want to say some few words?
    rose
    Mr Speaker 10:45 a.m.
    Hon Member, do you want to contribute?
    Mr Afenyo-Markin 10:45 a.m.
    Mr Speaker, rightly so; I do.
    Mr Speaker 10:45 a.m.
    Please, you have the floor.
    After that I will move to the Hon Minority Leader and the Hon Majority Leader.
    Mr Alexander Afenyo-Markin (NPP- -Effutu) 10:55 a.m.
    Mr Speaker, I thank you for the opportunity to add my voice to the many things that have been said in honour of our late President Prof. J. E. A. Mills.

    Indeed, Mr Speaker, his posture as a man of peace was not in doubt with respect to his relationship with people across the political divide. By that posture, the former President demonstrated that we are all of the same stock, partakers of the same nature and shares in the same hope. Although distinctions exist among us as a result of our own political inclinations, yet we ought not allow such distinctions to create sharp divisions that would lead to the destabilisation of this country.

    I believe that we, the young ones who have joined the political business of supporting the growth of our nation, have a lot to learn. Of course, that which has been demonstrated by other Presidents, such as ex-President Kufuor, former President Kwame Nkrumah of blessed memory and of course, our former Prime Minister, Kofi Abrefa Busia, whom we are told at a point, somebody even used his physique to insult him, but in a very humble and quiet manner, he did not attack back.

    Mr Speaker, on this occasion, I believe that all of us who were in a state of shock, and as a result, led us into all manner of speculations, would come into realisation that it is the Lord who gives and he who takes away. Let us use the occasion of the third anniversary of his death to reflect and do things that would help develop mother Ghana.
    Mr Speaker 10:55 a.m.
    Hon Minority Leader, then the Majority Leader.
    Minority Leader (Mr Osei Kyei- Mensah-Bonsu) 10:55 a.m.
    Mr Speaker, that -- [Interruption.]
    Mr Speaker 10:55 a.m.
    Hon Members, the background noise is getting out of control.
    Mr Kyei-Mensah-Bonsu 10:55 a.m.
    That former President John Atta-Mills was a man who was noted for his modesty, and simplicity cannot be over-emphasised. And that he was deeply religious, cannot also be blown out of proportion.
    Mr Speaker, it is no hyperbole to say that the former President was a keen sportsman and sports administrator. He was a person who also wished the country very well. But if the truth must be told, sometimes, people say some things about some people who have passed on as if they want to re-write history. I think we should all be careful; all of us are human after all.
    I thought that this Statement was about former President Mills; it turns out to be an administer of eulogy to a Joshua or Elijah who is our President -- President Mahama is a Joshua, Elisha; the nation knows better.
    Mr Speaker, let us also not pretend that because of the accolade of asomdwehene, nothing untoward happened in the days of former President Mills. Let us not pretend because there was that horrendous spectacle at Agbogbloshie, which never got attended to at former President Mills' time.
    rose
    Mr Speaker 10:55 a.m.
    What is your point of order?
    Mr M. Quashigah 10:55 a.m.
    On a point of order.
    Mr Speaker, Statements are not supposed to generate debate.
    Mr Speaker 10:55 a.m.
    What is your point of order, Hon Member for Keta?
    Mr Quarshigah 10:55 a.m.
    Mr Speaker, the Hon Minority Leader indicated that the President did not concede defeat in 2004. That obviously, is misleading. Apart from that, this is a Statement which is not supposed to generate debate but clearly, the trajectory of the Hon Minority Leader is leading to a debate.
    Mr Kyei-Mensah-Bonsu 10:55 a.m.
    Mr Speaker, I thought you would have directed the attention of my Hon Colleague to the fact that a Statement that is made in itself is not supposed to generate or stimulate debate. If a lot of untruths are contained in a Statement ad initio, that generates debate and that I thought is what ought not to have been allowed in the first place.
    Mr Speaker, I believe that we should not flog the dead but we should hold and remember them by the good things they did. Former President Mills did a lot of good things for the country; there were a lot of things that happened, that maybe, were unattractive or should not have happened. But let it not appear that we had a saint as a President who did nothing wrong. That certainly, may not be acceptable.
    We continue to pray to the Almighty God to give him eternal rest.
    Majority Leader (Mr Alban S. K. Bagbin) 10:55 a.m.
    Mr Speaker, I would want to add a few words to the commemorative Statement ably made by the Hon Samuel Okudzeto-Ablakwa.
    For those of us who are grassroots, what we say about our late President is that, Professor Mills was “too much”. [Laughter.] He meant a lot to many people, he was a man of varied qualities; conducts and he was a very principled person who had values that exhibited themselves in various ways of conduct.
    Mr Speaker, we know of his academic brilliance; nobody can take that away from him. He lectured me and throughout his

    lectures whether it is in law or administration, he did it viva voce. Mr Speaker, without textbooks, he dictated his notes and after reading his notes, when one reads his textbooks, it was ditto ditto -- [Interruption]-- That showed that, the late Professor had a magnetic brain and throughout his Presidency, he gave many speeches without looking at any document and that was very clear in the minds of Ghanaians.

    Mr Speaker, he was a decent gentleman -- his language, I am sure, cannot be contested, and all of us knew how throughout it was difficult for him to use words that were harsh or conveyed meanings that would hurt fellow Ghanaians or humanity. We are all aware of his patriotism, he worked and died for this nation. In spite of the fact that he was aware that he was not well, he kept moving and died in office. That was a patriot.

    Mr Speaker, I started and said that, for us the Honourable people, the late Professor was “too much” because he was a servant leader. He was not just modest and humble, he was a servant leader and he served us very well. That was why his sudden demise was so painful and we say the crowd -

    We were in a state of mourning and that brought the whole world to this country. That legacy cannot give away to whatever other people may think about him. Yes, definitely, he is human. He is not a saint. None of us would even claim to be anywhere 50 per cent near what he was. But yet we are proud that we are giving our bit to this nation.

    So, I think that we need to try as much as possible to emulate his examples whether in academia, in politics or in leadership. That is what this Statement

    is calling for. Therefore, we need to imbibe this in the up and coming youth and all Ghanaians. If we had a few people like the late Prof. Mills, Ghana would be somewhere.

    Unfortunately, the majority of us dwell in falsehood; live some wrong cultures and values and that is what has kept us just stuck in the mud. So, I think that this is a well-deserved Statement and we would congratulate him for the service he has done for this nation.

    Thank you very much.
    Mr Speaker 11:05 a.m.
    Hon Members, that brings us to the end of Statements.
    Hon Majority Leader, what item are we taking?
    Mr Bagbin 11:05 a.m.
    Mr Speaker, we may now take a number of the Resolutions before we move to the Budget Statement.
    Mr Speaker, we would start with the procedural Motion numbered 7 on page 3 of the Order Paper.
    Mr Speaker 11:05 a.m.
    So, we are taking Motions and consequential Resolutions?
    Mr Bagbin 11:05 a.m.
    That is so. About three of them and then we go to --
    Mr Speaker 11:05 a.m.
    Very well.
    Hon Members, item number 7 on the Order Paper.
    Hon Chairman of the Finance Committee.
    MOTIONS 11:05 a.m.
    Chairman of the Committee (Mr James K. Avedzi) 11:05 a.m.
    Mr Speaker, I beg to move, that notwithstanding the provisions of Standing Order 80 (1), which require that no Motion shall be debated until at
    least, forty-eight hours have elapsed between the date on which notice of the Motion is given and the date on which the Motion is moved, the Motion for the adoption of the Report of the Finance Committee on the Loan Agreement between the Government of the Republic of Ghana and International Development Association (IDA) for an amount of one hundred and six million, seven hundred thousand Special Drawing Rights (SDR 106,700,000) (equivalent to US$150 million) to support the Macroeconomic Stability for Competitive and Growth Development Policy Financing may be moved today.
    Dr Anthony A. Osei (NPP -- Old Tafo) 11:05 a.m.
    Mr Speaker, the Hon Chairman has copies of the Report. I appear not to have any and I am wondering what is going on. Item number 7 -- I do not have a single copy of the Reports.
    Mr Speaker 11:05 a.m.
    Hon Chairman of the Committee, the Hon Ranking Member is raising an issue with regard to copies of the Report.
    Mr Avedzi 11:05 a.m.
    Mr Speaker, the Reports were laid on Friday and distributed. I have my copy. I have two Reports with me here, which are actually captured on the Order Paper. So --
    Dr A. A. Osei 11:05 a.m.
    Mr Speaker, I do not have a difficulty with the subject matter but I think as a matter of principle --
    They are now distributing them. They were not distributed on Friday.
    It is a matter of principle.
    Mr Speaker 11:05 a.m.
    Hon Member for Old Tafo, are you seconding the Motion?
    Dr A. A. Osei 11:05 a.m.
    Mr Speaker, it just came.
    Mr Speaker, I beg to second the procedural Motion but I think that it is only fair that we have copies of all the Motions ahead of time. I do not want to be using my brain to be talking about matters -- because this is a House of records.
    Question put and Motion agreed to.
    Resolved accordingly.
    Mr Speaker 11:05 a.m.
    Item number 8?
    Hon Chairman of the Committee?
    Financing Agreement between Government of the Republic of Ghana
    and the International Development Association (IDA)
    Chairman of the Committee (Mr James K. Avedzi) 11:05 a.m.
    Mr Speaker, I beg to move, that this Honourable House adopts the Report of the Finance Committee on the Financing Agreement between the Government of the Republic of Ghana and the International Development Association (IDA) for an amount of one hundred and six million, seven hundred thousand Special Drawing Rights (SDR106,700,000) (equivalent to US$150 million) to support the Macroeconomic Stability for Competitiveness and Growth Develop- ment Policy Financing.
    Mr Speaker, in doing so, I present your Committee's Report.
    Introduction
    The request for approval of the Financing Agreement between the Government of the Republic of Ghana and the International Development Association (IDA) for an amount of one hundred and six million, seven hundred thousand Special Drawing Rights [ (SDR 106,700,000.00) (USD150.00 million equivalent)] to support the Macroeconomic Stability for Competitiveness and Growth Development Policy Financing was presented to the
    Chairman of the Committee (Mr James K. Avedzi) 11:05 a.m.
    House on behalf of the Hon Minister for Finance by the Hon Minister for Foreign Affairs and Regional Integration, Ms Hannah Serwaah Tetteh, on Thursday 9th July, 2015 while the Identity Agreement between the Government of the Republic of Ghana and the International Development Association (IDA) for a Policy-based Guarantee of four hundred million United states dollars ($400 million) in respect of the First Macroeconomic Stability for Competitiveness and Growth Develop- ment Policy Financing was presented by the Hon Minister for Finance, Mr Seth Emmanuel Terkper on Thursday, 9th July, 2015 in accordance with article 181 of the 1992 Constitution. Mr Speaker referred the request to the Finance Committee for consideration and report in accordance with Order 169 of the Standing Orders of the House.
    The Committee was assisted at its deliberations by the Hon Minster for Finance, Mr. Seth Emmanuel Terkper and his deputy, Mr. Cassiel Ato Baah Forson, and officials from the Ministry of Finance.
    The Committee appreciates the co- operation and assistance received from the Hon Minister, his deputy and officials during the deliberations.
    Reference
    The Committee referred to the following additional documents during its deliberations:
    The 1992 Constitution of Ghana
    The Standing Orders of the Parliament of Ghana
    Loans Act 1970 (Act 335)
    Background
    Ghana has over the past decade made phenomenal strides in economic growth with real GDP growth rising steadily from 3.7 per cent in 2000 to 8.9 per cent before decelerating slightly to 7.2 per cent in 2013.
    Between 2011 and 2013, growth rates accelerated further averaging a remarkable 10.2 per cent per year with 2011 witnessing a record high GDP growth rate of 14.4 per cent. This success came on the back of a positive trend in terms of trade, large oil and gas discoveries, and commencement of oil production, substantial capital inflows, and a reputation for robust democratic institutions.
    From 2013, however, the economy began to show signs of severe stress. Economic growth slowed from a previously high level, fiscal targets were missed despite significant measures to contain the deficit, exchange rate difficulties as a result to the cedi's depreciation, spike in inflation, energy rationing due to disruption in supply of gas from Nigeria, worsening terms of trade and the subsequent dwindling of international reserves.
    Fiscal deficits and currency depreciation caused the debt profile to rapidly deteriorate and interest payments on the public debt jumped to over 6 per cent of GDP by 2014. The net public debt stock increased dramatically, rising from 38.7 per cent of GDP in 2011 to 52 per cent in 2013 and reaching 65 per cent in 2014. Overall inflation rose sharply, from 8.8 per cent in 2012 to 17 per cent in 2014, with non-food inflation increasing from 11.6 per cent to 23.9 per cent.
    Government realising the severe impact of the crisis quickly developed a consolidated set of home grown polices to stem the further decline of the economy. These policies included revenue enhancing and fiscal consolidation measures which sought to broaden the tax base and thus spread the burden of national development on all citizens rather than the few who meet their tax obligations; and expenditure rationalisation policies which would help achieve the fiscal targets for the year.
    While these measures helped government to substantially address the challenges, 2014 ended with a fiscal deficit of 10.8 per cent of GDP against a target of 9 per cent; mainly due to shortfall in tax revenue, continuous shortfall in grants from development partners and overrun in compensation or personal emoluments.
    To stabilise the economy and reassure domestic and external investors of its commitment to prudent macroeconomic policies, in August of 2014, the government began engaging the IMF for support which was subsequently granted in April 2015. To further consolidate the progress being made, Government again requested support from IDA in a three - phase operation called Macroeconomic Stability for Competitiveness and Growth (MSCGI) Development Policy Financing
    (DPF).
    Justification of the Request
    Fiscal year 2012-14 has seen the economy come under severe stress from both domestic and external shocks. Government has responded to these shocks by implementing a number of policies and measures to reverse the trend. Notwithstanding Government's pro- grammes aimed at strengthening fiscal consolidation, significant institutional, policy and systems and process weaknesses continue to manifest themselves, thus limiting the impact of reforms already implemented and leading the country into an unsuitable fiscal path.
    Additionally, there is the need to make public expenditure more efficient and effective by continuing with the ongoing reforms in the Public Financial Management (PFM). This is to enhance the credibility of the budget which has hitherto been low and has adversely impacted service delivery efficiency in Government. This is an overarching problem mainly caused by institutional, behavioural and policy weaknesses. Until these weaknesses are addressed, efficient and effective fiscal consolidation will not be achieved.
    Given our challenging financial situation, it is anticipated that debt, especially the Eurobond which may fall in 2017, might be serviceable. Hence a guarantee negotiated with the World Bank to refinance existing external and domestic debt, without increasing the total debt stock. The bond proceeds of US$1.0 billion would enable an early payback of the US$531 million sovereign bond due in 2017 with the remaining amount used for refinancing existing domestic debt.
    Finally, the Macroeconomic Stability for Competitiveness and Growth (MSCGI) support the policies and programmes outlined in the Ghana Shared Growth Development Agenda (GSGDA) II for 2014-17 and the President's Co-ordinated Programme of Economic and Social
    Policies, 2014-2020 -- An Agenda for Transformation.
    Terms of the Facility
    The terms of the credit facility are as follows:
    Loan amount -- US$150 million
    Repayment period -- 25 years
    Grace period -- 5 years
    Interest rate -- 1.25 per cent p.a. on the withdrawn credit balance
    Maximum commitment charge -- 0.5 per cent of 1 per cent p.a. on unwithdrawn credit balance
    Service charge -- 0.75 per cent of 1 per cent on withdrawn balance
    Closing date -- June 2016
    Grant Element -- 38.75 per cent

    Organisation of the Operations

    The proposed operation has been organised around two strategic pillars namely:

    Pillar 1:Strengthen institutions for more predictable fiscal

    outcomes.

    Pillar 2: Enhance the productivity of public spending.

    Pillar 1: Strengthen institutions for more predictable fiscal outcomes: This pillar will support reforms designed to increase the comprehensiveness of fiscal accounting, strengthen oversight of the budget allocation and expenditure processes, and ensure that annual budget and medium-term fiscal plans are credible and consistent with the Government's broader development strategy.

    Pillar 2: Enhance the productivity of public spending: Pillar 2 will support reforms in Public Investment Management (PIM) and the governance of SOEs and their regulators to reduce technical and operational inefficiencies, improve the quality of public services, and enhance the economic impact of capital investment.

    Observations

    The Programme and the use of the Credit

    The Committee noted that the MSCGI is the first in a series of three DPF operations which combine an IDA Credit of US$150 million and a Policy-based Guarantee (PBG) up to the equivalent of US$400 million to cover securities issuance of up to US$1.0 billion by the Government. The proposed operation, the Committee was informed, would build

    upon the earlier initiatives of government and support its efforts to strengthen institutions for more predictable fiscal outcomes and enhance the productivity of public spending. Thus, the IDA Credit is intended to support efforts to consolidate ongoing fiscal stabilisation measures and support the policies outlined in the Ghana Shared Growth and Development Agenda (“GSGDA”) for

    2014-2017.

    The Committee was further informed that the proceeds of the credit basically will be used to support the implementation of the 2015 Budget and Economic Policy of Government and contribute to the attainment of key macroeconomic targets outlined in the Budget. The targets were highlighted as follows:

    i. Non-oil real GDP growth of 2.7 per cent.

    ii. Overall real GDP (including oil) growth of 3.9 per cent.

    iii. An end year inflation target of 11.5 per cent.

    iv. Overall budget deficit equivalent to 6.5 per cent of GDP.

    v. Gross international reserves of not less than 3 months of import cover of goods and services.

    Financial Implication and Impact on Debt Stock

    The Committee was informed that the credit facility is highly concessional with standard IDA terms given that the grant component of 38.78 per cent is higher than the country's minimum grant requirement of 35 per cent. Further, the facility, particularly the proposed PBG of up to US$400 million would support the government's strategy of refinancing

    existing, external and domestic debts without increasing the total debt stock. Also the bond proceeds of US$1.0 billion would enable an early payback of the US$531 million sovereign bond due in 2017 with the remaining amount used for refinancing existing domestic debt.

    Expected Outcomes

    The underlisted were outlined as the expected outcomes of the Credit Facility:

    i. Improved control over the wage bill

    ii. Better management of government subsidies and arrears

    iii. Enhanced debt management capacity

    iv. Stronger governance of SOEs

    v. More effective public investment management

    vi. Reinforcing social protection in a context of macroeconomic transition.

    In addition, the PBG will enable Ghana to access longer-term refinancing resources at more attractive rates, extend the maturity of Ghana's debt and lower the interest cost of domestic debt repayments.

    Conclusion and Recomemdation

    The Committee, after a careful examination of the facility, recommends to the House to adopt its Report and approve by Resolution, the Request for approval of the Financing Agreement between the Government of the Republic of Ghana and the International Development Association (IDA) for an

    amount of one hundred and six million, seven hundred thousand Special Drawing Rights [(SDR 106,700,000.00) (USD150.00 million equivalent)] to support the Macro- economic Stability for Competitiveness and Growth Development Policy Financing in accordance with article 181 of the 1992 Constitution, section 7 of the Loans Act, 1970 (Act 335) and Order 169 of the Standing Orders of the Parliament of Ghana and the Identity Agreement between the Government of the Republic of Ghana and the International Development Association (IDA) for a Policy-based Guarantee of four hundred million (US$400 million) in respect of the First Macroeconomic Stability for Competitiveness and Growth Development Policy Financing in accordance with article 181 of the 1992 Constitution, section 7 of the Loans Act, 1970 (Act 335) and Order 169 of the Standing Orders of the House.

    Respectfully submitted.
    Dr Anthony A. Osei 11:15 a.m.
    Mr Speaker, I beg to second the Motion. But in doing so, I would like to remind the Hon Chairman that the two conclusions he has read refer to two separate Reports. Because they have been written in one; he is asking us to adopt both.
    So, let us assume that the second part was not on record. What we are looking at is the Motion to approve a budget support of US$150 million, which is coming at the back of the Agreement reached with the International Monetary Fund (IMF). It is a budget support from the World Bank that requires some conditions.
    The Ministry of Finance was supposed to give us copies of the letters affirming that those prior conditions have been met. As I speak, I do not have those letters. So, I cannot confirm whether they
    Dr Anthony A. Osei 11:15 a.m.


    are true. They said the letters were available and they would make them available to the Committee, so that we could confirm that those prior conditions have been met.

    The Hon Deputy Minister was there. There are about 11 prior conditions that he is supposed to furnish me with. Would he want me go on faith? Otherwise, if he has them here, he could table them, then I would be in a more comfortable position to continue supporting the Motion.

    Mr Speaker, it is very important. These are prior conditions for the House, so that the House can confirm definitely that they met them. I do not understand why we do not have them. They sent them to the World Bank. They should bring them to Parliament and they do not want to bring them. Why?

    Mr Speaker, so, if I could rest my contribution and the Hon Minister could assure this House that if they do not have them here, they would bring them, so that the House would have it as part of its records, I would appreciate that, and continue with my contribution.
    Mr Speaker 11:15 a.m.
    Hon Member for Old Tafo and Ranking Member for the Finance Committee, you know the rule of the House. Unless the Motion is seconded, I cannot open the floor.
    Dr A. A. Osei 11:15 a.m.
    Mr Speaker, I seconded the Motion, and I was contributing.
    Mr Speaker 11:15 a.m.
    So, what you should have done from the beginning was to -- You have asked him that the document should be laid. I will call him at the appropriate time. Raise all the issues, I will call the Hon Minister at the appropriate time to speak on the issues that you would raise.
    So, conclude, so that I can open the floor for Hon Members to comment on the Motion.
    Dr A. A. Osei 11:15 a.m.
    Mr Speaker, if I would recall, they said they had met eleven prior conditions. Generally speaking, those prior conditions deal with the items on page 7 of the Report: --
    “i. Improved control over the wage bill
    ii. Better management of government subsidies and arrears
    iii. Enhanced debt management capacity
    iv. Stronger governance of SOEs
    v. More effective public investment management
    vi. Reinforcing social protection in a context of macroeconomic transition.”
    Mr Speaker, as I said, that this is coming at the back of the conclusion or the approval of the IMF facility, is not surprising. The Hon Minister had already programmed it in the budget that we approved in November, 2014. So, it is now that Ghana and the World Bank have seen it necessary to approve of it. It should have come earlier, perhaps, the Ministry or the Bank of Ghana could have avoided all the interventions they are doing now and done this earlier.
    As I said, it is part of the weakness of the programme design of the IMF where even though we needed the money in the first quarter, they waited till now that we are in the third quarter and begin to face some challenges.
    My advice to the Hon Minister is that, next time, he should let us agree that such budget support comes in the first quarter, so that we would be more comfortable to avoid what happened in May and June, when we waited till the Ghanaian cedi went to US$4.5 equivalent, and now, we have to inject about US$700 million in two months to smoothen it.
    Question proposed.
    Mr Speaker 11:15 a.m.
    Hon Minister for Finance, the Hon Ranking Member for the Finance Committee has raised some issues. Do you want to respond now?
    Minister for Finance (Mr Seth E. Terpker) 11:15 a.m.
    Mr Speaker, we have taken note of the concerns of the Hon Ranking Member and the Committee members, and we would make the documents available promptly. In fact, it is available on the web page of the World Bank in line with their transparency, and we have made them available.
    I also would want to mention that, each of the underlining prior actions and policies are actually in our 2015 Budget and in the home grown policy that preceded the IMF programme and the policy issues that were to be bossed on both the IMF and the World Bank. These are issues that the House is very much aware of. We would make them available.
    Dr A. A. Osei 11:15 a.m.
    Mr Speaker, did he say it is on the web page of the World Bank? My request was that formally, he should make it available to this House by a certain date, so that we could be sure. I do not want to use the World Bank to confirm what he would want to do for this House. This is an august House on its own.
    Mr Terkper 11:15 a.m.
    Mr Speaker, my first statement was that we would make them available to Hon Members, and I said that there was no reason at all not to provide them to the House because they are already freely available.
    Mr Speaker 11:15 a.m.
    Very well.
    Question put and Motion agreed to.
    RESOLUTIONS 11:15 a.m.
    Minister for Finance (Mr Seth E. Terpker) 11:15 a.m.
    Mr Speaker, I beg to move, that
    WHEREAS by the provisions of article 181 of the Constitution and sections 3 and 7 of the Loans Act, 1970 (Act 335), the terms and conditions of any loan raised by the Government of the Republic of Ghana on behalf of itself or any public institution or authority shall not come into operation unless the said terms and conditions have been laid before Parliament and approved by a Resolution of Parliament;
    PURSUANT to the provisions of the said article 181 of the Constitution and sections 3 and 7 of the Loans Act, 1970 (Act 335), at the request of the Government of the Republic Ghana acting through the Minister responsible for Finance, there has been laid before Parliament the terms and conditions of a Financing Agreement between the Government of the Republic of Ghana and the International Development Association (IDA) for an amount of one hundred and six million, seven hundred thousand Special Drawing Rights (SDR 106, 700,000) (equivalent to US$150 million) to support the Macroeconomic Stability for Competitiveness and Growth Development Policy Financing.
    THIS HONOURABLE HOUSE HEREBY 11:15 a.m.
    Mr James K. Avedzi 11:15 a.m.
    Mr Speaker, I beg to second the Motion.
    Question put and Motion agreed to.
    Resolved accordingly.
    Mr Speaker 11:25 a.m.
    Item number 10. Do we have the Reports?
    Mr Avedzi 11:25 a.m.
    Mr Speaker, it is the same Report --
    Mr Speaker 11:25 a.m.
    Very well.
    Item number 10, Chairman of the Finance Committee?
    Suspension of Standing Order 80 (1)
    Mr James K. Avedzi 11:25 a.m.
    Mr Speaker, I beg to move, that notwithstanding the provisions of Standing Order 80 (1) which require that no Motion shall be debated until at least, forty-eight hours have elapsed between the date on which notice of the Motion is given and the date on which the Motion is moved, the Motion for the adoption of the Report of the Finance Committee on the Indemnity Agreement between the Government of the Republic of Ghana and the International Development Association (IDA) for a Policy-based Guarantee of four hundred million United States dollars (US$400 million) in respect of the First
    Macroeconomic Stability for Compe- titiveness and Growth Development Policy Financing may be moved today.
    Dr Anthony A. Osei 11:25 a.m.
    Mr Speaker, I beg to second the Motion.
    Question put and Motion agreed to.
    Resolved accordingly.
    MOTIONS 11:25 a.m.
    Chairman of the Committee (Mr James K. Avedzi) 11:25 a.m.
    Mr Speaker, I beg to move, that this Honourable House adopts the Report of the Finance Committee on the Indemnity Agreement between the Government of the Republic of Ghana and the International Development Association (IDA) for a Policy-based Guarantee of four hundred million United States dollars (US$400 million) in respect of the First Macroeconomic Stability for Competitiveness and Growth Development Policy Financing.
    Mr Speaker, in doing so, I present the Committee's Report
    Introduction
    The request for approval of the Identity Agreement between the Government of the Republic of Ghana and the International Development Association (IDA) for a Policy-based Guarantee of four hundred million United States dollars (US$400 million) in respect of the First Macroeconomic Stability for Compe- titiveness and Growth Development Policy Financing was presented by the Hon Minister for Finance, Mr Seth Emmanuel Terkper on Thursday, 9th July, 2015 in accordance with article 181 of the 1992 Constitution.
    Mr Speaker referred the request to the Finance Committee for consideration and report in accordance with Order 169 of the Standing Orders of the House.
    The Committee was assisted at its deliberations by the Hon Minster for Finance, Mr Seth Emmanuel Terkper and his deputy, Mr Cassiel Ato Baah Forson, and officials from the Ministry of Finance.
    The Committee appreciates the co- operation and assistance received from the Hon Minister, his deputy and officials during the deliberations.
    Reference
    The Committee referred to the following additional documents during its deliberations:
    The 1992 Constitution of Ghana
    The Standing Orders of the Parliament of Ghana
    Loans Act 1970 (Act 335)
    Background
    Ghana has over the past decade made phenomenal strides in economic growth with real GDP growth rising steadily from 3.7 per cent in 2000 to 8.9 per cent before decelerating slightly to 7.2 per cent in 2013. Between 2011 and 2013 growth rates accelerated further averaging a remarkable 10.2 per cent per year with 2011 witnessing a record high GDP growth rate of 14.4 per cent. This success came on the back of a positive trend in terms of trade, large oil and gas discoveries, and commencement of oil production, substantial capital inflows, and a reputation for robust democratic institutions.
    From 2013 however the economy began to show signs of severe stress. Economic growth slowed from a previously high level, fiscal targets were missed despite significant measures to contain the deficit, exchange rate difficulties as a result to the cedi's depreciation, spike in inflation, energy rationing due to disruption in supply of gas from Nigeria, worsening terms of trade and the subsequent dwindling of international reserves.
    Fiscal deficits and currency depreciation caused the debt profile to rapidly deteriorate and interest payments on the public debt jumped to over 6 percent of GDP by 2014. The net public debt stock increased dramatically, rising from 38.7 percent of GDP in 2011 to 52 percent in 2013 and reaching 65 per cent in 2014. Overall inflation rose sharply, from 8.8 per cent in 2012 to 17 per cent in 2014, with non-food inflation increasing from 11.6 percent to 23.9 per cent.
    Government realising the severe impact of the crisis quickly developed a consolidated set of home grown polices to stem the further decline of the economy. These policies included revenue enhancing and fiscal consolidation measures which sought to broaden the tax base and thus spread the burden of national development on all citizens rather than the few who meet their tax obligations; and expenditure rationalisation policies which would help achieve the fiscal targets for the year.
    While these measures helped government to substantially address the challenges, 2014 ended with a fiscal deficit of 10.8 per cent of GDP against a target of 9 per cent; mainly due to shortfall in tax revenue, continuous shortfall in grants from Development Partners and overrun in compensation or personal emoluments.
    Chairman of the Committee (Mr James K. Avedzi) 11:25 a.m.


    To stabilise the economy and reassure domestic and external investors of its commitment to prudent macroeconomic policies, in August of 2014, the government began engaging the IMF for support which was subsequently granted in April 2015. To further consolidate the progress being made, Government again requested support from IDA in a three- phase operation called Macroeconomic Stability for Competitiveness and growth (MSCGI) Development Policy Financing

    (DPF).

    Justification of the Request

    Fiscal year 2012-14 has seen the economy come under severe stress from both domestic and external shocks. Government has responded to these shocks by implementing a number of policies and measures to reverse the trend. Notwithstanding Government's pro- grammes aimed at strengthening fiscal consolidation, significant institutional, policy and systems and process weaknesses continue to manifest themselves, thus limiting the impact of reforms already implemented and leading the country into an unsuitable fiscal path.

    Additionally, there is the need to make public expenditure more efficient and

    effective by continuing with the ongoing reforms in the Public Financial Management (PFM). This is to enhance the credibility of the budget which has hitherto been low and has adversely impacted service delivery efficiency in Government. This is an overarching problem mainly caused by institutional, behavioural and policy weaknesses. Until these weaknesses are addressed, efficient and effective fiscal consolidation will not be achieved.

    Given our challenging financial situation, it is anticipated that debt especially the Eurobond which may fall due in 2017, might be serviceable. Hence a guarantee negotiated with the World Bank to refinance existing external and domestic debt, without increasing the total debt stock. The bond proceeds of US$1.0 billion would enable an early payback of the US$531 million sovereign bond due in 2017 with the remaining amount used for refinancing existing domestic debt.

    Finally, the Macroeconomic Stability for Competitiveness and Growth (MSCGI) support the policies and programme outlined in the Ghana Shared Growth Development Agenda (GSGDA) II for 2014-17 and the President's Co-ordinated Programme of Economic and Social Policies, 2014-2020 -- An Agenda for Transformation.

    Terms of the Facility

    The terms of the credit facility are as follows:

    Loan amount -- US$150 million

    Repayment period -- 25 years

    Grace period -- 5 years

    Interest rate -- 1.25 per cent p.a on the withdrawn credit balance

    Maximum commitment charge -- 0.5 per cent of 1 per cent p.a. on unwithdrawn credit balance

    Service charge -- 0.75 per cent of 1 per cent p.a. on withdrawn balance

    Closing date -- June 2016

    Grant element -- 38.75 per cent

    Organisation of the Operations

    The proposed operation has been organised around two strategic pillars namely:

    Pillar 1:Strengthen institutions for more predictable fiscal outcomes.

    Pillar 2: Enhance the productivity of public spending

    Pillar 1: Strengthen institutions for more predictable fiscal outcomes: This pillar will support reforms designed to increase the comprehensiveness of fiscal accounting, strengthen oversight of the budget allocation and expenditure processes, and ensure that annual budget and medium-term fiscal plans are credible and consistent with the government's broader development strategy.

    Pillar 2: Enhance the productivity of public spending: Pillar 2 will support reforms in Public Investment Management (PIM) and the governance of SOEs and their regulators to reduce technical and operational inefficiencies, improve the quality of public services, and enhance the economic impact of capital investment.

    Observations

    The Programme and the use of the Credit

    The Committee noted that the MSCGI is the first in a series of three DPF operations which combines an IDA Credit of US$150 million and a Policy-based Guarantee (PBG) up to the equivalent of US$400 million to cover securities issuance of up to US$1.0 billion by the Government. The proposed operation, the Committee was informed, would build
    Dr A. A. Osei (NPP-- Old Tafo) 11:25 a.m.
    Mr Speaker, I beg to second the Motion designated as item number 11 on the Order Paper and in so doing, I offer some comments.
    Mr Speaker, this policy-based guarantee is to support what the Govern- ment calls a three-phased operation called Macroeconomic Stability for Competi- tiveness and Growth Development Policy Financing (MSCGDPF).
    Mr Speaker, let us be clear on what this is. This is not an additional loan per se. It is a credit risk guarantee to enhance the credibility of instruments that we may want to issue.
    Mr Speaker, page 6 of the Report reads and with your kind permission, I would want to read:
    “The Committee noted that the MSCGI is the first in a series of three DPF operations which combines an IDA Credit of US$150 million and a Policy-Based Guarantee (PBG) up to the equivalent of US$400 million to cover securities issuance of up to US$1.0 billion by the Government.”
    Mr Speaker, this House has already approved for the Government to issue a Eurobond of US$1 billion. This policy- based guarantee is supposed to serve as a guarantee for this bond, should we issue it.
    But I know that on the order paper, the Government is coming for US$1.5 billion. But this PBG is for US$1 billion. So, we need to keep that in mind. There are several ways of utilising it. For example, if some amount of the guarantee is used, it could literally bring the interest rate down.
    Mr Speaker, the reason we have to do this is that, currently, our sovereign ranking is not necessarily the best but when you get such a guarantee from an institution as the World Bank, it clears all kinds of tricks on the minds of the investors, knowing that the World Bank is a huge body and that if they are supporting issuance, then the risk of default is very small.
    So, in that sense, it is a good instrument. What I am wondering is, now that the Government is thinking about going to US$1.5 billion, whether it would be necessary to go back to augment this amount -- because clearly, if the Committee's Report is accurate, and that is what we were told, it was to support up to US1 billion. So, I think this is something that the Hon Minister should note.
    Mr Speaker, I would end here, because some of my Hon Colleagues may have some things to say about it.
    Thank you, Mr Speaker.
    Question proposed.
    Dr Mark Assibey-Yeboah (NPP - New Juaben South) 11:25 a.m.
    Mr Speaker, we have had three Eurobond issues. The first was in 2007, then 2013, and 2014. This would be our fourth foray into the Eurobond market. On each occasion, we have gone with a sovereign guarantee --
    Mr Speaker 11:25 a.m.
    Hon Members, the First Deputy Speaker takes the Chair. I will come back to take the Motion dealing with the mid-year review.
    MR FIRST DEPUTY SPEAKER
    Dr Assibey-Yeboah 11:31 a.m.
    Mr Speaker, I was making the point that in the past, Ghana issued Eurobond with a sovereign guarantee. Now, we are not going with a sovereign guarantee, because our credit rating is so poor that it is unlikely that we would get a very good yield on the market. This is how low we have sunk.
    We are going for a credit risk guarantee from the World Bank but it does not come for free. Instead of going with a sovereign guarantee and not paying anything, Ghana now has to go for this policy- based guarantee and pay for it.
    Mr Speaker, our debt - to - GDP ratio is nothing to write home about. We are in excess of 67 per cent. The signal we are sending to the investor community is that, on our own, we cannot have a handle on our macroeconomic situation. So, we would rather go to the World Bank and pay for them to issue us a credit risk guarantee. It does not send the best signal.
    Mr Speaker, there is also no guarantee that following this policy-based guarantee, our credit rating is going to improve. I would have wished that instead of going for this policy-based guarantee, we would consider ways of getting our macroeconomic situation in order, so that by fixing our macroeconomic indicators, naturally, our credit rating would improve.
    So, Mr Speaker, I know this foray into the Eurobond market has come to stay. My advice is that let us go back to using the sovereign guarantee. They can do that if they get the macroeconomic situation in order.
    Thank you, Mr Speaker.
    Minister for Finance (Mr Seth E. Terkper) 11:35 a.m.
    Mr Speaker, I beg to contribute to the Motion and to correct some erroneous impression that was created.
    Mr Speaker, a guarantee is a guarantee; and as with insurance, one does not take insurance because he is careless. He takes insurance because he is prudent and somebody's carelessness could cause harm to him. Therefore, I do not wish the notion that was just portrayed, that the reason for going for a guarantee is because he has somehow mismanaged; far from that. To that extent, even a sovereign guarantee, which the Hon Member advocates, is not necessarily given because you are in a bad state. It is given because you want to give an assurance. Therefore, I think we must understand the context of a guarantee.
    Secondly Mr Speaker, we cannot continue to offer sovereign guarantees for all our investments, and as I would indicate in the statement, which I am about to present, this is an instrument which middle income countries and even advanced countries use, and it must be seen as an alternative instrument, not a substitute, which adds to our diversity of insurance and guarantee instruments for our investments.
    It is the best approach for securing the Sankofa Project, which is going to bring on board the independent power producers (IPPs).
    Mr Speaker, let me also indicate that it is true that we have issued sovereign guarantees in 2013, 2014 and 2015, but the Hon Member should also have informed the House that part of those funds were actually used to refinance the 2007 Bond, and therefore, by the time we would have exhausted refinancing the loans on
    the bonds, which is a critical policy of the Government, the 2007 Bond would have ceased to exist, and therefore, we would not have had four bonds.
    Mr Speaker, let me also state that we just came to ask the House to amend the Petroleum Revenue Management Act (PRMA) to enable us establish a Sinking Fund to support our bonds.
    Therefore Mr Speaker, what we are doing, is adopting superior policies in order that we can manage our debts creditably and go to the market more confidently. I would not like the impression to be created that somehow we use only partial risk and indeed, credit risk guarantees only when the economy is in a bad state.
    Mr First Deputy Speaker 11:35 a.m.
    Yes, Hon Ranking Member?
    Dr A. A. Osei 11:35 a.m.
    Mr Speaker, I was up when the Hon Minister was speaking but
    -- 11:35 a.m.
    Mr First Deputy Speaker 11:35 a.m.
    I thought I would give you the opportunity to respond.
    Dr A.A.Osei 11:35 a.m.
    I have already contributed. But the correction here is that, we have not yet issued anything for 2015. The Hon Minister is seeking to go, but he said we had done that for 2013, 2014, and 2015.
    I know he is eager to go in September, but he has not gone yet. So, he should not mislead this House.
    Mr First Deputy Speaker 11:35 a.m.
    Yes, Hon Minister?
    It is becoming a ding-dong battle.
    Hon Minister, let us hear you, otherwise, I will put the Question.
    Yes, Hon Member?
    Mr Kwaku Agyeman-Manu (NPP- Dormaa Central) 11:35 a.m.
    Thank you Mr Speaker.
    Mr Speaker, in trying to add my voice to the debate and urging my Hon Colleagues to support the Motion, I would just like to sound a note of caution to the Hon Finance Minister.
    In the first place, he is telling us that previous borrowings had been used to refinance other things. Then he goes ahead to tell us in this Report that the credit basically would be used to support the implementation of the 2015 Budget and Economic Policy of Government and contribute to the attainment of key macro targets and things like that.
    Mr Speaker, this Economic Policy for 2015 includes debt servicing. So, what is the guarantee that this loan that we are going to borrow, part of it would not be used also to refinance loans that we have already contracted?
    Mr Speaker, the Hon Finance Minister is telling us that the fact that we are going for something --
    rose
    Mr First Deputy Speaker 11:35 a.m.
    Hon Finance Minister, I will give you the opportunity to respond after he has concluded.
    Yes, go ahead.
    Mr Agyeman-Manu 11:35 a.m.
    Thank you Mr Speaker.
    Mr Speaker, when one has not identified risk, when one does not see a real risk eminent, one does not go for insurance. When there is no risk in any transaction, any activity, one does not go for insurance for anything.
    A person goes for insurance to protect and try to mitigate the impact of whatever eventuality could happen. So, the Hon
    Finance Minister cannot tell us that the fact that he is going this way, means that we have other problems somewhere else.
    Immediately, he moves from his traditional activity to something else; he should tell us exactly what has motivated him to go that way.

    Mr Speaker, like I said earlier, I would just like to sound a note of caution. All that I am doing, in the Akan Language, we say that “se bone ba ekura tiri mu a, wo ye den ara a obeto ngo mu”, to wit, when the mouse decides to do bad things, harm you in your kitchen, no matter what you do, it would still fall in the palm oil that you have put in the kitchen.

    So, no matter what we say, the House will approve the loan, but I would just like to quote from the Bible. Ghana should remember Lot's wife. We should remember Lot's wife. We should never forget the challenges Greece is facing at the moment, and where we are going.

    Mr Speaker, I would sound a note of caution, that if we are not careful, one day, we shall be utilised; we shall be used; we shall see exactly what Greece is going through at the moment.

    Thank you.
    Mr Terpker 11:35 a.m.
    Mr Speaker, I would just wish to state, in the first place that, there is a correction.
    The Hon Member was referring to the budget support element of the Report in his first point. What he stated was budget support, which is the first element of the
    Mr Terpker 11:35 a.m.


    Report. The Report is supporting two facilities. So, we need to make that clear. In fact, as the Hon Ranking Member said, this does not constitute a new amount, unless it crystalizes on the occurrence of the risk.

    But Mr Speaker, I am baffled by the point that is being made. This is because somehow, we are being told that when the State issues a guarantee, there is no risk. But when the State opts to use another institution for a guarantee, either a partial risk or a credit risk guarantee, then that is a premise for risk.

    Mr Speaker, a guarantee is a guarantee, and a guarantee, whether it is by the State or it is by the World Bank or African Development Bank, as we are seeking to do, is to underwrite risk.

    Mr Speaker, there have been occasions in this country when our own sovereign guarantees were called and they were called because we were underwriting risks, and therefore, we should not get away with the notion.

    Mr Speaker, let me also state -- and I notice that there are students who are observing this debate -- for the benefit of the students -- they should not go away with the notion that we take insurance only when there is a risk.

    Mr Speaker, it is a prudent thing to take insurance, and that is what we should be educating every Ghanaian on -- whether it is life insurance, accident insurance or in fact, it is insurance for an investment.

    Mr Speaker, I would just like to make this contribution.
    Mr First Deputy Speaker 11:35 a.m.
    Yes, Hon Deputy Minority Leader?
    Mr Dominic Nitiwul 11:45 a.m.
    Mr Speaker, he did not understand what the Hon Member said. He said when there is a potential risk or an eminent risk, we insure, which is right.
    But Mr Speaker, ask him whether if we take United States Treasury Bills for example, we insure them. Because it is zero risk.
    Why is it that they do not insure it? It is because it is zero risk. Even Bank of Ghana Treasury Bills or Bonds that they always pay, people do not insure them because of that -- because they would pay. It is zero risk.
    When there is zero risk, a person is likely not to insure it -- not because --
    Mr First Deputy Speaker 11:45 a.m.
    Hon Deputy Minority Leader, you asked me to ask him. So, he has the right to answer.
    Hon Minister, could you answer the Question?
    Mr Nitiwul 11:45 a.m.
    But the Hon Member was saying when there is a risk or when there is a possibility of a risk, we insure.
    Mr Terkper 11:45 a.m.
    Mr Speaker, the global financial crisis has taught us that even those credits taken and given by preeminent financial institutions can go down to zero.
    The event in Greece today, tells us that bonds issued by Government can be useless. Therefore, this notion that somehow when a Government issues a bond, it is zero risk, is not correct, Mr Speaker.
    Mr First Deputy Speaker 11:45 a.m.
    Yes, Hon Ranking Member?
    Dr A. A. Osei 11:45 a.m.
    Mr Speaker, I am surprised my good Friend is arguing. We are saying the same thing. All we are saying is that the best insurance is good economic management. That is all. He agrees and I agree; we agree. That is why Germany is different from Greece. That is all we are saying. So, we all want to be Germany, not Greece. For that one, he cannot disagree.
    Mr First Deputy Speaker 11:45 a.m.
    Yes, Hon Member for Dormaa Central?
    Mr Agyeman-Manu 11:45 a.m.
    Mr Speaker, I said earlier that no matter what this thing will go -- but the Hon Finance Minister is trying to give us alternatives. But he is refusing to tell us the cost implications and the cost benefit analysis of our sovereign guarantee to the new way that he is trying to go. What are the cost implications, Mr Speaker? The Hon Finance Minister should tell us before we approve this loan.
    Thank you, Mr Speaker.
    Mr First Deputy Speaker 11:45 a.m.
    I do not know whether the Hon Finance Minister would like to respond. Otherwise, I will put the Question -- [Uproar.]
    Order! Order!
    Hon Members, I believe the Motion has been moved and seconded and it has been subjected to consideration by the House. So, it is time for me to put the Question.
    rose
    Mr First Deputy Speaker 11:45 a.m.
    Yes, Hon Member?
    Dr Mark Assibey-Yeboah 11:45 a.m.
    Mr Speaker, this guarantee comes at a cost. That is why the Hon Member is trying to find out from the Hon Minister. How much will it cost the people of Ghana for going for
    this guarantee? The sovereign guarantee costs us nothing. But to go this route, there is a cost and that is what we would want to find out from the Hon Minister.
    Mr First Deputy Speaker 11:45 a.m.
    Very well --
    Hon Minister?
    Mr Terkper 11:45 a.m.
    Mr Speaker, the cost of a guarantee can be seen when it crystalises. Mr Speaker, as I have said, we are a nation. Mr Speaker, I would just want to repeat that, the notion that somehow our sovereign guarantees are costless, is wrong.
    Mr Speaker, the reason is that immediately it crystalises, we go into the budget to provide the money and at that point, it becomes very costless and that is why I agree with the Hon Ranking Member that it is about good management. And indeed, an institution like the World Bank would not have provided us with a guarantee to this extent if they did not see the potential of good management of the economy.
    Mr First Deputy Speaker 11:45 a.m.
    Very well.
    Hon Members, I think that he has explained himself away. We could go on ad infinitum. He talked about the point of crystalisation. So, let us look at it that way and then we can make some progress.
    Dr Assibey-Yeboah 11:45 a.m.
    Mr Speaker, the Hon Minister said that the cost would only be known when the guarantee crystalises; that is not true. Ghana will make some payments in view of this guarantee. That is what we want to find out. How much is Ghana paying for this guarantee?
    Mr First Deputy Speaker 11:45 a.m.
    Order! Order!

    Can we have some order, please?
    Mr First Deputy Speaker 11:45 a.m.
    Very well --
    Hon Members, he says it is right in the Report.
    Question put and Motion agreed to.
    Yes, Hon Majority Leader?
    Mr Bagbin 11:45 a.m.
    Mr Speaker, we can now take the consequential Resolution -- item number 12.
    Mr First Deputy Speaker 11:45 a.m.
    Yes, Hon Minister for Finance?
    RESOLUTIONS 11:45 a.m.
    Minister for Finance (Mr Seth E. Terkper) 11:45 a.m.
    Mr Speaker, I beg to move, that
    WHEREAS by the provisions of article 181(5) of the Constitution the terms and conditions of any international business or economic transaction to which the Govern- ment of Ghana is a party shall not come into operation unless the said terms and conditions have been laid before Parliament and approved by Parliament by a Resolution supported by the votes of a majority of all Members of Parliament;
    PURSUANT to the provisions of the said article 181(5) of the Constitution, and at the request of the Government of Ghana acting through the Minister responsible
    for Finance, there has been laid before Parliament the terms and conditions of a Indemnity Agreement between the Government of the Republic of Ghana and the International Development Association (IDA) for a Policy-Based Guarantee of four hundred million United States dollars (US$400 million) in respect of the First Macroeconomic Stability for Competi- tiveness and Growth Development Policy Financing.
    THIS HONOURABLE HOUSE 11:45 a.m.
    Mr James K. Avedzi 11:45 a.m.
    Mr Speaker, I beg to second the Motion.
    Question put and Motion agreed to.
    Resolved accordingly.
    Mr First Deputy Speaker 11:45 a.m.
    Yes, Hon Majority Leader?
    Mr Bagbin 11:45 a.m.
    Mr Speaker, item number
    13.
    Mr First Deputy Speaker 11:45 a.m.
    Yes, Hon Chairman of the Committee?
    MOTIONS 11:45 a.m.
    Mr Avedzi 11:45 a.m.
    Mr Speaker, I beg to to move, that notwithstanding the provisions of Standing Order 80 (1), which require
    that no Motion shall be debated until at least forty-eight hours have elapsed between the date on which notice of the Motion is given and the date on which the Motion is moved, the Motion for the adoption of the Report of the Finance Committee on the Loan Agreement between the Government of the Republic of Ghana and the African Development Fund for an amount equivalent to forty million Units of Accounts (UA40,000,000 [equivalent to US$56.80 million] to support the Public Financial Management and Private Sector Competitiveness Support Programme -- Phase I (PFMPSCSP) may be moved today.
    Dr A. A. Osei 11:45 a.m.
    Mr Speaker, since the Hon Chairman is moving for item 13, I beg to second the Motion -- [Laughter.]
    Question put and Motion agreed to.
    Resolved accordingly.
    Mr First Deputy Speaker 11:45 a.m.
    I believe we will move on to item numbered 14.
    Yes, Hon Chairman of the Committee?
    Loan Agreement between GoG and African Development Fund
    (UA40, 0000, 000/US$56.80 million)
    Chairman of the Committee (Mr James K. Avedzi) 11:45 a.m.
    Mr Speaker, I beg to move, that this Honourable House adopts the Report of the Finance Committee on the Loan Agreement between the Government of the Republic of Ghana and the African Development Fund for an amount equivalent to forty million Units of Accounts (UA40,000,000 [equivalent to US$56.80 million] to support the Public Financial Management and Private Sector Competitiveness Support Programme -- Phase I (PFMPSCSP).
    Mr Speaker, in doing so, I present your Committee's Report.
    Introduction
    The request for approval of the Loan Agreement between the Government of
    the Republic of Ghana and the African Development Fund for an amount equivalent to forty million Units of Accounts (UA 40,000,000) [equivalent to US$56.80 million] to support the Public Financial Management and Private Sector Competitiveness Support Programme -- Phase I (PFMPSCSP) was presented to the House by the Hon Minister for Finance, Mr Seth Emmanuel Terkper, on Thursday, 9th July, 2015, in accordance with article 181 of the 1992 Constitution.
    The Rt Hon Speaker referred the request to the Finance Committee for consideration and report in accordance with Order 169 of the Standing Orders of the Parliament of Ghana.
    PURSUANT to the referral, the Committee met with the Hon Deputy Minister for Finance, Mr Cassiel Ato Baah Forson and officials from the Ministry of Finance and considered the referral. The Committee is grateful to the Hon Deputy Minister and officials from the Ministry for attending upon it.
    Reference
    The Committee referred to the following additional documents during its deliberations:
    The 1992 Constitution of Ghana
    The Standing Orders of the Parliament of Ghana
    Loans Act 1970 (Act 335)
    Background
    The overall budget support programme is currently supported by ten Multi-Donor Budget Support (MDBS) members which are signatories to the MDBS Framework Memorandum (FM), which describes the common framework for implementation of grant and loan agreement to support the development agenda of the government.
    Dr A. A. Osei(NPP -- Old Tafo) 11:55 a.m.
    Mr Speaker, I beg to second the Motion. In so doing, I reiterate the fact that this is another budget support facility coming on the heels of the International Monitory Fund (IMF) Approved Programme.
    The African Development Fund, having seen that the IMF programme has been approved, just like the World Bank, has now found it necessary for its Board to also disburse this year's portion of the budget support. Here also, I think that there are some prior conditions and I would want to request the Ministry of Finance to make those documents the prior conditions, available for the record of this House, so that we can be sure that we have copies of them.
    Mr Speaker, either than that, the terms are quite generous and similar to the ones proposed by the World Bank.
    With these few words, I would urge Hon Members to support the Motion.
    Mr First Deputy Speaker 11:55 a.m.
    Hon Minister, I believe that you heard him.
    Can you make those documents available to the House?
    Mr C. A. Baah Forson 11:55 a.m.
    Mr Speaker, as the Hon Minister rightly said, the concern of the Hon Ranking Member is noted and we would work to provide the details to the House.
    rose
    Mr First Deputy Speaker 11:55 a.m.
    Hon Member, please, sit down.
    I have not said it is for the consideration of the House. Not yet. Please take your seat.
    Question proposed.
    Mr Alexander K. Afenyo-Markin ( NPP -- Effutu) 11:55 a.m.
    Mr Speaker, it appears that Ghana is committing itself to too many loans. We have just gone for the World Bank -- International Development Association (IDA) support. We are talking about African Development Bank (AfDB) and now, another funds for budgetary support.
    Mr Speaker, is it the case that we are unable to raise sufficient revenue from taxation? Or that whatever moneys we raise, we are unable to spend same prudently? These are no free moneys, they come at a cost. But can the Government and the Hon Minister for Finance tell this House with confidence that in all, past loans that were procured, the same were prudently utilised? If I am challenged, I would just give one example. I would go no further, but just one, and it is obvious; they know.
    Mr Speaker, loans were procured at a compound interest for a very laudable initiative. Mr Speaker, we are in 2015. Way back in 2012, moneys were procured for afforestation, guinea fowl, et cetera [Interruption] -- Mr Speaker, what happened to these projects, only God knows. Meanwhile, come November this year, the Government of Ghana is going to cough GH¢299 million. Meanwhile, we have nothing to show for what we procured this loan for.
    Again, on our own revenue, our own resources in 2014 -- the Public Interest and Accountability Committee (PIAC) reported that in 2013, our oil revenue was
    in excess of US$ 863 million, and PIAC on record is reporting that we spent over a hundred million Ghana cedis for afforestation projects and in their own report, there is no evidence of same.
    rose
    Mr First Deputy Speaker 11:55 a.m.
    Hon Deputy Majority Leader, are you up on a point of order?
    Mr Agbesi 11:55 a.m.
    Yes, Mr Speaker.
    Mr First Deputy Speaker 11:55 a.m.
    Very well.
    Mr Agbesi 11:55 a.m.
    Mr Speaker, the Motion which has been moved and seconded calls for the approval of a specific amount. That is the Motion that has been moved and seconded.
    Mr Speaker, it is not a general Motion. It is very specific. My Hon Colleague should be very specific on this Motion, whether he supports it or otherwise. If he is against it, then he should say so. The Motion is very specific and he must go to the point about it.
    Mr First Deputy Speaker 11:55 a.m.
    Hon Member, can you start to wind up with your submission?
    Mr Afenyo-Markin 11:55 a.m.
    Mr Speaker, in responding to the point of order raised by a very learned senior Hon Member, may I refer --
    Mr First Deputy Speaker 11:55 a.m.
    Hon Member, I have asked you to continue with your submission.
    Mr Afenyo-Markin 11:55 a.m.
    Mr Speaker, I am referring this House to article 41(f) of the 1992 Constitution.With your leave, I beg to quote:
    “41 The exercise and enjoyment of rights and freedoms is inseparable from the performance of duties and obligations, and accordingly, it shall be the duty of every citizen --
    (f) to protect and preserve public property and expose and combat misuse and waste of public funds and property;”
    Mr Speaker, fortified by this provision of the Constitution, I am submitting -
    Mr First Deputy Speaker 11:55 a.m.
    Hon Member, I have asked you to proceed with your submission. Otherwise, I will cut you off. Go ahead and make your submission.
    Mr Afenyo- Markin 11:55 a.m.
    Mr Speaker, fortified by what I have just read, it is my submission that in principle, I am not against the Government of Ghana procuring this facility by way of supporting its budget. However, the records of this Government, with respect to the utilisation of our oil revenue, which has been reported by PIAC, gives us the cause to question the sincerity of Government, the ability and the competence of Government in the utilisation of such loans.
    Mr Speaker, if Government had previously managed its own resources very well, then Government will not have resorted to go for these loans at an additional cost to the taxpayer.
    Mr Speaker, as we speak, even moneys that came from the oil revenue, the GH¢ 35 million to Microfinance and Small Loans Centre (MASLOC) are still missing. We
    Mr First Deputy Speaker 11:55 a.m.
    Hon Member, we are dealing with a particular Motion. Please, we are dealing with a particular Motion.
    Mr Afenyo-Markin 11:55 a.m.
    Very well.
    Mr Speaker, to conclude on that point, the whereabouts of these moneys - it is important that the Finance Ministry ensures transparency, so that it gives the donors the confidence --
    Mr First Deputy Speaker 11:55 a.m.
    Hon Member, begin to conclude.
    Mr Afenyo-Markin 12:05 p.m.
    Very well.
    So, we need to conduct ourselves in a manner that these lenders -- these development partners will have confidence in us that, we are able to utilise our own resources well, so that they will give us more money. But if we go there because we have abused our own, Mr Speaker, I do not support that.
    We have to clean our homes; we have to do house cleaning; we have to know how to utilise our own resources, so that when we borrow, we would borrow out of necessity.
    Mr Speaker, on that note, I support this Motion.
    Mr First Deputy Speaker 12:05 p.m.
    Thank you very much.
    Hon Members, I get the sense of the House. So, I will put the Question.
    Question put and Motion agreed to.
    Mr Agbesi 12:05 p.m.
    Mr Speaker, item number 15 -- Resolution.
    Mr First Deputy Speaker 12:05 p.m.
    Resolution numbered 15, Hon Minister for Finance.
    RESOLUTIONS 12:05 p.m.
    Minister for Finance (Mr Seth E. Terkper) 12:05 p.m.
    Mr Speaker, I beg to move, that
    WHEREAS by the provisions of article 181 of the Constitution and sections 3 and 7 of the Loans Act, 1970 (Act 335), the terms and conditions of any loan raised by the Government of the Republic of Ghana on behalf of itself or any public institution or authority shall not come into operation unless the said terms and conditions have been laid before Parliament and approved by a Resolution of Parliament;
    PURSUANT to the provisions of the said article 181 of the Constitution and sections 3 and 7 of the Loans Act, 1970 (Act 335), at the request of the Government of the Republic Ghana acting through the Minister responsible for Finance, there has been laid before Parliament the terms and conditions of a Loan Agreement between the Government of the Republic of Ghana and the African Development Fund for an amount equivalent to forty million Units of Accounts (UA40,000,000 [equivalent to US$56.80 million] to support the Public Financial Management and Private Sector Competitiveness Support Programme -- Phase I
    (PFMPSCSP).
    THIS HONOURABLE HOUSE 12:05 p.m.
    Mr James K. Avedzi 12:05 p.m.
    Mr Speaker, I beg to second the Motion.
    Question put and Motion agreed to.
    Resolved accordingly.
    MOTIONS 12:05 p.m.
    Chairman of the Committee (Mr James K. Avedzi) 12:05 p.m.
    Mr Speaker, I beg to move, that notwithstanding the provisions of Standing Order 80 (1) which require that no Motion shall be debated until at least, forty-eight hours have elapsed between the date on which notice of the Motion is given and the date on which the Motion is moved, the Motion for the adoption of the Report of the Finance Committee on the Loan Agreement between the Government of the Republic of Ghana and Kreditanstalt fur Wiederaufbau (KfW), Frankfurt am Main for an amount of seventeen million, three hundred and ten thousand euros (€17,310,000) to co- finance Multi-Donor Budget Support (MDBS) Programme, may be moved today.
    Dr Anthony A. Osei 12:05 p.m.
    Mr Speaker, I beg to second the Motion.
    Question put and Motion agreed to.
    Resolved accordingly..
    Loan Agreement between GOG/ KfW/Frankfurt am Main
    Chairman of the Committee (Mr James K. Avedzi) 12:05 p.m.
    Mr Speaker, I beg to move, that this Honourable House adopts the Report of the Finance Committee on the Loan Agreement between the Government of the Republic of Ghana and Kreditanstalt fur Wiederaufbau (KfW), Frankfurt am Main for an amount of seventeen million, three hundred and ten thousand euros (€17,310,000) to co- finance Multi-Donor Budget Support (MDBS) Programme.
    Introduction
    The request for approval of the Loan Agreement between the Government of the Republic of Ghana and Kreditanstalt Fur Wiederaufbau (KfW), Frankfurt Am Main for an amount of seventeen million, three hundred and ten thousand euros (of €17,310,000 million) to co-finance The Multi-Donor Budget Support (MDBS) Programme was presented to the House by the Minister for Finance, Mr. Seth Emmanuel Terkper on Thursday, 9th July, 2015, in accordance with article 181 of the 1992 Constitution. The Rt Hon Speaker referred the request to the Finance Committee for consideration and report in accordance with Order 169 of the Standing Orders of the House.
    Further to the referral, the Committee met and was assisted in its deliberations by the Hon Deputy Minister for Finance Mr Cassiel Ato Baah Forson and officials from the Ministry of Finance.
    The Committee is grateful to the Hon Deputy Minister and officials for their assistance.
    Dr Anthony A. Osei(NPP -- Old Tafo) 12:05 p.m.
    Mr Speaker, I beg to second the Motion and to reiterate the issue about why it is important for us to live by Agreements.
    Mr Speaker, if Government had done what it was supposed to do -- There are two components of this loan; one should have come in 2013 but it did not because Government failed to meet certain obligations. The other one was supposed to have come in 2014; it did not come. So, the German Government failed to disburse it. So, when we talk about donors not disbursing, it is not because they do not want to disburse, it is because we have not met our obligations.
    Mr Speaker, page two of the Committee's Report, with your kind permission, I would like to read:
    “…€9.589 million represents commitment for 2013 financial year and the remaining €7.727 million is for 2014 financial year, which are both outstanding…”
    Mr Speaker, a sovereign nation like Ghana gets €17 million for two years, which they are now going to disburse and we act like we are happy. The situation should not arise where any Government can say that because we are misbehaving, it will not disburse. This is essentially what we are doing now. So in 2015, we are now going back to say, alright, it is not additional money, it is money that has been committed years back. This is only €17 million for budget support.
    Mr Speaker, we would want to urge the Ministry, that as long as they are partners with the Multi-Donor Budget Support (MDBS) Programme, they should make sure that we meet our obligations. This is because if we do not, we will ruin ourselves in the situation and we will always say that donors are not disbursing,
    as if they do not want to disburse. The true reason is that we fail to meet our obligation.
    Mr Speaker, have you seen what is happening to Greece? If we are not careful and we do not meet our commitments, our banks would be shut for days; we cannot afford that.

    Yes, I know we are beggars. But even beggars have rights and if they did not disburse, we should have rejected this amount. Yes, how much is €17 million times 1.5?

    Mr Speaker, a few million cedis -- this is the money that went to Mr Woyome -- GH¢51 million. We have the money; do we not? We could have, as a sovereign nation, rejected this amount. We gave a loan of GH¢50 million interest free to Rlg company and now, we are borrowing €17 million; they did not come to Parliament.

    I can go on and on, but please, for our own sovereignty and for our own respectability, let us begin to reject these types of loans, especially, since we have alternatives -- the alternatives being those monies that I have mentioned.

    If I go to the Ghana Youth Employment and Entrepreneurial Development Agency (GYEEDA), another GH¢100 million, then we are borrowing €17 million.

    Mr Speaker, please, let us begin to do the right thing, so that we do not have the German Government making a mockery of Ghana.

    With those few words, I thank you.
    Minister for Employment and Labour Relations (Mr Haruna Iddrisu)(MP) 12:15 p.m.
    Mr Speaker, thank you very much for the opportunity to associate myself with the Motion and to urge Hon Members to support the Motion.
    Mr Speaker, let me emphasise that prior to the Hon Minister for Finance and the Government committing Ghana to the IMF, the Hon Minister was instructive when he said that part of the dividends of entering into a fund relationship was to bring in more development assistance. It is precisely what we are approving today.
    Whatever it is, the Hon Minister was sincere in saying that consequent upon the IMF approval for fiscal consolidation, he expected that there would be more developmental assistance. I am aware that the Hon Minister has had to travel to Berlin, Germany to tidy this up.
    Mr Speaker, I am only making one point while I refer to page 2 of your Committee's Report. I thought that my Hon Colleague should have schooled my young Colleague, by name Hon Afenyo-Markin, when he said that Government was borrowing too much. Indeed, this is a concessionary facility, just like the earlier one which was taken. To the extent that --
    Mr Speaker, I am quoting page 2 12:15 p.m.
    “As at the end of financial year 2012, the Federal Republic of Germany had disbursed a total of €80 million to the MDBS Programme since joining in 2003.”
    So, if he goes back to the record, he will know that this €80 million was not just granted us in bulk, we took bit and pieces of it, which accumulated to €80 million, including what is €17 million now. What is being done today, we do not behave as if yesterday, we did not do same; we did.
    I will further quote you, Mr Speaker. On page 3 -- [Interruption] Yes. When I said yesterday, I mean that we have committed to a framework agreement and I am sharing the history. Mr Speaker, page 3, paragraph 4 states:
    “The implementation of the programme will be in line with the Framework Memorandum (FM) on the MDBS dated May 19, 2008 or any succeeding document.”
    So, consequent upon this framework, Government is borrowing about €17 million and all of a sudden, that has become a bad economic management decision; it cannot be. We are certainly respecting the protocols to which we committed sometime in the distant past and I think that it is only fair that we support this approval.
    Mr First Deputy Speaker 12:15 p.m.
    Hon Ranking Member, I gave the opportunity to the Hon Deputy Minority Leader first. So, you will have your turn --
    Mr Nitiwul 12:15 p.m.
    Mr Speaker, I just thought he wanted to make an intervention in relation to what he said.
    Dr A. A. Osei 12:15 p.m.
    Mr Speaker, I just wanted to remind him that the framework agreement presupposes that we will meet the obligations signed by us, but the understanding was that, we would not renege on our promises. But because we reneged, we did not get the money in 2013 and 2014. When we sign, we would have to do the right thing.
    Mr Dominic B. A. Nitiwul (NPP -- Bimbilla) 12:15 p.m.
    Mr Speaker, I would want to comment briefly on the Committee's Report and say that the Multi-Donor Budget Support Programme made up of about 10 development partners and Ghana has been ongoing and they will keep going.
    Mr Dominic B. A. Nitiwul (NPP -- Bimbilla) 12:15 p.m.
    Mr Speaker, like the Hon Member stated, we must also do our part. When we are given concessionary loans, we must do our part to stay as clean as possible, so that we do not miss out as it has been reported by the Committee.
    Mr Speaker, the conclusion clearly tells us -- even the expected outcomes tell us -- It is important to state that this support is not tied to any project. So, when they are programmed in the budget, it is for the Government of the day to be able to say this is what we would want to use it for. That is clearly how it is.
    Mr Speaker, then it comes to my real concern. Last week, the Bank of Ghana said our debt profile had risen to GH¢89 billion as of June. From July till date, if we check today's Order Paper, it is full of loans.
    Mr Speaker, if we are not careful, by the time we leave on Friday, we would have crossed the GH¢100 billion mark. That is frightening, Mr Speaker.
    People are very concerned about the amount of debts that we are piling onto this country. Many of them are concessionary loans -- loans that we would be paying in 20, 30 or 40 years' time when most of my Hon Colleagues sitting here, including us, will not be Members of Parliament.

    We should be concerned. That is why the usage -- [Interruption] That is why the usage of these resources are of utmost importance; we should use them to the benefit of the people, so that the economy will be growing.

    If our economy that used to grow at 8 per cent, 7.3 per cent or 7.5 per cent as far back as 2008 and 2009, is struggling today to grow at 4 per cent -- Meanwhile, we have piled these loans. What is it that we are really using these monies for? Are we doing the right thing? Obviously not.
    Mr First Deputy Speaker 12:15 p.m.
    Hon Majority Chief Whip, are you up on a point of order?
    Alhaji Mohammed-Mubarak Muntaka 12:15 p.m.
    Rightly so, Mr Speaker.
    Mr Speaker, my Hon Colleague is grossly misleading all of us.
    The Hon Deputy Minority Leader is a very strong member of the Finance Committee and he knows that every single loan we have contracted had to pass through the Finance Committee, of which he is a member. He is now standing on the floor of the House and asking the plenary what we have been using these loans for.
    Mr Speaker, every single loan comes with the description of what it is going to be used for. He is a member of that Committee, yet he is asking us what the loans are used for. He wants us to now tabulate all that he has suggested to this plenary to approve for, what those loans have been used for?
    Mr Speaker, he should restrict himself and speak to the issue. If he has some concerns, legitimately, he can raise them but to ask the question, all those loans,
    what have they been used for -- we should rather be asking him because he is a member of the Finance Committee.
    Mr Nitiwul 12:15 p.m.
    Mr Speaker, this man is talking like somebody who has not even passed through the economic club before.
    Mr First Deputy Speaker 12:15 p.m.
    Hon Member, “this Hon Member” is talking as if --
    Mr Nitiwul 12:15 p.m.
    Mr Speaker, I will forgive him. The loan profile of GH¢89 billion, all did not pass through this House.
    Mr First Deputy Speaker 12:15 p.m.
    Early on, you referred to him as “this man” and “I am correcting you.
    Mr Nitiwul 12:15 p.m.
    Mr Speaker, the Hon Member, Alhaji Muntaka, Hon Member for Asawase, my good Friend and my Colleague on the Pan African Parliament --
    Mr Speaker, close to 50 per cent to 60 per cent of the GH¢89 billion that we owe, is debt that has been contracted without passing through this House, because they are domestic loans -- [Interruption] We do not approve them in this House and they are not project specific.
    rose
    Mr First Deputy Speaker 12:15 p.m.
    Hon Members, please, resume your seats.
    Let us find out from the Chairman of the Finance Committee whether the statement made by the Hon Deputy Minority Leader is correct.
    Mr Avedzi 12:25 p.m.
    Mr Speaker, the Hon Deputy Minority Leader is misleading the House.
    Mr Speaker, we approve budgets and Appropriation Bills in this House, which give the power to the Hon Minister for Finance to go to the domestic market and borrow to support the budget. We do that all the time.
    If he is saying that about 60 per cent of the GH¢89 billion are loans that did not pass through this House, he is misleading the House. I expect him as a member of the Finance Committee to know that and to tell the whole world about this. This is not true. He is misleading the House.
    Mr First Deputy Speaker 12:25 p.m.
    Yes, Hon Ignatius Baffour Awuah -- [Interruption.]
    Order! Order!
    Mr Awuah 12:25 p.m.
    Mr Speaker, Hon Alhaji Muntaka's intervention was that, as an Hon Member of the Finance Committee, the Hon Member should be aware of the usage of every single loan that we contract as a House. That was the point he made.
    But the point Hon Nitiwul, the Hon Deputy Minority Leader seeks to make is that, yes, we may have approved the loans but it is not true that for every loan that we approve here, we know its exact usage. This is because -- [Interruptions] -- Mr Speaker, the point is that, all the domestic loans that we contract are approved as part of the budget but they are not tied to specific projects. So, it is not true that for every loan that we approve here, we should know its exact usage. It is never true.
    Mr First Deputy Speaker 12:25 p.m.
    Hon Minister for Finance?
    Order!
    Mr Terkper 12:25 p.m.
    Mr Speaker, I wish to draw the attention of Hon Members to the fact that, when we present the budget, we show our domestic revenues, grants and expenditures. And the expenditures are split into recurrent and capital. Each Ministry, representing their departments and agencies, present information on that capital budget to the respective committees and they are approved in the estimates.
    Therefore, the financing is for the shortfall of the revenue which we generate and which the donors give to us.
    Mr Nitiwul 12:25 p.m.
    Mr Speaker, all loans that are approved by this House pass through the Appropriation Act or by Government, both domestic and foreign. They pass through the Act. So, it is approved in the form of the Act. But even when we have the foreign, they would bring back the loan to this House for us to approve.
    We know the terms; we know the usage and we know everything. So, Parliament can monitor. Ask him whether he reports to this House on daily or weekly basis - - [Interruption]--
    rose
    Mr First Deputy Speaker 12:25 p.m.
    Hon Majority Leader, is it on point of order?
    Mr Bagbin 12:25 p.m.
    On a point of Order.
    Mr Speaker, my Hon Colleague, the Hon Deputy Minority Leader has worked himself up and he is now saying things that are not true.
    The loans do not pass through the Appropriation Act; they are captured in the Appropriation Act. After we approve them, they are captured in the Appropriation Act but they do not pass through the Appropriation Act.
    He has worked himself up and now, he is saying things -- I do not know.
    Mr First Deputy Speaker 12:25 p.m.
    Very well.
    Hon Deputy Minority Leader, they do not pass, they are captured.
    Mr Nitiwul 12:25 p.m.
    Mr Speaker, I thought he was going to argue the content but if it is about semantics, I understand.
    Mr Speaker, they are captured as part of the Appropriation Act. I hope that it is alright.
    Mr Speaker, the point I am making is that, both the domestic and the foreign debts are captured as part of the Appropriation Act but this House still approves all external loans that we take as part of the constitutional provision. And so, we monitor them, we know what it is used for but with the domestic, we do not.
    Mr First Deputy Speaker 12:25 p.m.
    Hon Member, I think this point was made earlier and the Hon Minister for Finance has responded to it. Why do we not make some progress?
    Mr Nitiwul 12:25 p.m.
    But that is why I am responding to what he said. And so, if the Hon Minister wants this House to be held responsible for the - Find out exactly what they are used for, and tell people on the spot, he should report to this House.
    When he goes to do treasury bills, he should come and report to this House.
    Mr First Deputy Speaker 12:25 p.m.
    On a point of Order, Hon Majority Leader?
    Mr Bagbin 12:25 p.m.
    Mr Speaker, we would not allow this to go on the record of this House. This is because we have the oversight function and we have committees. The committees are to scrutinise the various sectors.
    Mr Speaker, this House approves money for each committee; the committees submit their proposals through Leadership to Mr Speaker and we approve moneys that are disbursed to them for oversight functions. [Interruption]--
    Mr Speaker, it is not a matter of shouting. The Hon Chairmen and Hon Ranking Members are here. They submit those things and we process them and allocate moneys for those oversight activities. We are being told that that is not done? That is an indictment on Hon Members. Mr Speaker, I know that Hon Members have been doing that. They have been scrutinising sectors; they have been scrutinising expenditures and they have been reporting to this House.
    It should not be said that we do not do our oversight responsibility. How effective that is, we have a constitutional provision.
    As a country, this has been recognised and in the proposed constitutional reforms, we are going to deal with it. As a country, it should not be said that it is not done at all.
    Mr First Deputy Speaker 12:25 p.m.
    Hon Members, we could go on and on. I think the point has been made. Our attention has been drawn to the fact that we have oversight responsibilities and by way of checks and balances, it is a way of checking that the right thing is done by the Executive. Once we are aware of this, if we think that role is not being properly played, we, as Members of Parliament, should know what we should do to ensure strict compliance with our oversight responsibilities.
    Yes, Hon Ranking Member?
    Dr A. A. Osei 12:25 p.m.
    Mr Speaker, I just would want to plead with the Hon Majority Leader that on this matter of oversight, let us discuss it at different forums, so that -- [Interruption] -- I would plead with him, that let us flag it and deal with it later.
    Mr Nitiwul 12:25 p.m.
    It does not work.
    Mr First Deputy Speaker 12:25 p.m.
    Yes, Hon Deputy Minority Leader, could you wind up?
    Mr Nitiwul 12:25 p.m.
    I would conclude, Mr Speaker. But I am just saying that the advice given by the Hon Ranking Member is apt. This is because he knows that even with the Finance Committee, the Bank of Ghana is over there, there are bank receipts that we are supposed to check. On the foreign exchange receipts, ask him whether we have ever done that with the Bank of Ghana; but I would leave it like that.
    Mr Speaker, even the committees, do they even have the resources to work? It is so; but it is a common knowledge --
    Mr First Deputy Speaker 12:25 p.m.
    Hon Deputy Minority Leader, I am a bit surprised. You belong to the Leadership. --[Uproar.]
    Please, Order! Order!
    Hon Deputy Minority Leader, you belong to the Leadership. And so, these are issues that at your level, you should be able to sort out rather than raise them on the floor of the House.
    Hon Members, in that case, I will put the Question.
    Question put and Motion agreed to.
    Mr Bagbin 12:25 p.m.
    Mr Speaker, if we may now take item 18.
    Mr First Deputy Speaker 12:25 p.m.
    Very well. Item 18 by the Hon Minister for
    Finance.
    RESOLUTIONS 12:25 p.m.
    Minister for Finance (Mr Seth E. Terpker) 12:25 p.m.
    Mr Speaker, I beg to move, that
    WHEREAS by the provisions of article 181 of the Constitution and sections 3 and 7 of the Loans Act, 1970 (Act 335), the terms and conditions of any loan raised by the Government of the Republic of Ghana on behalf of itself or any public institution or authority shall not come into operation unless the said terms and conditions have been laid before Parliament and approved by a Resolution of Parliament;
    PURSUANT to the provisions of the said article 181 of the Constitution and sections 3 and 7 of the Loans Act, 1970 (Act 335), at the request of the Government of the Republic Ghana acting through the Minister responsible for Finance, there has been laid before Parliament the terms and conditions of a Loan Agreement between the Govern- ment of the Republic of Ghana and Kreditanstalt fur Wiederaufbau (KfW), Frankfurt am Main for an amount of seventeen million, three hundred and ten thousand euros (€17,310,000) to co-finance Multi- Donor Budget Support (MDBS) Programme.
    THIS HONOURABLE HOUSE 12:25 p.m.
    Chairman of the Committee (Mr James K. Avedzi) 12:25 p.m.
    Mr Speaker, I beg to second the Motion.
    Question put and Motion agreed to.
    Resolved accordingly.
    Mr First Deputy Speaker 12:25 p.m.
    Yes, Hon Majority Leader?
    Mr Bagbin 12:35 p.m.
    Mr Speaker, we have an Addendum to the Order Paper where the Hon -- [Interruption] -- I was just querying the Clerks-at-the-Table why they always wait until the item is mentioned before they get up to distribute it. It is not the best. The items should have been distributed immediately they were available.
    Mr Speaker, I think that it is time for the Hon Minister for Finance to move the Motion to present the Supplementary Estimates for the 2015 financial year. Now, Hon Members have been given copies of the Order Paper Addendum and we could invite the Hon Minister for Finance to present the Statement.
    Mr First Deputy Speaker 12:35 p.m.
    Hon Members, Mr Speaker indicated that he would come back and take this item, so, I will direct that Sitting be suspended for just two minutes, so that he takes over the Chair.
    12.37 p.m. -- Sitting suspended.
    12.39 p.m. - Sitting resumed.
    MR SPEAKER
    Mr Speaker 12:35 p.m.
    Hon Majority Leader?
    Mr Bagbin 12:35 p.m.
    Mr Speaker, I would like to propose that we just lay the Papers on item number 5 before moving to the Motion on the Supplementary Estimates.
    Mr Speaker 12:35 p.m.
    Very well.
    Hon Members, Presentation of Papers, item number 5.
    Dr A. A. Osei 12:35 p.m.
    I do not know why this matter has come up. This House has taken a decision on item number 5 (a) --
    Mr Speaker 12:35 p.m.
    Hon Member for Old Tafo, this is only laying of Papers. When the Paper is laid, it will be referred to the appropriate committee and when the Committee is reporting --
    Dr A. A. Osei 12:35 p.m.
    Mr Speaker, before it is laid, I would like to bring a matter to your attention for your guidance. We have taken a decision to approve a US$1 billion eurobond financing. This first Paper seeks to raise US$1.5 billion, which means that our earlier decision would have to be rescinded but we have not done so.
    Mr Speaker 12:35 p.m.
    Hon Member, it is not as simple as that. Hon Members, Presen- tation of Paper, 5 (a) (i), by the Minister for Finance.
    PAPERS 12:35 p.m.
    Mr Osei Kyei-Mensah-Bonsu 12:35 p.m.
    Mr Speaker, I thought the issue that was raised by my Hon Colleague was of considerable import. The reason is that a decision has been taken by this House in respect of this facility. Now there is a new one --
    Mr Speaker 12:35 p.m.
    Hon Minority Leader, I know where you are coming from but the point is that we are not taking a decision now, to begin with. We are only laying a Paper. So, when the time comes and a certain decision is to be taken, then Hon Members could raise the issue. At this stage, we are only laying a Paper; no Motion is being moved and no decision is being taken by the House at this stage.
    Secondly, the issue of recision is a matter for the Session within which that decision was taken. Was it taken within this Session? There are a number of issues that would be raised. So, if the Committee wants to include that issue in their Report, then the House will debate it and take a decision on the matter.
    Hon Members, let us have the Papers laid; let the Committee go and look at it and when the time comes for the debate, the House could take a decision.
    By the Minister for Finance --
    (ii) Multi-Party Deed among the Government of the Republic of Ghana, Ghana National Petro- leum Corporation, the Bank of Ghana, ENI Ghana Exploration and Production Limited and Vitol Upstream Ghana Limited in support of the Development of the Sankofa and Gye Nyame Oil

    and Gas Project in respect of the Offshore Cape Three Points Petroleum Agreement (OCTP-

    PA).

    (iii) Deed of Sovereign Guarantee between the Government of the Republic of Ghana (as Guarantor), ENI Ghana Exploration and Production Limited and Vitol Upstream Ghana Limited (as Contractors) in support of the development of the Sankofa and Gye Nyame Oil and Gas Project in respect of the Offshore Cape Three Points Petroleum Agree- ment (OCTP PA).

    Referred to the joint Committee of Finance and Mines and Energy.
    Mr Speaker 12:45 p.m.
    Item 5 (b), by the Hon Chairman of the Committee.
    Hon Chairman of the Committee, are those Reports ready?
    Mr Avedzi 12:45 p.m.
    Mr Speaker, 5 (b) (i) is ready.
    Mr Speaker 12:45 p.m.
    Very well.
    By the Chairman of the Committee --
    (i) Report of the Finance Committee on the Financing Agreement between the Government of the Republic of Ghana and the International Development Association (IDA) for an amount equivalent to thirty-two million, seven hundred thousand Special Drawing Rights (SDR32,700,000 [equivalent to US$45 million]) to support the Public Financial Management Reform Project.
    Mr Speaker 12:45 p.m.
    Yes, Hon Majority Leader?
    Mr Bagbin 12:45 p.m.
    Mr Speaker, I have just been told that item 5 (c) (i) is ready but the (ii) is not yet ready. So, during the course of the day, if it is ready, we will lay it. But we can now lay item 5 (c) (i) --
    Mr Speaker 12:45 p.m.
    Let us defer it.
    Mr Bagbin 12:45 p.m.
    Mr Speaker, an Hon Member of the Committee is available to lay the Paper.
    Mr Speaker 12:45 p.m.
    Hon Majority Leader, I will wish that this Paper be laid by the Hon Chairman of the Committee.
    Mr Bagbin 12:45 p.m.
    Mr Speaker, is it your pleasure that the Hon Chairman of the Committee should lay the Paper?
    Mr Speaker 12:45 p.m.
    Yes.
    Mr Bagbin 12:45 p.m.
    Mr Speaker, I am guided by that -- [Pause.]
    Mr Speaker 12:45 p.m.
    Hon Majority Leader, what item are we taking?
    Mr Bagbin 12:45 p.m.
    Mr Speaker, with your kind permission, we now move to the Adden- dum. My information is that all Hon Members have now been given copies and you may kindly invite the Hon Minister for Finance to move the Motion.
    Mr Speaker 12:45 p.m.
    Hon Members, we have the Order Paper Addendum.
    MOTIONS 12:45 p.m.
    Minister for Finance (Mr Seth E. Terkper) 12:45 p.m.
    Mr Speaker, I beg to move, that this Honourable House approves the sum of GH¢865,789,380.00 as supplementary estimates for the 2015 financial year.
    Mr Speaker, in so doing, I wish to bring Hon Members of this august House abreast of development in the economy in a review, which I am going to present.
    It also provides a background for the supplementary estimates, which we are presenting to the House.
    Section One: Introduction
    Mr Speaker, on the authority of His Excellency, President John Dramani Mahama, and in accordance with article 179 (8) of the 1992 Constitution, I stand before this august House, to present a mid-year review and revised macro- economic targets as well as seek approval for supplementary estimates for the 2015 fiscal year. These revised estimates have been necessitated by domestic and long- standing global developments.
    Mr Speaker, before I proceed, on behalf of His Excellency, President John Dramani Mahama, I wish to express our profound appreciation to this august House for your co-operation and support in the management of the economy.
    Mr. Speaker, the aim of this year's mid- year review and supplementary estimates is to:
    update Hon Members on the performance of the economy in 2014 and for the first five months of 2015;
    revise the macroeconomic targets for 2015;
    revise our budget estimates based on current information;
    request for approval of supplemen- tary estimates for 2015; and
    provide an update of major Govern- ment initiatives.
    Mr. Speaker, on Thursday, 12th March, 2015, I came to this House to provide information and apprise the people of Ghana on the implications of the decline in crude oil prices and its impact on the 2015 Budget.
    In that Statement, I also outlined steps Government had taken and others it planned to take to address the expected shortfall in revenue, to ensure that the macroeconomic objectives of Government were achieved.
    Mr. Speaker, our fiscal consolidation programme, as at the end of May, 2015, remained on course. These are the result of relatively good tax and non-tax revenue performance as well as containment of the overruns on subsidies, the wage bill and other spending.
    Furthermore, Mr Speaker, the provi- sional GDP numbers released by the Ghana Statistical Service indicates that the economy grew by 4.7 per cent in the first quarter of 2015, compared with a lower growth of 3.8 per cent in the first quarter of 2014 and 4.0 per cent at the end of last year. Despite the net adverse impact of the fall in crude oil prices, the upward trend seems obvious.
    Mr Speaker, I am glad to note that our decision to enter into the IMF Programme for Balance of Payments support to build on the progress in the implementation of Government's Home Grown Policies is beginning to yield dividends. None- theless, we will not be complacent at this stage.
    It will be recalled that following the successful conclusion of negotiations on April 4, 2015, the Board of Directors of the IMF approved a three-year Extended Credit Facility (ECF) Programme for Ghana based on concrete prior actions we were able to meet. The overall purpose of the programme is to achieve fiscal consolida- tion for sustained micro-economic stability as prelude to a robust and anticipated growth of the economy.
    Minister for Finance (Mr Seth E. Terkper) 12:45 p.m.
    remaining 25 per cent will continue to be deposited into the Ghana Stabilisation Fund.
    Mr Speaker, with the downward revision of the expected oil revenue for 2015, resulting from the drastic decline in world oil prices, we propose to reduce the cap on the GSF to US$150 million for the rest of 2015.
    I am pleased to also inform you that with the recent amendments to the Petroleum Revenue Management Law and the passage of the Ghana Infrastructure Fund Law, progress is being made to fully operationalise the Ghana Infrastructure Investment Fund for the purposes of infrastructure development. Mr Speaker, we propose a mid-term policy update to amend the Ghana Infrastructure Fund (GIF) Act to gradually establish a guaranteed fund for the country as other countries such as Malaysia have done.
    In addition, the Petroleum Price Liberalisation policy has been approved by Cabinet to overhaul the pricing of petroleum products. Implementation of the policy has started and we expect that the full implementation of the deregulation of the petroleum downstream sector would promote competition among market players.
    The issue of subsidies and foreign exchange loses which put a huge financial burden on Government and contributed to the misalignment of budget expenditure items will also end. This will result in the re-channelling of finances into other sectors of the economy including our social intervention programmes.
    Mr Speaker, a couple of weeks ago, Ghana went through one of the most unfortunate, tragic and difficult periods in the country's history. The sad twin disaster of flooding and fire that occurred on June 3rd led to the death of over one
    hundred and fifty Ghanaians and thousands more displaced and vulnerable.
    There is currently a major ongoing effort to mobilise and supply basic human needs like water, food, clothing, beddings, shelter and health care to the displaced. However, this tragic and unfortunate disaster was also a stark reminder of the very poor state in which some of our compatriots live and the urgent need to provide minimum Social Protection (SP) benefits to the thousands.
    Recall His Excellency's visit to the Nsawam Prisons as part of the Efiase Project. As he observed, it is another area of supreme humanitarian need that requires Government's action. Every effort is being made by relevant MDAs to reprioritise expenditures to complement the promise of GH¢50 million assistance to enable us respond to these needs appropriately.
    Plans are also being put in place, including the alignment of IGFs and statutory funds, to mitigate the risk of similar future disasters.
    Mr Speaker, further on the initiatives, the expenditure rationalisation measures I outlined in my Statement to this august House, mostly under the Ghana Integrated Financial Management Information System (GIFMIS) initiative, included containing the wage bill, realigning expenditures to statutory funds, installation of the Human Resource Management Information System (HRMIS) to facilitate management and reconciliation with the mechanised payroll and establishment schedules, electronic payments, MDAs/MMDAs account monitoring and commitment control.
    I am happy to inform the House that good progress is being made on all the above mentioned initiatives and will be enhanced with the approval of a US$45 million PFM Reform Facility. We look forward to the House approving the loan.
    Mr Speaker, we are presenting this mid- year review and supplementary estimates to continue pursuing our transformation agenda; maintain the recent gains in our growth and macroeconomic stability agenda; and entrench our lower middle income status.
    The short-term and more structural elements are designed to manage issues such as higher foreign-financed capital expenditure due to the exchange rate effects -- rising inflation, impact of gold and cocoa prices, revisions in the benchmark crude oil prices used in the PRMA, additional spending related to the recent flooding and refinancing of existing debt stock.
    Mr Speaker, let me use this opportunity to remind MDAs and MMDAs that this revision and supplementary estimates will not result in automatic increases in expenditure across board. Further, they do not accommodate significant new expenditures that must be justified in budget context. Our prudent expenditure drive continues with additional expenditure allowed only when revenues increase.
    On the other hand, we are confident that as the economy rebounds, the expenditure envelope will increase in tandem with revenue. In the interim, focus will be on pipeline projects and MDA/ MMDAs are not to incur unauthorized expenditures beyond their budgets and budget allotments.
    Mr Speaker, against this background, I have come to this House to request for supplementary estimates of GH¢865, 789,380.00 in accordance with article 179 (8) of the 1992 Constitution and Standing Order 143 of this House.

    Section Two: Macroeconomic Performance in 2014

    Macroeconomic targets for 2014

    Mr Speaker, at the time of presenting the 2015 Budget, we did not have full year macroeconomic performance information for 2014. Consequently, we apprised this august House of macroeconomic performance for the first three quarters of 2014 and the projected outturn for the year. We wish to inform the House that we now have the full complement of information on the macroeconomic performance in

    2014.

    Mr Speaker, let me take this opportunity to inform this House that for the very first time, a budget performance report has been produced by the Ministry of Finance. The report covers the period January to December, 2014. It has been published and it is available on the Ministry's website -- www.mofep.gov.gh.

    Mr Speaker, please, permit me to restate the 2014 macroeconomic targets which were as follows:

    Overall real GDP (including oil) growth of 7.1 per cent.

    Non-oil real GDP growth of 6.6 per cent.

    End-year inflation target of 13.0±2 per cent.

    Overall budget deficit of 8.8 per cent.

    Gross International Reserves of not less than 3 months of import cover of goods and services.

    GDP Growth Mr Speaker, the Ghana Statistical

    Service (GSS) has revised the Gross Domestic Product (GDP) methodology slightly. The change in methodology has
    Mr Speaker, revenue measures in the 2014 Budget included the following 12:45 p.m.
    Increase in the VAT rate by 2.5 per cent and a broadening of the VAT base to cover fee-based financial services and real estate.
    A change in petroleum excise tax from specific to ad valorem in line with other excise regimes.
    Increase in withholding tax on rent on commercial properties from eight(8) to 15 percent.
    Increase in the withholding tax on management and technical services fees from 15 to 20 per cent.
    Increase in corporate income tax rate of free zones companies selling on the local market from 8 to 25 per cent.
    More effective application of the communication service tax.
    Strengthening of the GRA head- quarters.
    Segmentation of the tax offices into small, medium and large taxpayers.
    integration of VAT and Income Tax Offices (alongside segmentation and automation).
    Mr Speaker, expenditure measures in the 2014 Budget included 12:45 p.m.
    continued deployment of financial, accounting and budgeting modules under the GIFMIS initiative;
    continuation of the policy of regular adjustment of utility and petroleum prices;
    intensified consultation on public sector wages in 2014 through the public sector wage negotiation process (in line with the Ho Forum);
    continuation of the policy of net freeze on employment in the public service (excluding education and health sector);
    payroll and human resource management measures such as frequent payroll audits and the use of Electronic Salary Payment Voucher (E-SPV) to reduce the incidence of “ghost” workers on government payroll; and
    continuation of the limit on the award of new contracts and new loans with continuing emphasis on the completion of pipeline projects.
    Mr Speaker, the implementation of these revenue and expenditure measures, which is showing improvements in the efficiency of both revenue administration and public spending was expected to result in an increase in tax revenue from 15.3 per cent of GDP in 2013 to 17.0 per cent in 2014.
    On the other hand, total expenditure including the clearance of arrears was expected to rise from 31.0 per cent of GDP in 2013 to a modest 32.0 per cent in 2014.
    Mr Speaker, despite the overall positive performance in 2014, the economy faced some macroeconomic challenges such as a sharp depreciation of the cedi, rising interest rates, high inflation and a slowdown in economic activity resulting mainly from falling commodity prices, EBOLA knock-on effect and energy supply shortages. These, coupled with delays in the implementation of some of the revenue and expenditure measures outlined above, affected the fiscal performance during the first few months of the year.
    This necessitated a review of the revenue and expenditure estimates in the 2014 Budget and resulted in a revision of the fiscal deficit target from 8.5 per cent of GDP to 8.8 per cent.
    Provisional fiscal data for the 2014 fiscal year indicates that, both revenue and expenditure were below their respective targets for the period. However, with the shortfall in revenue exceeding that of expenditure, the resulting cash fiscal deficit was equivalent to 10.2 per cent of GDP against the revised target of 8.8 per cent.
    Revenue
    Mr Speaker, total revenue and grants for the period amounted to GH¢24,745.5 million (21.8 per cent of GDP), against a target of GH¢26,230.3 million (22.9 per cent of GDP). The shortfall in total revenue and grants for the period was as a result of lower than anticipated domestic revenue collections and low disbursement of grants, mainly budget support from development partners. In nominal terms, the provisional outturn was 27.1 per cent higher than the outturn for the same period in 2013.
    Total tax revenue amounted to GH¢19,229.8 million (17.0 per cent of GDP), 2.8 per cent lower than the revised budget target of GH¢19,788.6 million (17.2 per cent of GDP). The shortfall in tax revenue compared to the target was partly on account of the slowdown in economic growth resulting from the energy challenges as well as lower import volumes. This led to lower than estimated corporate income taxes and import duties.
    In nominal terms, tax revenue was 34.4 per cent higher than the outturn recorded for the same period in 2013. The sturdy year-on-year growth in tax revenue was mainly the result of the strong growth in oil tax revenue and VAT by 78.3 per cent and 40.8 per cent, respectively. Of the total tax revenue, oil tax revenue for the period was GH¢1,350.7 million, 25.5 per cent higher than the revised budget target of GH¢1,076.2 million.
    Disbursement of grants from develop- ment partners was 41.5 per cent lower than the budget target of GH¢1,390.8 million and 10.1 per cent higher than the outturn for the same period in 2013. The lower than expected outturn of grants was mainly due to the slow disbursement of programme grants from our Multi Donor Budget Support partners.
    Expenditure
    Mr Speaker, total expenditure, including payments for clearance of arrears and outstanding commitments amounted to GH¢36,296.1 million (32.0 per cent of GDP), against a target of GH¢36,358.3 million (31.7 per cent of GDP). The outturn was 0.2 per cent lower than the budget target and 25.5 per cent higher than the outturn for 2013.
    The lower than estimated expenditure for the period was mainly as a result of lower than estimated interest costs, delays
    Mr Speaker, expenditure measures outlined in the budget include 12:45 p.m.
    salary adjustment for public sector workers within budgetary limits;
    strict implementation of tariff and price adjustment mechanisms to ensure the elimination of subsidies on utilities and petroleum products; and
    continuation of the net freeze on employment in all sectors of the public service (excluding education and health).

    To support the fiscal adjustment effort, various structural reforms are also being undertaken in the following areas:

    Revenue administration and tax policy.

    Public financial management.

    Public service reform.

    Debt management.

    Mr Speaker, preliminary fiscal data for January to May 2015 indicate an over performance in revenue and grants while expenditures were below target for the period. This resulted in a cash fiscal deficit equivalent to 1.9 per cent of GDP, against a target of 3.4 per cent. This compares to a deficit equivalent 3.7 per cent of GDP for the same period in 2014 as indicated in table 1:

    SPACE FOR Table 1: PAGE 24 (110-135)

    Revenue

    Mr Speaker, total revenue and grants for the period was GH¢12,065.3 million, equivalent to 9.0 per cent of GDP, against a target of GH¢11,430.9 million, equivalent to 8.5 per cent of GDP. In nominal terms, the provisional outturn was 28.1 per cent higher than the outturn for the same period in 2014. The over performance in

    total revenue and grants was mainly due to a strong growth in domestic revenue driven mainly by good tax revenue performance, the receipt of additional dividends.

    The summary of government revenue and grants from January to May 2015 is presented in Table 2:
    Mr Speaker, expenditure measures outlined in the budget include 12:45 p.m.
    Space Table 4: PAGE 27 - (110-135)

    Developments in public debt

    Mr Speaker, the provisional debt stock as at end of May, 2015 stood at GH¢90,042.58 million, representing 67.53 per cent of GDP.This was made up of GH¢53,844.83 million and GH¢36,197.75 million for external and domestic debt, respectively.In US dollar terms, the provisional debt stock stood at US$22,512.90 million made up of US$13,462.55 million and US$9,050.34 million for external and domestic debt, respectively.

    Mr Speaker, it must, however, be noted that the growth in public debt as at the end of May, 2015 is largely on account of the significant risk of exchange volatility which affected more than 50 per cent of the entire public debt stock. The expectation is that, the significant recovery of the cedi against the major trading currencies will fundamentally reduce the ratio of public debt to GDP.

    Section Four: Status of Implementation of Key Policy Initiatives and Other Mid- term Initiatives

    Mr Speaker, during the presentation of the 2015 Budget Statement and Economic Policy of Government to this august House in November, 2014, a number of

    policy initiatives were outlined to enable government deliver on its transformation agenda.

    The initiatives included both existing and new ones and covered the strategic areas of Power, Tax Policy, Structural Measures, Debt Management, Export-led Development, Community Day Senior High Schools (SHS) and Progressively Free SHS.

    Mr Speaker, I would like to present an update on the implementation of these initiatives.

    Energy Initiatives

    Petroleum Sector

    Mr Speaker, the work on the Western Corridor Gas Infrastructure Project is completed. However, some ancillary works are still ongoing. This will improve power output and enhance prospects for power exports. The Atuabo Gas Processing Plant is currently delivering around 80mmscf of gas/day for thermal plants at Aboadze as well as evacuation of 400 metric tonnes of LPG a day to the domestic market.

    Production of oil from the Jubilee field from January to May was 16,686,419 barrels with daily average of 110,298.8 bbls.

    The Tweneboa-Enyenra-Ntomme (TEN) Development is at 57 per cent completion. The project is on course to meet deadline. Gas Sales Agreement and Amendment to Heads of Agreement between ENI and Partners for OCTP has been signed. The project is on course for gas production in 2018.

    Under the Rural LPG Project, 6,500 cylinders and cook stoves have been distributed in three districts.

    A Memorandum on Reverse Flow of Atuabo Gas in the West African Gas Pipeline system has been submitted to Cabinet for consideration.

    Power Sector

    The Current Power Supply Situation

    Mr Speaker, measures are being taken to address the power supply challenges currently facing the country. The main objective of Government is to bring an end to the ongoing challenges and to ensure that load- shedding does not recur. This is to be achieved through short-term and medium to long -term measures.

    In the short-term the Ministry of Power is taking steps to ensure that already existing plants that have been shut down are restored to commercial operation. Furthermore, the Ministry is facilitating the completion of the following projects before the end of the year:

    220MW Kpone Thermal Power Project (KTPP).

    110MW Tico Expansion Project.

    180MW first half of Asogli 360MW Phase 2 Project.

    VRA TT2PP (38 MW) expansion project.

    Other short term measures include the following emergency or fast-track power projects:

    225MW Powership ( Preparatory works in progress), which is an IPP project.

    250MW Ameri Project in Takoradi, which is a Build Own Operate and Transfer (B.O.O.T) arrangement with Government for 5 years after which the plant will be handed over to Government to run for the remaining 15 years of the plant's lifespan. Civil works have commenced under this project.

    370MW AKSA Project (Commercial Contract sent to Parliament), which is an Emergency Power Agreement (EPA) Project for 5 years with option to negotiate a further term with ECG.

    110MW TEI project (Commercial proposal submitted to Parliament), which is an Emergency Power Agreement (EPA) Project for 4 years with option to negotiate a further term with ECG.

    300MW GE Early Power Project (Commercial Agreement under review), which is also an Emergency Power Agreement (EPA) Project.

    Mr Speaker, in the short- term a total of about 1,800MW is expected to be added to the country's installed generation capacity.

    In the medium to long-term, Mr Speaker, the Ministry of Power is taking steps to add in excess of 3,000MW through the following:

    360MW Asogli Phase 2 Project (construction has commenced); 180MW expected in 2015; Second group of 180MW expected in 2016
    Mr Speaker 12:45 p.m.
    Hon Members, having regard to the state of business, I direct that Sitting be held outside the prescribed period.
    Hon Minister, please continue.
    Export-led Development Strategy
    Mr Speaker, the Ministry of Trade and Industry (MoTI) has facilitated and supported the Sea-freight Pineapple Exporters Association (SPEG) to diversify their product range by introducing the galia melon and cantalopes, which are high value short gestation crops, onto their existing farmlands.
    The Ministry also collaborated with Ghana Export Promotion Authority in revamping interest of local farmers in the Greater Accra and Volta Regions in the cultivation of Asian vegetables, as well as with Central Regional Development Commission rekindling the cultivation of the sugar loaf and smooth cayenne pineapple for export by farmers in the Central Region.
    Investment Incentives
    Mr Speaker, given the importance of changing orientation of government policies in support of exports, the GIPC will be required to put more emphasis on incentives for exporters. Together with the GEPA, government will encourage private sector institutions such as GUTA, GNCC and AGI to evolve programmes that will promote exports among their members.
    Enhancing domestic production to reduce imports
    Mr Speaker, the MoTI has developed a comprehensive strategic plan for made- in-Ghana products and also to undertake promotional campaign for made-in-Ghana goods and services.
    Revamping of the Broiler Programme
    Mr Speaker, the broiler revitalisation project to progressively reduce imports of chicken by 40 per cent by the end of 2016 is ongoing. Activities undertaken
    currently include the agreement with stakeholders (farmers, feed millers, importers, financial institutions et cetera) to cooperate along the value chain. The Ministry of Food and Agriculture is also promoting the processing and packaging of local chicken as well as regulating importation.
    Mr Speaker, it is expected that by the end of the year, these activities will lead to the production of 20 million broilers which will result in 60,000 mt of poultry meat. With this achievement, Ghana will save about US$132 million and reduce poultry importation by 38.9 per cent. This target, however, is threatened by the recent outbreak of avian influenza, also known as bird flu, which has already led to the destruction of over 33,143 birds resulting in the loss of millions of cedis. The Ministry of Food and Agriculture and other agencies are taking prompt steps to stem the spread of the disease in the country.
    Fish Production
    Mr Speaker, the Fisheries (Amendment) Regulation, (LI 2217) 2015, has been passed to give meaning to the Fisheries Amendment Act, Act 880, 2014. The two Fisheries Amendments are geared towards combating Illegal, Unreported and Unregulated (IUU) fishing by Ghanaian tuna vessels.
    The Amendment of the Fisheries Act 2002 (Act 625) and the passage of Regulation 2015, (LI 2217) therefore give effect to international conservation and right obligations that empower the Minister for Fisheries and Aquaculture to make regulations to control IUU activities.
    These two actions are major land marks to resolve EU issues and revamp the tuna industry towards increasing export earnings for Ghana.
    As at 30th June 2015, the fisheries sector recorded a total of 154,621mt of fish exports. The Ministry further collaborated with FAO and introduced new fish processing technologies to increase the export of smoked fish.
    Agricultural Infrastructure
    Mr Speaker, rehabilitation works have been completed on seven irrigation schemes and handed over to the respective communities. Work is currently ongoing at five other schemes. Forty-one irrigation schemes of 2,828.60 ha and 1,302 ha of flood recession are being constructed and developed respectively under the Northern Rural Growth Programme (NRGP).
    The Ghana Commercial Agricultural Project (GCAP) is developing a 69.8 kilometres gravity-based irrigation canal under PPP arrangements. This will irrigate 11,000 ha under gravity within the immediate command area, and a substantially larger area using pumped irrigation in the out-of-command area.
    Community Day and Progressively Free
    SHS 12:45 p.m.
    Mr Speaker, we are focused on making the transformation agenda a reality 12:45 p.m.
    We are focused on a fiscal consoli- dation effort with significant structural measures to stabilise the macro economy; enhance domestic revenue mobilisation; and change public financial management.
    We are focused on boosting power supply as the main element of establishing an industrial base, be it in agro-processing; downstream petrochemical; and other industries.
    We are focused on utilising our petroleum and other resources to
    set up funds for infrastructure development; and managing our debt and contingencies.
    We are focused on transforming our IGF and statutory fund programmes to set up improved social interven- tion programmes in support of inclusive growth.
    We are focused on leading the private sector to participate in an export-led strategy, through initiatives such as the Exim Bank and to gradually reduce our import dependency.
    In short, we have not just started planning; we are in implementation mode and we encourage all Ghanaians to join in the effort.
    Mr. Speaker, I beg to move, that this august House approves the 2015 Supplementary Estimates of GH¢865,789,380.00 in compliance with article 179 (8) of the Constitution and Standing Order 143 of this House.
    The Appropriation Bill covering these supplementary estimates will be submitted to this august House in accordance with article 179 (9) of the Constitution of the Republic of Ghana and Standing Order 144 of Parliament.
    Mr. Speaker, we are determined in our efforts through the transformation agenda to building a better Ghana for all. We trust that in this endeavour, we can count on the support of all.
    SPACE FOR APPENDIX I - 12:45 p.m.