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					   2011 Supplementary Budget Speech




            REPUBLIC OF GHANA



SUPPLEMENTARY BUDGET SPEECH
           MID-YEAR REVIEW OF

                    the

 BUDGET STATEMENT AND ECONOMIC POLICY

                    and

        SUPPLEMENTARY ESTIMATES

                   of the

          GOVERNMENT OF GHANA

                   for the

           2011 FINANCIAL YEAR

                presented to

                PARLIAMENT

                     on

          Thursday 14th July, 2011

                     by

            DR. KWABENA DUFFUOR
 MINISTER OF FINANCE AND ECONOMIC PLANNING
             ON THE AUTHORITY OF
         H. E. JOHN EVANS ATTA MILLS
     PRESIDENT OF THE REPUBLIC OF GHANA
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                2011 Supplementary Budget Speech

INTRODUCTION


1.   Madam Speaker, following the approval of the 2011 Budget
     Statement and Economic Policy and coming into effect of the
     Appropriation Act, it has become necessary for me to once again
     appear before this august House to present a review of the
     performance of the economy and supplementary estimates in
     accordance with Article 179 (8) of the Constitution and Standing
     Order 143 of Parliament.

2.   In so doing, I wish to seek your approval for a supplementary
     appropriation of GH¢1,463,123,559 on behalf of the President, His
     Excellency John Evans Atta Mills, the details of which are presented
     in Section 5 of this report.

3.   It would be recalled that, the 2011 Budget Statement and Economic
     Policy document was based on actual data for the first three quarters
     of 2010 and a projected estimate for the last quarter.

4.   Since then, developments in both the domestic and global
     environment have necessitated some variations in the assumptions
     underlying the 2011 Budget and Economic Policy presented to this
     House in November 2010. Notable among these are:

     a. the passage of the Petroleum Revenue Management Act (PRMA),
        2011, Act 815. Key provisions in the law have direct implications
        for the estimation of the Benchmark Revenue, determination of
        the Annual Budget Funding Amount (ABFA) and transfer of funds
        into the Ghana Petroleum Funds Account. The passage and
        implementation of the Act coupled with increases in crude oil price
        on the world market and production volumes have meant upward
        adjustment in revenue projections;

     b. the receipt of two (2) major inflows from the World Bank and sale
        of Anglogold shares in lieu of royalties expected in 2010 were
        realized in the first quarter of 2011; and

     c. increased revenue collections from tax administrative measures.

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                  2011 Supplementary Budget Speech

5.    Madam Speaker, permit me to express my appreciation to you
      personally, the leadership of the House and Honourable Members for
      your deep sense of duty and dedicated efforts in sustaining the
      principles of good governance that have underpinned the stability
      and growth agenda of Government and have delivered very positive
      socio-economic outcomes.

6.    With your permission, I would like to present to the House this
      morning, an abridged version of the supplementary budget. The
      Hansard Department is, therefore, kindly requested to capture the
      entire Supplementary Budget tabled and circulated for your
      information and action.

7.    Madam Speaker, real GDP growth increased significantly from 4.0
      percent in 2009 to 7.7 percent in 2010, in addition to other equally
      impressive performance indicators such as the longest and sustained
      single digit inflation in the history of this country. It is, therefore,
      appropriate for Parliament, and indeed the entire nation, to be
      apprised of this spectacular performance.

8.    Madam Speaker, developments since the last quarter of 2010
      suggest that the “Better Ghana” agenda of government is on course.
      The evidence includes:

             sustained macroeconomic stability;
             high economic growth;
             on-going infrastructure development; and
             on-going social intervention programmes.


9.    Moreover, our Petroleum Risk Management intervention has shielded
      the economy from market uncertainties and minimized the negative
      pass-through effects of crude oil prices from the international market.

10.   Madam Speaker, it is worth noting that inflation, the bane of
      macroeconomic management in this country, has been brought under
      control through prudent fiscal and monetary management. This has
      been supported by good management practices and policies in the
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                 2011 Supplementary Budget Speech

      agriculture sector geared towards increased food production. As a
      result, inflation has fallen from 20.7 percent in June 2009 to 8.6
      percent in June 2011.

11.   Madam Speaker, in line with the theme of the 2011 Budget
      Statement and Economic Policy, the progress made so far in
      economic management provides a solid foundation for accelerated
      growth and job creation. The goal is to effectively harness every
      available resource and utilize it in an efficient and transparent
      manner to drive growth and improve the living standards of
      Ghanaians.

12.   Madam Speaker, the constraining effects of payment arrears on
      macroeconomic management and Government‟s development
      agenda was highlighted in the 2011 Budget Statement and Economic
      Policy. We indicated that measures would be taken to efficiently
      manage the stock of domestic arrears and commitments in order to
      mitigate their impact on the economy over the medium term. We
      also promised that Parliament will be duly informed about additional
      proposals for the management of arrears and commitments in the
      course of the year. It is my pleasure to report that significant
      progress has been made resulting in the payment of a substantial
      proportion of the arrears.

13.   In light of the developments highlighted earlier, this report seeks to:

            present the outturn of macroeconomic performance for the
             2010 fiscal year;
            provide a performance report on the economy for the first
             five months of 2011;
            present to this august House revised budget estimates
             based on current information;
            provide information on the outlook for the rest of the Year;
             and
            request members of this august House to consider and
             approve supplementary estimates for 2011.

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                 2011 Supplementary Budget Speech


14.   Madam Speaker, it is my pleasure to present the Mid-Year Review of
      the Budget Statement and Economic Policy and Supplementary
      Estimates for 2011.




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                 2011 Supplementary Budget Speech

MACROECONOMIC DEVELOPMENTS AND FISCAL PERFORMANCE
FOR 2010

Gross Domestic Product (GDP) Growth

15.   Madam Speaker, our rebased National Accounts and the latest
      information from the Ghana Statistical Service points to a rebound of
      economic activities. With a modest growth of 4.0 percent in 2009,
      GDP grew to 7.7 percent by the end of 2010, making it one of the
      highest growth rates in our history. This surpasses the provisional
      outturn of 5.9 percent based on September 2010 information.

16.   The quick turnaround in economic activities is mainly attributed to
      prudent macroeconomic management which has led to increased
      investor confidence in the economy. This has stimulated business
      activities, financial intermediation and wholesale and retail trade.



Inflation Developments

17.   Madam Speaker, end-period inflation rates have declined drastically
      from the high rate of 20.7 percent in June 2009, to 9.5 percent in
      June 2010 and remained in single digits for the ensuing months,
      reaching 8.6 percent at the end of December 2010.



Balance of Payments

18.   Madam Speaker, Ghana‟s terms of trade improved as at the end of
      2010 fiscal year. Export earnings increased by 36.3 percent from
      U$5,839.7 million in 2009 to US$7,960.1 million in 2010. This was
      largely due to an upsurge in gold and cocoa earnings.

19.   The overall balance of payments registered a surplus of US$1,462.7
      million in 2010, up from a surplus of US$1,158.8 million in 2009,
      driven mainly by improvements in the capital and financial accounts.


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                  2011 Supplementary Budget Speech

20.   As a result of the favourable balance of payments position, gross
      international reserves increased by US$1.6 billion to US$4.7 billion at
      the end of December 2010, translating on an average into 3.8
      months of import cover for goods and services.



Fiscal Performance for 2010

21.   Madam Speaker, one of the main objectives of the 2010 Budget was
      to continue the progress in fiscal consolidation to ensure
      macroeconomic stability for accelerated growth. To this end, the
      fiscal balance was used as the fiscal anchor, and targeted a further
      reduction in the fiscal deficit from 5.8 percent of GDP in 2009 to
      4.4 percent of GDP in 2010. This target was to be achieved through
      expenditure rationalization and management and enhancing revenue
      mobilization.

22.   Provisional data on the 2010 Budget implementation indicates that
      domestic revenue was 7.6 percent lower than the budget target,
      grants were also below target by 20.8 percent. Total revenue and
      grants fell below the budget target by 9.4 percent. On the other
      hand, expenditures were higher than target by 4.5 percent.

23.   Madam Speaker, given the revenue and expenditure performance for
      the 2010 fiscal year, the fiscal deficit on cash basis amounted to
      GH¢2,999.9 million, equivalent to 6.5 percent of GDP against a target
      of GH¢1,945.1 million, equivalent to 4.4 percent of GDP.

24.   The domestic primary balance for the period under review registered
      a surplus of 0.1 percent of GDP, against a budget target of 0.7
      percent of GDP.




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MACROECONOMIC AND FISCAL DEVELOPMENTS FOR MID-YEAR
2011


Gross Domestic Product

25.   Madam Speaker, the Ghana Statistical Service has started producing
      quarterly Gross Domestic Product data to assess sectoral
      performance of the economy. On year-on-year basis, however, the
      first quarter of 2011 showed a 23 percent growth in GDP over that of
      the same period in the previous year of 2010. The sub sectors that
      contributed to the growth are crops (mainly cocoa); mining and
      quarrying (influenced by crude oil production); manufacturing
      (fabricated metals, wood products, rubber and plastic products,
      machinery and equipment and footwear manufacturing);
      construction; transport and storage and business service activities.

26.   Provisional quarter-on-quarter estimates of the real GDP showed a
      growth of 21.4 percent and 5.3 percent in the industry and services
      sectors respectively. However, these were moderated by a decline of
      35.7 percent in the Agriculture sector. The decline in the Agriculture
      sector growth rate is explained by the sector‟s strong seasonal
      production pattern that is characteristic of the first and second
      quarters of each year.



Inflation Developments for Half year 2011

27.   Madam Speaker, following the 30.0 percent domestic petroleum price
      adjustment in the beginning of the year 2011, headline inflation
      edged up slightly to 9.1 percent in January. Another increase of 9
      basis points in February, driven largely by the second round effects of
      the petroleum price adjustments, moved inflation up to 9.2 percent.
      With full pass-through of the petroleum price hike, March and April
      2011 inflation showed marginal declines to 9.1 percent and 9.0
      percent respectively. By the end of June 2011, inflation had reached
      8.6 percent. This positive performance was supported by improved
      domestic food production and a relatively stable currency.

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                  2011 Supplementary Budget Speech



Monetary and Financial Developments for January – May 2011

28.    Overall developments in the banking system through May 2011 show
       that the banking sector continues to perform creditably with strong
       asset growth and improvement in the financial soundness indicators
       of banks. Total assets of the banking industry grew by 27.2 percent
       to GH¢18.1 billion at the end of May 2011.


      Interest Rates
29.    Madam Speaker, monetary policy eased considerably in 2010 to
       stimulate economic growth. From 16.0 percent in February 2010, the
       monetary policy rate was lowered to 13.5 percent in July 2010 and
       remained unchanged till April 2011 when it was reduced to 13.0
       percent. These developments contributed to a downward realignment
       of interest rates along the spectrum of the yield curve and a
       lengthening of the maturity structure of government securities.
       Currently, the monetary policy rate has been reduced to 12.5 percent
       in July 2011.

30.    Between December 2010 and May 2011, the 91-day Treasury bill rate
       declined from 12.3 percent to 10.6 percent. The rate on the 1-year
       note also fell from 12.7 percent to 12.0 percent. Similarly, the
       overnight interbank rate, the rate at which commercial banks borrow
       from each other, declined to 11.6 per cent.

31.    Madam Speaker, a lot of concerns have been raised within parliament
       and the general public about the high lending rates of the deposit
       money banks. As a result the Bank of Ghana has set up a committee
       to hold consultations with the banking sector to review the factors
       that determine the base rates.




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                  2011 Supplementary Budget Speech

Balance of Payments for January – May, 2011


32.   Madam Speaker, provisional estimates for January – May 2011,
      indicate that total merchandise exports grew significantly to US$5.3
      billion indicating a growth of 66.2 percent over the same period in
      2010. This performance was mainly on account of oil, cocoa and gold
      exports.

33.   Total merchandise exports recorded an amount of US$5.6 billion,
      indicating a growth of 32.4 percent.

34.   Private inward remittances amounted to US$7.1 billion, a growth of
      68 percent over the US$4.2 billion recorded in the same period in
      2010.

35.   At the end of May 2011, Gross International Reserves was US$4.7
      billion, representing 3.7 months of import cover of goods and
      services.



Fiscal Performance - January to May 2011

36.   Madam Speaker, fiscal policy as outlined in the 2011 Budget aims at
      continuing the progress made in restoring fiscal sustainability to
      ensure macroeconomic stability. The 2011 Budget sets the fiscal
      deficit as the fiscal anchor, and targets a fiscal deficit equivalent to
      4.1 percent of GDP.

37.   Based on end 2010 fiscal performance as well as developments in
      both the global and Ghanaian economy, the deficit target for the
      2011 fiscal year has been revised upwards to 5.1 percent of GDP to
      allow for more fiscal space and for the clearance of more payment
      arrears. In spite of the need for more fiscal space resulting in the
      increase in the fiscal deficit target for 2011, government is mindful of
      the importance of fiscal and debt sustainability. Hence the revised
      fiscal deficit target indicates a further reduction from 6.5 percent of
      GDP in 2010 to 5.1 percent in 2011.

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                  2011 Supplementary Budget Speech

38.   Provisional data for January to May on the implementation of the
      2011 Budget indicates that domestic revenue was 11.2 percent
      higher than the budget target, but grants were below target by 28.7
      percent. On the back of strong domestic revenue performance, total
      revenue and grants were higher than the budget target by 5.7
      percent. On the other hand, expenditures were higher than estimated
      by 6.5 percent. This resulted in a cash fiscal deficit equivalent of 1.8
      percent of GDP, against a target of 1.9 percent of GDP. The outturn
      indicates a narrowing of the deficit equivalent to 1.8 percent during
      the first five months of the year compared to a deficit equivalent to
      3.3 percent of GDP recorded during the same period in 2010.

39.   During the period, the domestic primary balance registered a surplus
      of GH¢688.7 million, equivalent to 1.2 percent of GDP. This compares
      with an estimated domestic primary surplus of 0.7 percent of GDP
      and a deficit equivalent to 0.6 percent of GDP recorded during the
      same period in 2010.

Outlook for the Rest of the Year

40.   Madam Speaker, developments in the first five months of 2011 point
      to an optimistic outlook for the rest of the year. Going forward, we
      are determined to strictly enforce the budget plans for the rest of the
      year inspite of the fiscal challenges, resulting from both domestic and
      external developments.

41.   Based on trends for the first five months of 2011, the tax collection
      targets are likely to be exceeded and steps that have been taken to
      address the problem of expenditure arrears will help in strengthening
      banks balance sheets, contributing to improved credit to the private
      sector.

42.   We expect a further reduction in inflation and increased GDP growth
      in 2011. Effective collaboration and coordination of our fiscal and
      monetary policies will be used to dampen any exogenous shocks to
      ensure a favourable budget outturn for 2011.



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IMPLEMENTATION OF SOME INITIATIVES


Management of Arrears

44.   Madam Speaker, it would be recalled that based on information
      available at the end of 2008, the stock of domestic arrears stood at
      GH¢1.8 billion out of which GH¢626.5 million was paid in 2009.
      The 2008 stock of domestic arrears excluded liabilities of State
      Owned Enterprises (SOEs). As promised in the 2011 Budget
      Statement and Economic Policy, far reaching measures have been
      adopted to efficiently manage the stock of domestic arrears both in
      the short and medium term.

45.   As a first step towards the management process, the scope of
      domestic arrears has been widened to include liabilities of Tema Oil
      Refinery (TOR), Volta River Authority (VRA) and Bulk Oil Storage
      Transport (BOST) arising from short and long term loans and other
      commitments owed to their creditors. The change in definition of
      arrears to include liabilities of the SOEs resulted in total domestic
      stock of arrears amounting to GH¢3.8 billion as at end 2010. Of
      this amount, the SOE‟s arrears amounted to GH¢1,771.8 million.

46.   Madam Speaker, a detailed strategy for liquidating the stock of
      arrears either through cash payments or securitization has been
      developed as part of the arrears management process. The decision
      on the quantum of cash payments takes into consideration
      government‟s cash flow over the medium term as well as possible
      inflationary impact of cash injection into the economy.

47.   Based on these considerations, a total of GH¢1.1 billion cash
      payments have been made to reduce arrears owed to road
      contractors, Statutory Funds and SOEs. Additionally, GH¢891.3
      million in bonds have been issued to creditors as part of the
      liquidation strategy. With these payments, government liabilities in
      respect of GETFund, DACF and NHIF as at the end of December 2010
      have been fully settled. The outstanding balance of GH¢1.7 billion
      will also be managed either through cash payments or securitization.


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48.   Madam Speaker, the efforts made by government to substantially
      repay the stock of arrears is not only intended to reduce the financial
      burden of contractors and suppliers but also to reduce the exposure
      of commercial banks to the accumulation of Non-Performing Loans
      (NPLs). The exercise has also strengthened the balance sheets of
      the SOEs in expectation that they would be able to operate on their
      own.



Local Enterprises and Skills Development Programme (LESDEP)

49.   Madam Speaker, the central theme of the 2011 Budget and Economic
      Policy is job creation. In furtherance of the job creation agenda, a
      new youth employment programme, known as the Local Enterprises
      and Skills Development Programme (LESDEP), has been
      commissioned by His Excellency, President John Evans Atta Mills, and
      is aimed at empowering the youth through the acquisition of skills
      supported with equipment and machinery.

50.   This initiative would provide opportunities for the critical mass of
      unemployed youth to acquire skills in specific areas such as mobile
      phone and laptop repairing, construction, agro processing and
      packaging, local foods and catering, local garment and fashion and a
      lot more.

51.   Madam Speaker, LESDEP is a public-private partnership programme
      under the auspices of the Ministry of Local Government and Rural
      Development that seeks to create and facilitate the acquisition of
      technical and entrepreneurial skills among the youth of this country.
      The overall vision of LESDEP is to train and equip 20,000 unemployed
      youth in the MMDAs by 2012. The programme has already been
      inaugurated in the Northern, Western, Central and Eastern Regions.



Biometric Registration for 2012 Election

52.   Madam Speaker, to advance the course of democracy through
      transparent, free and fair elections, government will support the

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      Electoral Commission to replace the voters register through a
      biometric registration exercise for the conduct and supervision of the
      2012 elections.

53.   Based on the budget submitted by the Electoral Commission, over
      GH¢80.0 million will be needed for the biometric exercise for the
      2012 electoral process, of which GH¢50.8 million would be
      required in 2011. Government has, therefore, released GH¢50.0
      million to the Electoral Commission to implement activities
      preceding the 2012 Presidential and Parliamentary elections.



Savannah Accelerated Development Authority (SADA)

54.   Madam Speaker, progress has been made since the inauguration of
      the SADA Board by His Excellency, President John Evans Atta Mills in
      December 2010. A comprehensive long-term development strategy
      and work plan has been prepared and a permanent secretariat is
      being established in the Northern Region to facilitate the
      implementation of programmes.

55.   Madam Speaker, Government has released an amount of GH¢8.0
      million out of an allocation of GH¢25.0 million for the 2011 fiscal
      year. Government will release the rest of the funds to SADA to
      ensure a speedy implementation of programmed activities. In
      addition, Government has made a provision of GH¢5 million in the
      Supplementary Budget.

56.   A GOG-Development Partners conference on SADA will be convened
      soon to, among others, solicit the support of development partners.

Payroll Management

57.   Madam Speaker, public sector wage bill has been rising sharply over
      the past years in relation to GDP and other expenditures. This,
      however, is not only attributable to wages or salary increases. It is
      acknowledged that there is the existence of unauthorized names on
      government payroll popularly referred to as „ghost names” even


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      though numerous attempts have been made in the past to clean-up
      the public sector payroll.

58.   One major contributing factor to the failure of past initiatives to
      remove ghost names has been the lack of adequate mechanisms to
      effectively identify „ghost names‟ on the payroll and delete them as
      well as preventing their re-appearance.

59.   Madam Speaker, government has embarked on an effective way of
      dealing with the issue of „ghost names‟ on our payroll using the
      electronic approach. It entails the capturing of biometric data of
      employees in the payroll system to check fraud and impersonation, a
      system that has proven to be successful in most countries that
      experienced payroll fraud in the past. The process of capturing finger
      prints of pensioners and their dependents has already begun in the
      Regions and is expected to be completed soon.




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REVISIONS TO   THE   2011   FISCAL  ESTIMATES   AND
MACROECONOMIC TARGETS AND REQUEST FOR SUPPLEMENTARY
ESTIMATES


60.   Madam Speaker, developments in both the global and domestic
      economies have made it necessary to revise the assumptions
      underlying the 2011 Budget that was presented to this august House
      in November, 2010. As a result, the 2011 revenue and expenditure
      estimates have been revised to reflect these changes.

61.   During the last quarter of the 2010 fiscal year, several measures
      were put in place to ensure improvements in tax revenue
      administration. These measures led to much improvement in revenue
      collection which resulted in higher than projected outturn for tax
      revenue in 2010 than was anticipated in the 2011 Budget. With
      further improvements in these administrative measures, it is
      expected that the 2011 revenue yields will be higher than what was
      estimated in the 2011 Budget Statement and Economic Policy.

62.   Madam Speaker, some of the developments in the domestic economy
      that have necessitated the revisions to the fiscal framework are as
      follows:

         passage and implementation of the Petroleum Revenue
          Management Act, 2011, Act 815, coupled with changes in world
          crude oil prices and revised oil production levels;

         disbursement of World Bank budget support for 2010 in
          February 2011;

         receipt of proceeds from the sale of shares in Anglogold Ashanti
          issued in lieu of royalty payments;

         clearance of arrears and commitments from previous years;
          and

         exchange rate developments.



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63.   With the passage of the PRMA, there is the need to implement the
      provisions in the Act. Key provisions in the PRMA that have direct
      implications for the fiscal framework include the following:

         estimation of the Benchmark Revenue;

         determination of the Annual Budget Funding Amount (ABFA);
          and

         determination of transfers to the Ghana Petroleum Funds.

64.   Madam Speaker, oil revenue projection in the 2011 budget presented
      to Parliament in November 2010, was based on an oil price
      assumption of US$70 per barrel as well as an average production
      level of 79,945 barrels per day.

65.   In accordance with the provisions in the Act and updated market
      information, the Benchmark Revenue has been revised upwards to
      reflect the updated petroleum production levels of 84,737 barrels per
      day and the estimated average unit price of crude oil of US$100 per
      barrel.

66.   Madam Speaker, revisions have been made to the fiscal and
      macroeconomic framework to reflect these changes. The revised
      macroeconomic targets for the 2011 budget are as follows:

          Real GDP growth (excluding oil) of 7.5 percent ;

          Real GDP growth (including oil) of 14.4 percent ;

          Overall fiscal deficit revised from 4.1 percent to 5.1 percent of
           GDP;

          Average inflation rate revised from 8.8 percent to 8.7 percent;

          End-period inflation rate revised from 8.5 percent to 9.0
           percent; and



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          Gross international reserves of not less than three months of
           import cover of goods and services.


Revisions to Total Revenue and Grants


67.   Madam Speaker, total revenue and grants have been revised
      upwards by GH¢1,366.2 million to GH¢11,967.4 million, resulting
      mainly from revisions to both oil and non-oil revenue.

68.   Total non-oil revenue and grants for the 2011 fiscal year have been
      revised upwards from GH¢10,017.8 million to GH¢10,716.6 million,
      equivalent to 18.9 percent of GDP. The revised non-oil revenue and
      grants for the year represents an increase of 21.6 percent over the
      outturn for 2010.

69.   Based on the new oil price assumption of US$100 per barrel as well
      as the revised estimated average oil production of 84,737 barrels per
      day and the new exchange rate assumption, total revenue from oil
      including the National Oil Company‟s carried and participation interest
      is estimated at GH¢1,250.8 million. Of this amount the Benchmark
      Revenue is estimated at GH¢923.4 million. The remaining is the
      amount due the Ghana National Petroleum Corporation as its equity
      and cash ceded to it.

70.   Total oil and non-oil revenue and grants for the 2011 budget have,
      therefore, been revised from GH¢10,601.1 million to GH¢11,967.4
      million, equivalent to 21.1 percent of GDP.



Revisions to Expenditures


71.   Madam Speaker, the outturn for some expenditure items in 2010 was
      higher than projected in the 2011 Budget. To ensure the setting of
      realistic expenditure levels in the budget to avoid budget overruns,
      some of the expenditure estimates for 2011 have been revised
      upwards.
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72.   Madam Speaker, in accordance with provisions of the PRMA, 70
      percent of the Benchmark Revenue amounting to GH¢646.4 million
      would be allocated as the Annual Budget Funding Amount (ABFA).

73.   An amount of GH¢327.3 million is estimated to be transferred to the
      Ghana National Petroleum Corporation as its equity and cash ceded
      to it out of the carried and participating interest.

74.   Consistent with the agreement with the PRMA, a total amount of
      GH¢277.0 million is estimated to be transferred into the Ghana
      Petroleum Funds as savings.

75.   Madam Speaker, total expenditure and provisions made for the
      clearance of arrears during the 2011 fiscal year have been revised
      upward by GH¢1,459.4 million from GH¢12,844.8 million to
      GH¢14,344.2 million.

76.   To ensure the allocation of more resources to finance public
      investment expenditures consistent with the PRMA, 70 percent of the
      ABFA will be used to fund domestically financed capital expenditure.
      As a result, other cash expenditure (Item 4) has been revised
      upwards from GH¢257.3 million to GH¢541.4 million.



Revised Overall Budget Balance and Financing


77.   On the basis of the revised revenues and expenditures estimates, the
      2011 Budget Statement and Economic Policy will result in an overall
      cash budget deficit of GH¢2,919.0 million, equivalent to 5.1 percent
      of GDP, against the earlier estimate of GH¢2,336.9 million, equivalent
      to 4.1 percent of GDP.

78.   Net domestic Financing of the budget is estimated at GH¢1,545.3
      million. It is worth noting that, Government has cleared a total
      outstanding amount of GH¢572.3 million owed by TOR to Ghana
      Commercial Bank.



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Request for Approval for Supplementary Estimates


79.   Madam Speaker, as mentioned earlier on in this presentation, the aim
      of this Supplementary Estimate is to seek Parliamentary approval to
      commit additional resources outlined in this report to fund additional
      expenditures resulting from the revisions made to the 2011 budget.
      We are requesting approval for a total amount of
      GH¢1,463,123,559 as supplementary expenditures.

80.   Madam Speaker, permit me to mention some specific programmes
      that would be supported with part of the supplementary funds:

                       ACTIVITY                 AMOUNT (GH¢)
       National Flood Control Programme            3,550,000.00
       Sakumono Sea Defence Works                  7,500,000.00
       Completion of Nima drains                   6,608,697.00
       Construction of Ferry on Black Volta        6,000,000.00
       School Feeding Programme                   10,000,000.00
       Sanitation                                 15,000,000.00
       Schools under Trees                         7,000,000.00
       Education Infrastructure                   40,000,000.00
       Road construction and Rehabilitation       40,000,000.00
       Purchase of Fire Fighting Equipments       11,361,000.00
       National Youth Employment Programme        10,000,000.00
       Youth in Agriculture and Mechanisation      6,000,000.00
       National Forest Plantation Development      5,000,000.00
       Rural Electrification                      15,000,000.00
       ECOBRIGADE                                 20,000,000.00
       MASLOC                                      5,000,000.00
       LESDEP                                     12,000,000.00
       Office of Parliament                       16,339,346.00
       Rehabilitation of Foreign Missions          3,000,000.00




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                  2011 Supplementary Budget Speech

CONCLUSION


81.   Madam Speaker, the Ghanaian economy has made significant
      progress over the past two and half years in the face of the
      numerous challenges that confronted the NDC government when we
      took over the management of the economy. The macroeconomic
      fundamentals have been well managed to ensure stability and growth
      and this has provided the appropriate environment for private sector
      growth and job creation.

82.   Madam Speaker, the macroeconomic stability witnessed over the past
      two and half years points to significant successes in a number of
      areas:

      a. budget deficit has been reduced to sustainable levels;

      b. the rate of Inflation has dropped to a single digit and is expected
         to drop even further;

      c. the gross international reserves of barely 2 months of import
         cover in 2008 has improved significantly to cover 3.7 months of
         imports.

      d. interest rates have generally trended downwards with the 91 day
         Treasury Bill rate standing at 10.6 percent as at May 2011
         compared to 24.7 percent at end December 2008.

83.   Madam Speaker, I wish to note that the President, His Excellency
      John Evans Atta Mills who just received a resounding endorsement to
      be the flagbearer of the NDC party for the 2012 election is
      determined to continue to provide the leadership, vision and direction
      to move this country to higher growth and development for improved
      living standards for our people.

84.   Government will not waver in its commitment to provide equitable
      development through the implementation of the numerous
      development and social intervention programmes in fulfillment of
      Government‟s “Better Ghana” Agenda.


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                 2011 Supplementary Budget Speech

85.   Madam Speaker, I hereby request the honourable House to consider
      this report and approve the supplementary estimates of
      GH¢1,463,123,559 in compliance with Article 179 (8) of the
      Constitution and Standing Order 143 of this House.

86.   Madam Speaker, the Appropriation Bill covering this Supplementary
      Estimates will be submitted to this august House in conformity with
      Article 179 (9) of the Constitution of the Republic of Ghana and
      Standing Order 144 of this august House.

87.   Madam Speaker, I beg to move.




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