Implications of the Fall in Crude Oil Prices on the 2015 Budget
Rt. Hon. Speaker and distinguished Hon. Members, I appear before you today to apprise Parliament and, through you, the people of Ghana on the implications of the decline in crude oil prices and its likely impact on the 2015 Budget. The purpose of the Statement is also to inform you of the steps Government has been taking to address the said issue to ensure that the macroeconomic objectives of Government is achieved.
Mr. Speaker, it is important to stress that the steps which Government is taking are in line with measures and policies approved by this august House in the 2015 Budget.
Following my appearance before this House in November 2014 and the subsequent approval of the 2015 Budget, the sharp decline in crude oil prices on the world market, has posed and continue to pose a challenge to the achievement of the 2015 economic programme. After careful consideration of these developments and the likely impact on revenues, Government has started to intensify the implementation of approved measures to ensure that MDAs and MMDAs remain within the lower than expected projected revenues.
Mr. Speaker, these fiscally prudent and responsible steps demonstrate the resolve of Government to implement policies to foster the attainment of the overall macroeconomic objectives outlined in the 2015 Budget. Furthermore, this will safeguard the achievement of the country’s bright medium-term prospects for the benefit of all Ghanaians. Mr. Speaker, it is important to note that, the impact of the decline in crude oil prices and the adoption of measures to address it is not peculiar to Ghana.
The measures being taken by Government are also informed by the fact that recent volatilities in cocoa and gold prices affected the country’s reserves and fiscal revenues negatively. In particular, they have contributed to the setbacks in the achievement of our macroeconomic objectives for the past two years. Likewise the impact of the shortfall in oil output in 2012, which contributed to the fiscal slippages that the Ministry of Finance has been addressing with some success since 2013.
It is, therefore, economically prudent to assess the impact of such commodity price volatilities on the economy on a timely basis—and as soon as they arise—and to take the required adjustment measures in order not to jeopardize the achievement of our macroeconomic objectives.
Mr. speaker, our approach and strategy has been to brief you, the people’s representatives, and the general public through press briefings on developments in the economy in line with our laws and best practice.