AAPET will envelope two already-existing special initiatives being implemented by the Akufo-Addo administration; the Planting for Food and Jobs and One-District-One Factory.

[contextly_sidebar id=”pzHwekwARIgF32ycJUtzaHEnrtdpbCKL”]The Finance Minister, Ken Ofori Atta, delivering the budget statement in Parliament, explained that AAPET is envisioned “to modernize agriculture, improve production efficiency, achieve food security and increase profitability for our farmers.”

It is a three-pronged economic development programme that will accelerate investments in agriculture, strategic infrastructure and industrialization.

The government intends to “invest in the entire agriculture and agribusiness value chain to create new business and job opportunities in the sector,” Mr. Ofori Atta said.

“Government will also invest in infrastructure that supports the opening up of the major agricultural zones of the country, in energy and related infrastructure to accelerate the industrialization agenda of Government. Significant investments will be made in the road and rail sectors of the economy to facilitate trade and the movement of goods and people, he added.

AAPET has also made provision for a grant funding facility for agribusiness startups, with support from the National Entrepreneurship and Innovation Plan.

Infrastructure-wise, some 35 bridges and roads, will also be constructed over the next three years under this initiative. The government will also construct 99 steel bridges under this policy.

An already announced “major pension scheme for cocoa farmers” will also be launched under AAPET.

Boosting Planting for Food and Jobs

Planting for Food and Jobs, which is expected to to be rolled out in all 216 districts across the country, involves the supply of farm resources such seedlings to participating farmers, and its first phase targeted the creation of more than 750,000 jobs.

Mr. Ofori Atta noted that, investments under the Planting for Food and Jobs will be scaled up.

But the government wants AAPET to take numerous steps further, as duties on agriculture processing equipment are expected to be abolished along with support granted to agribusiness start-ups.

Minimizing the risk of agriculture financing will also be a target of the government, through agriculture financing and crop insurance schemes.

Funds from the Infrastructure for Poverty Eradication Programme (IPEP), could possibly be diverted to “increase the pace of agriculture mechanization,” according to the Finance Minister.

Support from One-District-One Factory

Given government’s anticipation of success, it also intends to develop modern storage facilities through the One-District-One Factory policy.

This is possibly in line with President Akufo-Addo’s April 2017 announcement that government will construct a warehouse in every district of the country to ensure the proper storage of surplus food produce from the flagship ‘Planting for Food and Job’ program, and prevent post-harvest losses.

Improving transport will not be left out, as the AAPET is expected to “open up key food basket zones through road construction and irrigation projects.”

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

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According to him, Government has already set-up a task force to develop a road-map for the establishment of the bank.

Mr. Ofori-Atta made the announcement during the presentation of the 2018 budget statement in parliament today, Wednesday, November 15, 2017.

Even though Mr. Ofori-Atta did not provide the exact date of the launch, he explained that the move is aimed at strengthening the financial sector of the economy to move ‘Ghana beyond aid.’

“A strong and efficient financial sector is fundamental to realizing Ghana Beyond Aid. This requires innovative and long term financing instruments to support economic development for higher productivity, jobs and inclusive growth.”

As part of efforts aimed at strengthening the financial sector, the Minister added that government will also streamline the Ghana Infrastructure Investment Fund (GIIF).

“We will restructure the Ghana Infrastructure Investment Fund (GIIF) with the capability to mobilize foreign private capital for critical infrastructure development using a private sector model,” adding that government will also “Enhance the capacity of the Ghana Exim Bank to support agriculture and industrialization for export”.

Mr. Ofori-Atta stated that, the financial sector of country remains heavily dominated by banks with the total banking sector assets to GDP ratio as at September 2017, hitting 50 percent.

“ This compares unfavourably with the total market capitalization of the Ghana Stock Exchange (GSE) to GDP ratio of 30 percent, as well as the total corporate debt to GDP ratio of 0.36 percent on the Ghana Fixed Income Market (GFIM), for the same period,” he said.

How different will the National Development Bank be?

Already, some minority MPs are questioning the need for the establishment of such a  bank, considering that the Agricultural Development Bank (Adb) and the National Investment Bank (NIB), which are also state-owned, were set up for similar purposes.

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This means income tax for minimum wage earners has essentially been abolished.

The government has long served notice of its intent to lessen taxation, and the relief being offered to workers on minimum wage is to ensure fairness in income tax administration.

The Government will review the income tax threshold by “pegging the tax-free threshold to the current minimum wage,” Finance Minister Ken Ofori Atta announced in Parliament as he delivered the budget statement.

The minimum wage currently stands at GHc9.68 cedis, up from GHc 8.80, after the most recent increase in July 2017, set to take effect in January 2018.

Relief for private universities

Tax relief has also been given to other section of society with private universities set to benefit from yet to be announced breaks.

“It is government’s intention to support the sector in order to position Ghana as the premier higher education hub of the sub-region and to attract critical foreign direct investment into the sector,” Mr. Ofori Atta said.

The reliefs may, however appear to be contingent on the eventual use of the profits, according to the Finance Minister’s choice of words.

“For the long-term development of a local human capital base for a changing world, we will grant relief for corporate income tax paid by privately owned managed universities to the extent that profits are ploughed back to expand or maintain facilities,” he noted.

Tax holidays for young entrepreneurs

As part of the governments attempts to bolster young entrepreneurs, categorized into ages 35 and below, it will, through the National Entrepreneurship and Innovation Plan grant tax holidays based on the number of persons employed by start-ups or early stage businesses.”

“A preferential tax rate of between 3 to 5 years will be granted after the tax holiday. They will also be allowed to carry forward losses for five years,” the Finance Minister announced.

Special Import Levy to stay

The National Fiscal Stabilization Levy and the Special Import Levy will be extended to the end of 2019.

The Special Import Levy, which was introduced in 2017 by the previous government, received huge backlash from importers who described it as a nuisance tax.

The National Fiscal Stabilization Levy is imposed on Non-Bank Financial Institutions, Insurance companies, Telecommunications companies, maritime and airport terminals, among others.

Other reforms

• The 7.5 percent income tax on the commission of lotto marketing companies will be abolished along with the 5 percent withholding tax on lotto prizes.
• The government will introduce voluntary disclosure procedures (VDP) in the revenue administration act, 2016 (Act 915) to waive penalties on voluntary disclosures and payment of unreported and understated taxes by tax payers. Tax payers will be required to arrange to pay such taxes withinperiodiod agreed with the Ghana Revenue Authority.
• In 2018, amnesty will be sought from Parliament to exempt taxpayers who register and file returns, within a targeted period, from paying penalties and interest for late or non-submissions of returns and late payments. This will also include exemption from prosecution.
• Alternative Dispute Resolution Mechanisms will be introduced to resolve tax disputes “in order to instill confidence in investors.”

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This is equivalent to 25.7 percent of the country’s Gross Domestic Product (GDP), and represents an annual growth of 14.5 percent.

The Finance Minister made the announcement today, Wednesday, November 15, 2017, in parliament during the national budget presentation.

According to him, “Total revenue and grants for the 2018 fiscal year has been conservatively estimated at 51 billion cedis based on our projection of the level of economic activity in 2018, government policy on taxation, and donor grant disbursement.”

Mr. Ofori-Atta also disclosed that, total money received from upstream petroleum activities in the same period under review, amounted to 3.2 billion, and estimated at 6.2 percent of Total Revenue and Grants.

“This is about 1.3 percent of GDP, and represents a per annum growth of 24.8 percent over the 2017 projected out-turn.”

From this, the Finance Minister explained that, government expects 50.5 billion cedis from domestic revenue, representing an annual growth of 26.9 percent.

He added that non-tax revenue is pegged at 8 billion cedis, equivalent to 3.3 percent of the GDP.

Of this amount, Internally Generating Fund (IGF) Institutions are expected to retain to get about 3.8 billion cedis .

“Revenue inflows from the Energy Sector Levies, specifically, the Energy Debt Recovery Levy, and the Price and Stabilization Levy, is estimated at 2.1 billion cedis. These inflows are reported for transparency purposes and are not intended for budget use,” he clarified.

On Grants from development partners, Mr. Ofori-Atta stated that, funds expected for projects in that area are estimated at 586.8 million cedis.

He however added that, government is not expecting any programme grants from development partners.

“It is important to note that, as a middle-income country, these donor resources will cease with time, emphasizing the urgent need to boost domestic revenue mobilization,” he stressed.

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Consumers in the non-residential category will also see a 13 percent drop in tariffs.

[contextly_sidebar id=”hg88yF3MuD3bS28zMJOnYNEkdLwzEfAz”]The high electricity tariffs were a major part of the New Patriotic Party (NPP)’s campaign ahead of the 2016 elections, with many of the party’s communicators claiming that electricity cost more than rent.

The Akufo-Addo government explained previously that it could not reduce the tariff in the 2017 budget due to moves to stabilize power supply in the country.

Finance Minister, Ken Ofori Atta’s budget reading reminded of the hardship Ghanaians endured during the height of the power crisis between 2013 and 2015.

Following promises to reduce electricity tariffs, Mr. Ofori Atta said Akufo-Addo administration has now revised tariff setting methodology and cost structure for power production.

He said recommendations are going to be made to the Public Utilities Regulatory Commission in this regard, which will bring a little more relief to businesses and domestic users of electricity.

“In 2018, efforts will be geared towards keeping the lights on at affordable rates to consumers, particularly industries and small business through reform and policy interventions over a two-year period. The electricity tariff structure will be realigned with government’s developmental goals of industrial transformation growth and job creation,” the Finance Minister explained.

There are six customer categories; residential, non-residential, special load tariff (low voltage), special load tariff (medium voltage), special load tariff (high voltage) and high voltage mines.

The proposals granted High voltage mines the biggest reprieve with 21 percent. The other categories will see drops around 13 percent if the proposals are considered.

Scrapping of 4-tier tariff system

In providing relief to the poor, who consume within the lifeline subsidies, but are likely to be living in compound houses, thus robbing of them such benefits, the current 4-tier tariff classification for residential consumers “will be collapsed into lifeline and non-lifeline consumers in phases,” Mr. Ofori Atta said.

Lifeline users currently pay 33.56 pesewas per kilowatt hour in addition to the 633.17 pesewas service charge monthly.

Initial skepticism from NDC

Members of the Minority in Parliament were however skeptical of the government’s pledge to reduce electricity tariffs in the budget.

According to the Minority Spokesperson on Mines and Energy, Adams Mutawakilu, the expectation of gas coming on stream to power thermal plants as a means of driving down electricity cost for the ordinary Ghanaian would not materialize.

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In the 2018 Budget address, under the theme, “From Stabilization to Work; Putting Ghana to Work Again”, the Finance Minister, Ken Ofori-Atta, said 100,000 tertiary graduates will be employed under the NBC in 2018.

Every one of Ghana’s 216 districts should be able to provide jobs for 462 graduates, the Minister said.

The NBC, which will be based in the office of the President, will focus on alleviating shortfalls in public service delivery.

Graduate unemployment is seen to be at critical levels in Ghana with data from the Institute of Statistics, Social and Economic Research (ISSER) of the University of Ghana, noting that only 10 percent of graduates find jobs after their first year of completing school.

ISSER’s research also indicates that, it may take up to 10 years for a large number of graduates to secure employment due to varied challenges.

The government believes the NBC programme will see a turn for the better as Mr. Ofori Atta said this step “will be a major government initiative to address livelihood empowerment and graduate unemployment to solve economic and social problems.”

“The focus of the initiative will be solving public service delivery in health, education, agriculture, sanitation and drive revenue mobilization and collection.”

NBC to support other gov’t targets

Like the Youth Employment Agency, which targets non-tertiary graduates, the NBC has a number of subsets which are connected to other major government targets and initiatives.

On the back of the Sanitation Campaign launch and the anticipated Sanitation Brigade, the Finance Minister noted that, the NBC has made provision for sanitation inspectors under a “Clean Ghana” Programme. These inspectors will focus on enforcing sanitation laws.

Trained nurses and other healthcare workers will provide health care to deprived and rural communities under a “Heal Ghana” module.

The 2018 Budget Statement made known government’s intent to ensure tax compliance, and NBC will be contributing to these aims with its “Revenue Ghana” programme.

Ghana currently has six million taxable citizens, but only 1.2 million are paying tax.

Tertiary Graduates under “Revenue Ghana” programme will “mobilize the youth to collect taxes that have been difficult to mobilize and enforce collection,” Mr. Ofori Atta stated.

There will also be “Teach Ghana” and “Feed Ghana” modules under this special initiative.

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The Minister of Finance , Ken Ofori-Atta, who made this known whiles presenting the 2018 Budget and Policy statement in Parliament today , [Wednesday], indicated that a total of 2,160 university graduates and 1,070 youth were employed under the programme, to register and provide extension services to farmers across the country.

According to the Minister, “121, 000 MT of subsidized fertilizers and 4, 454.98 MT of subsidized seeds of cereal, legumes and vegetables have been distributed to beneficiary farmers.”

“The programme also registered suppliers to distribute farm produce to public institutions including the School Feeding Programme, the Free Senior High School Programme, Prisons, Defence and Police, among others to ensure availability of quality food in a timely manner in these institutions,” the Minister added.

Boosting Planting for Food and Jobs

Planting for Food and Jobs, which is expected to to be rolled out in all 216 districts across the country, involves the supply of farm resources such seedlings to participating farmers, and its first phase targeted the creation of more than 750,000 jobs.

Mr. Ofori Atta noted that, investments under the Planting for Food and Jobs will be scaled up.

But the government wants APA to take numerous steps further, as duties on agriculture processing equipment are expected to be abolished along with support granted to agribusiness start-ups.

Minimizing the risk of agriculture financing will also be a target of the government, through agriculture financing and crop insurance schemes.

Funds from the Infrastructure for Poverty Eradication Programme (IPEP), could possibly be diverted to “increase the pace of agriculture mechanization,” according to the Finance Minister.

Major milestones achieved under Planting for Food & Jobs

The Minister also outlined what he termed as “major milestones achieved nationwide” under the programme. These include :

• The Distribution of about 80,000 bags of cereal and legume seeds,  36,000 sachets of vegetable seeds and about 2,000,000 bags of fertilizer

• Recruitment of 822 agricultural extension personnel

• Establishment of a task-force to assess status of warehouses and storage facilities nationwide for rehabilitation

• Creation of market opportunities for farmers by linking them with institutional buyers such as School Feeding Programme and Prisons Service.

• Electronic registration of over 34, 000 farmers out of more than 200,000 manually registered

The Planting for Food and Jobs programme is one of the government’s flagship programs aimed at improving agricultural production in the country.

The government said the program will create some 750,000 jobs and would motivate farmers to grow staple foods such as maize, millet, and beans.

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This represents a 0.5 percent increase, compared to 2017 which was pegged at 6.3 percent.

Presenting the 2018 Budget and Financial Statement in parliament today, Monday, November 15, 2017, Finance Minister, Ken Ofori-Atta, stated that government targets “overall GDP growth rate of 6.8 percent, with non-oil GDP growth rate of 5.4 percent”.

“Our prime focus is to ensure that the fiscal deficit, which remains our principal fiscal anchor, continues on a downward trajectory, reaching 4.5 percent of GDP from the projected 2017 end-year estimate of 6.3 percent,” he added.

In addition, Mr. Ofori-Atta announced that, government is targeting an end-of-year inflation rate of 8.0 percent, lower than the 11.2 percent targeted for 2017.

Currently, inflation rate [October] is at 11.6 percent.

Mr. Ofori-Atta is hopeful the fiscal deficit of the country may stabilize below 5 percent of GDP, as government puts in all the macroeconomic measures to grow the economy.

“Achieving this objective is not only critical, but necessary if we are to maintain the healthy primary balance surplus required to eventually reduce the rate of debt accumulation,” he said.

He maintained that there is the need to boost domestic revenue through innovative channels that will not place undue burden on the entire populace.

“We must make these decisions in good time to ensure that our future generations will be bequeathed with a priceless inheritance of sustainable fiscal environment.”

“In this vein, optimizing resources mobilization through improved tax compliance and efficient and effective revenue administration, remains an important part of our fiscal strategy to boost domestic revenue mobilization for 2018 and the medium-term,” he added.

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The budget is the second to be read by Akufo-Addo administration since it took over the administration of the country in January 2017.

The budget is expected to focus on about 10 key areas including infrastructure, macroeconomic stability, job creation, agriculture, entrepreneurship, business growth, creating a Ghana beyond aid, debt management, corruption, public sector reforms among others, and a continuation of the 2017 budget initiatives.

It will also focus mainly on tax reforms, by specifically roping in many people in the informal sector into the tax net.

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