REPORT OF WEDNESDAY 10/07/13 by Dario Galluccio
Ghana will sell 200 million cedis ($98 million) in two issues (the first next month and the second one in November) of seven-year bonds, the first time the West African nation is offering debt of the duration as it seeks to extend the yield curve on government debt. No dates for the sales, which will be open to foreign and domestic investors, were given.
Moreover three-year and five-year bonds, which are traded over-the-counter by banks, are also listed on the Ghana Stock Exchange for secondary trading. Ghana will sell 600 million cedis five-year bonds in September, according to the Bank of Ghana, following on three sales of three-year debt in the first half of the year: the country also plans to offer $1 billion in its second Eurobond sale this month, according to the Finance Ministry.
The Private Enterprise Federation, PEF, wants government to halt implementation of new tax hikes, because they would not help businesses: in fact the levies increase the cost of doing business and negatively affect the operations of businesses, as they reduce the amount of returns to finance business expansion and create jobs.
According to Aljhaji Inusah Fuseini, Minister of Lands and Natural Resources, the Mining industry in 2012 contributed 27 per cent of government revenue collected by the Domestic Tax Division of Ghana Revenue Authority. The mining sector has produced 4,313,190 ounces of gold, which is the highest ever in the history of the country, resulting in export revenues of more than 5.6 billion dollars.
Ghana’s non-traditional exports, NTE, earnings fell 2.43 per cent to $2.364 billion in 2012 compared with $2.423 billion in 2011. The main cause is the drop in the average price levels of some key product, as the cashew nuts, cocoa paste and canned tuna; to be precise the cashew nuts drop 16%, the cocoa paste 11% and the canned tuna 33%.
However Mr Gideon Quarcoo, Chief Executive Officer of the Ghana Exports Promotion Authority (GEPA) is still optimistic that despite the 2.43 percent decline in NTE earnings for 2012, the target for 2013 which is $3.3 billion is achievable; but Ghana needed to redouble her efforts.
To response to critics by the main opposition New Patriotic Party (NPP) , the Minister of Finance and Economic Planning, Mr. Seth Terkper, said Ghana’s economy is not in tatters. Mr Terkper said the stabilization levy introduced by the former Kufuor administration, during the global food crisis, is no different from what the current Mahama administration is doing. Moreover he told that the government is only making efforts to “re-align the budget” and added the refinancing a loan is not borrowing to pay interest.
The minister also denied claims that the government has introduced five new taxes to shore-up revenue due to the precarious nature of the country’s coffers.
Government would by the end of the first quarter of 2014, conclude a deal with the European Union (EU) on an interim Economic Partnership Agreement (EPA) to protect the country’s export products to the EU market. The EPA is a scheme to create a free trade area between the EU and the African, Caribbean and Pacific Group of States.
The Government through the Skills Development Fund (SDF) has approved GH¢22 million grants for skills development; this is to support the acquisition of new and innovative skills and technology by 78 small, medium and large scale industries, training and research institutions. Moreover it will also be used to acquire new and innovative technologies in informal and formal sectors of the economy, specifically in agriculture, textiles, science and technology and service sectors respectively.