MESSAGE ON THE STATE OF THE NATION BY THE PRESIDENT OF THE REPUBLIC,NANA ADDO DANKWA AKUFO-ADDO, ON THE OCCASION OF THE STATE OPENING OF PARLIAMENT ON TUESDAY, FEBRUARY 21, 2017. Mr. Speaker, It is good to be back here again in this Chamber, where I spent some 12 memorable years as a Member of Parliament. I recollect with nostalgia the vigorous debates of my days here as a Minority MP, and I have very fond memories of being on the Majority side also. I can see some old faces from my first days here – like the 2nd Deputy Speaker, Hon. Alban Bagbin, whom I came to meet in the House in 1997, and who became a good friend of mine; and Hon OseiKyei-Mensah-Bonsu, the Majority Leader, with whom I entered Parliament on the same side, at the same time. On December 7th, 2016, the Ghanaian people went to the polls, and voted decisively for change. As a result, today, I am here again in this House, this time as President of the Republic, having secured an emphatic, electoral victory. Mr. Speaker, we have to thank God for His Grace and Favour for a peaceful and smooth transfer of power, in which Ghanaians rose to the occasion, and made our nation the object of world admiration. The Ghanaian people are to be commended for their strong attachment to the principles of democratic accountability. I would like to take this opportunity, Mr Speaker, to express my sincere appreciation to my predecessor, President John Mahama, for his leadership and his role in the transition. His conduct has been a credit to our nation. Mr. Speaker, I am happy to see the presence in this House of two other former Presidents of the Republic, their Excellencies Jerry John Rawlings and John AgyekumKufuor. I am in the enviable position of being the first Ghanaian leader to be able to draw on the experiences of three living, former Presidents. This should, definitely, enrich my tenure of office. Mr Speaker, I congratulate you on your unanimous election to preside over the affairs of this House. It is a fitting acknowledgement of your distinguished service to our nation. I congratulate also your deputies on their appointments, the 1st Deputy Speaker, a respected member of the House, Hon. Joe OseiWusu, and 2nd Deputy Speaker, the veteran legislator, Hon. Alban Bagbin. I commend also the Majority Leader, my contemporary in this House, who can now put his extensive experience of Parliament to use as Leader of the House and Minister for Parliamentary Affairs. My compliments go, too, to the new Minority Leader, Hon. HarunaIddrisu, who announced himself on the national stage when he came here in my last term in the House. It is clear that he has an important future in Ghanaian politics. I want to assure him and the leadership of the House, on both sides, that I will co-operate fully with Parliament to enhance the governance of our nation to be able to do the business of Ghana effectively. Mr. Speaker, I use this occasion to commend the Electoral Commission and its Chairperson, Charlotte Osei, for the conduct of our recent elections, which has received domestic and international acclaim. In the coming years, I hope that our electoral processes will become even more robust, so that free and fair elections become automatic parts of our democratic culture. Mr. Speaker, certain incidents occurred during the transition period that are matters of concern to me, and should be to every Ghanaian, as they marred an otherwise dignified and successful transition. Wrongdoing has no political colour, and I do not subscribe to the lawlessness of political party supporters simply because their party has been elected into office. Mr. Speaker, when those incidents began, I instructed the then Inspector General of Police, John Kudalor, to apply the law, irrespective of political affiliation, to all lawbreakers. This instruction was also carried on to his successor, David Asante Appeatu. Both of them acted upon it, which helped to bring the situation under control. It appears these events were predicated on some concept of equalisation, as they happened in 2009, and were repeated again in 2017. I condemn all such conduct, and I call on all political parties, especially the New Patriotic Party and the National Democratic Congress, to ensure that this is the last time such undignified acts occur during our periods of transition. Mr. Speaker, I come before you, today, in fulfilment of the constitutional obligation that the President of the Republic gives a message to Parliament on the state of the nation at the beginning of Parliament’s session. Since my inauguration some six weeks ago as president of our country, I have set to work,putting into place the members of the team who will help me govern. I have heard it said that I am behaving like a man in a hurry. Mr. Speaker, I am, indeed, in a hurry, I am in a great hurry.The times, in which we live, demand that we, all, be in a hurry to deal with the problems we face. I am grateful,therefore,to the Honourable House for the expeditious manner in which my ministerial nominees have been vetted and approved, thus far. I look forward to the House dealing with the rest of the nominees I send, in an equally fast and efficient manner. Now that the processes for the composition of the Council of State have been completed, I shall inaugurate the Council this week, which will enable me to proceed rapidly with the appointments that need to be done in consultation with the Council. The full complement of appointments should be in place by the end of March. Mr. Speaker, the conditions in our country demand that government machinery functions efficiently and at full force, and that nothing is lefton autopilot. The conditions demand that all of us, each and every one of us, tackle every task before us with speed and dedication. Mr Speaker,to give a fair account of the state of our nation, I have to give an account of the state of our economy, of our governance and of our national culture and attitudes.This account will highlight some of the fundamental elements of the situation, and will not pretend to be a detailed, sectoral analysis of our condition. I leave that to the budget statement, to be delivered in ten days time. Mr. Speaker, I say nothing new or dramatic, when I tell this Honourable House that the economy of our country is in a bad way. After all, in the run-up to the recent elections, I said so, often and loudly. Some six weeks after taking over the reins of government,it gives me no pleasure to have to say that our worst fears have been confirmed, plus a few additional, unpleasant surprises as well. Mr Speaker, many get quite lost when economists start rattling figures andstatistics. I will try not to bore you with a lot of figures, but I hope you will bear with me as I have to put certain essential facts before our country. You would recall that, notwithstanding the fact that the previous government had more than ten times the financial resources than any other government since independence, its management of our economy in the run up to the 2012 presidential and parliamentary elections resulted in a quagmire that necessitated the urgent intervention of the International Monetary Fund (IMF) in 2014. The IMF programme negotiated was ostensibly to restore fiscal discipline, debt sustainability and increase economic growth. The previous government promised Ghanaians that the reckless public expenditure that characterized the 2012 election year would not be repeated in 2016. Mr. Speaker, the promises to the Ghanaian people were, however, not kept. In fact, virtually all the targets under the IMF programme, as at December 2016, have been missed. Fiscal indiscipline, once again, reared its head in the 2016 election year. Total projected expenditure for 2016 was GH¢43.9 billion (26% of GDP), but actual expenditure amounted to GH¢50.3 billion (30.2% of GDP). The full facts of the situation have not been put before the Ghanaian people. It appears, from what we are finding out, that some GH¢7 billion of arrears and outstanding payments circumvented the very public financial management system that was put in place to prevent such occurrences. These expenditures are being currently audited. Mr. Speaker, at the same time, revenue performance for the year was poor. The total revenue target for our country was GH¢37.9 billion (22.7% of GDP), but the actual revenue came in at GH¢33.2 billion (19.9% of GDP). Mr. Speaker, the combination of higher expenditures and lower revenues than projected resulted in a significant increase in the budget deficit for 2016. As compared to a target of 5.3% under the IMF programme, the fiscal deficit for 2016 was 9% of GDP on a cash basis and 10.2% of GDP on a commitment basis (that is on the basis of expenditures undertaken but not yet paid for). It should be recalled that, at the time Ghana entered into the IMF programme to restore fiscal discipline, the fiscal deficit was 10.2% of GDP. It is very clear, therefore, that the objectives set out in the programme have not been achieved. Mr. Speaker, the increasing fiscal deficits were financed by increased borrowing. As at the beginning of 2009, Ghana’s total debt stock was GH¢9.5 billion. By the end of 2016, the debt stock had ballooned to GH¢122 billion. Ghana’s debt stock now stands at 74% of GDP, after all the previous denials to the contrary. More debt was accumulated by the previous government in the last eight years than all other governments put together since independence! In fact, 92% of Ghana’s total debt stock was incurred in the last eight years under the previous government. The interest costs on this debt have also increased and will amount to an estimated GH¢14.1 billion in 2017. Mr. Speaker, the reality of the state Ghana’s public finances today are quite stark. Today, as a result of policy choices, we find ourselves in a situation where Ghana’s total revenue is consumed by three main budgetary lines: wages and salaries, interest payments and amortization and statutory payments. These three items alone account for 99.6% of government revenue. This means that anything else that government has to do outside of these lines will have to be financed by borrowing or aid. After eight years of the previous government, there is practically no fiscal space left. The persistent resort to borrowing for any additional expenditures to meet the aspirations of our people is also not sustainable. We cannot continue this way with our public finances. I will not allow this economy to collapse under my watch. We will reduce significantly the fiscal deficit this year. Mr. Speaker, Ghana’s economic growth has also declined dramatically. Notwithstanding the record amount of financial resources at the disposal of the previous government, Ghana’s GDP growth in 2016 (including oil) is estimated at 3.6%. This is the lowest GDP growth in about 23 years. Mr. Speaker, Ghana’s banking sector has not escaped the economic decline and has become increasingly fragile. Bad loans in the banking sector have risen significantly. Economic and Financial data from the Central Bank show that non-performing loans have risen sharply from 11.2% in May 2015 to 17.3% in December 2016. The recent Asset Quality Review of Banks shows significant vulnerability of banks to current economic conditions, with many exhibiting significant weaknesses. Mr. Speaker, low growth, rising rate of unemployment, high fiscal deficits, high and rising debt, and increased depreciation of the cedi, high cost of food, housing and utilities and high non-performing loans, amongst others, are symptoms of deeper structural problems that will require a range of reforms, beginning immediately and spanning the short, medium and long terms. We are going to have to implement some tough, prudent and innovative policies to get out of this financial cul-de sac and rescue this economy, restore fiscal discipline and debt sustainability as well as increase economic growth. Mr. Speaker, it gives me no joy to tell the story of the economy as it is – as we inherited it. Too much time, energy and resources were spent in the past, in my view, without a deliberate, conscious assessment of their impact on jobs, and whether or not we were spending wisely to improve the lives of the people, communities and businesses. But, I was not elected by the overwhelming majority of the Ghanaian people to complain. I was elected to get things done. I was elected to fix what is broken and my government and I are determined to do just that. At the beginning of March, the Minister for Finance will come to this House to lay out in the national budget the details of our economic policy and the clear roadmap that we have laid out for taking the country out of its current predicament and onto a sustainable path of recovery, jobs creation and prosperity. I am absolute in my confidence that we have the programme, the competence, the commitment, and the goodwill of the people to turn things around. By the Grace of God, we will succeed and I believe this House knows it too. In the immediate term, targeted legislative policy and institutional reforms will have to be undertaken to unleash the suppressed potential of the economy and allow Ghanaian entrepreneurship to rise and thrive, domestically and internationally. For too many young people, unemployment is sadly the reality of the start to their adult life. For years, for generations, it was assumed and guaranteed in this country that the quality of life of every generation would be an improvement on that of their parents. We are now faced with the phenomenon of parents looking on in frustration as their grown-up children remain at home, without the means to strike an independent life by themselves. This generation of Ghanaians dares not be the one to reverse this natural trend. We must create the atmosphere that generates jobs. We must boost the confidence of the private sector to invest in the economy. We must have the courage to start building our future and take the hard decisions that need to be taken to grow our economy. We have no choice but to reduce the budget deficit and cut waste in all sectors of public life. We must complete the formalisation of the economy. The process for a comprehensive national identification system and a property titling system will be completed this year. That will boost confidence in our country and increase investment from nationals and foreigners. Then we will be able to generate jobs. We must boost the confidence of the private sector to invest in the economy. Mr. Speaker, I believe the starting point in turning round our fortunes must be with agriculture. Unfortunately, the state of agriculture in our country right now is not good. Farmers are left on their own. It is not surprising, therefore, that food prices are high and we are having to import almost everything we eat, including vegetables from our Sahelian neighbours. And yet, agriculture provides the best opportunity to use modern methods to change the lives of many, within the shortest possible time. We have to irrigate our lands and equip farmers with the skills needed to make farming a well-paying business. We aim to popularize farming by encouraging many people to take it up as a full or part time activity. A National Campaign, “PLANTING FOR FOOD AND JOBS”,will be launched to stimulate this activity. An amount of 125 million Canadian dollars has been secured from Canada, a friend of our nation, to support the initiative. This Campaign will be anchored on the pillars that will transform agriculture: the provision of improved seeds, the supply of fertilizers, the provision of dedicated extension services, a marketing strategy and the use of e-Agriculture. To initiate the Campaign, the District Assemblies will be tasked to identify and register progressive farmers in each of the 216 districts. Mr Speaker, for too long our farmers have been left to cope by themselves, without the necessary support from government. For too long, our farmers have been left to the mercy of the vagaries of the weather. We have decided to embark upon a programme to provide water to enable all-year farming. We are calling it the one-village, one-dam policy. It is a programme that I expect will rapidly get the support of the population, and should help to transform food insecurity in our country. The three northern regions, in particular,will benefit from the availability of water to enable all-year farming, so that the enforced yearly migration can be minimized and food production become more predictable. I look forward to an increase in public investment in agriculture, starting from the first budget of my government. We must reverse the unfortunate trend of the past eight years, which saw a regular decrease in public investment in the sector that provides a living for the majority of our people. Mr Speaker,food processing has been the first step towards industrialization invirtually every country, and it is time for us to take it seriously. Not only will it serve to cut down on the wastage of crops during the high season, it will provide more jobs and expand farming business. Food processing will also save time in the preparation and cooking of our local foods,and there will be better control on the hygiene in the process. Mr. Speaker, I look forward to an exciting time in the agricultural sector. Mr. Speaker, if I were to ask each one of you in this Chamber, today, to tell me what the number one problem was in your constituency, I suspect there would be a uniform answer: JOBS. The most critical challenge, inherited by this NPP government, is the very high, unprecedented level of unemployment, particularly among the youth. It is a debilitating and confidence-sapping problem that affects every home. We can argue on what the official rate of unemployment is, but we can all see the desperation of our young people. They want to work, but there are no jobs and some of them are being driven to unacceptable behaviour. We have a veritable time bomb on our hands. To address this challenge, the government is embarking on one of the most comprehensive programmes for industrial transformation ever to be introduced in our country. The key elements of this programme are:
- restoration and maintenance of a stable macro-economy
- monetary and fiscal measures which will lead to a reduction in interest rates and a reduction in the tax burden on enterprises
- provision of reliable, affordable power to enterprises and homes
- setting up of a stimulus package to support existing Ghanaian industries and improve theircompetitiveness
- implementation of the initiative, through public-private partnerships, to establish at least one industrial enterprise in each of the 216 Districtsin the“One District, One Factory” policy
- development of strategic anchor initiatives as new pillars of growth for the Ghanaian economy, including the establishment of petrochemical industries; an iron and steel industry; an integrated aluminum industry; the expansion of the domestic production of pharmaceuticals; the establishment of a vehicle assembly and automotive industry; the production of industrial salt; the establishment of garment and textiles enterprises; and the manufacture of machinery, equipment and component parts
- establishment of a multi-purpose industrial park in each of the ten regions
- implementation of a comprehensive programme for SME development
- establishment of an industrial sub-contracting exchange to link large scale companies with SMEs
- implementation of an aggressive programme for export development, targeting, primarily,regional and continental markets
- enhancement ofdomestic retail market infrastructure and the active promotion ofthe marketing and distribution of domestically produced goods
- improvement of the business environment through regulatory and other reforms, and
- establishment of a permanent consultative forum for public-private sector dialogue.