President Dankwa Akufo-Addo has said intense efforts are being made by the government to rehabilitate the Tema Oil Refinery to enable it to contribute to stabilising petroleum prices.
President Akufo-Addo said the government was also encouraging private companies to establish refineries in the country, one of which was 80% complete, and expected to be commissioned before the end of this year.
Speaking on the vexed matter of petroleum price increases at the May Day celebrations last Sunday, President Akufo-Addo said the suggestion that the government reduce taxes on petroleum products at this moment was not a sustainable one.
Removing taxes on petroleum products, the President indicated would reduce the government's revenues by some GH¢4 billion at a time the government was determined to expand revenues to increase its capacity to finance development.
He said the government was currently confronted with tight financing conditions, adding that revenues from petroleum products were used to pay the salaries of about 700,000 public sector workers on the government's payroll.
President Akufo-Addo said the government was addressing the issue of fuel price increases by implementing measures to stabilise the exchange rate, a key determinant of fuel prices, as well as ensure reliable supply and availability of petroleum products to prevent shortages.
He said even though Ghana was a modest producer of crude oil, with a current output of 148,000 barrels per day, the country was still a net importer of petroleum products. "We, therefore, continue to be vulnerable to the price volatilities of the world market for petroleum products."
President Akufo-Addo acknowledged that the country was in difficult times, but said the government had not thrown its hands in despair. On the contrary, "we are working hard to address the current challenges facing the economy, and those that relate to improving the quality of life for all Ghanaians."
"I will be the first to admit that conditions of service in the wider public service need improvement. However, these should be done within budgetary constraints to ensure that we do not put excessive pressure on our public finances," he stated.
The President said the government in 2021, spent GH¢31.7 billion, out of tax revenue of GH¢56.5 billion, to pay for compensation of public sectors worker.
Thus, payment for compensation of 700,000 public sector employees, absorbed 56% of tax revenue in 2021, a ratio which is well above the ECOWAS threshold of 35%, and above the sub-Saharan Africa average of 43%, creating an overall fiscal impact of some GH¢27.3 billion, representing 6.8% of GDP.
In addition, he said, adverse global developments had impacted severely the exchange rate and inflation, with the overall effect being the weakening of the real incomes of people in Ghana, just as in other countries.
He said despite the stark realities, the government could not take ad-hoc measures to address the issues of a pay rise that would only give a reprieve but aggravate the situation even more in the medium to long-term.
In an attempt to hasten economic recovery from COVID-19, the President said the government had introduced measures to improve fiscal consolidation and ensure debt sustainability, which was critical to achieving macroeconomic stability in the short to medium-term.
Measures such as the passage of the E-Levy Bill, President Akufo-Addo indicated were introduced at the back of a revenue loss of GH¢13.1 billion and an increase of unbudgeted expenditure of GH¢14.2 billion.
Protecting jobs and incomes in the era of COVID-19 and beyond, according to the President, was undeniably the collective responsibility and duty of all social partners.
President Akufo-Addo urged Organised Labour as much as possible, to use existing institutions and sustainable measures to address their concerns.
The President urged Organised Labour and all Ghanaians to work hard to increase productivity "so we can increase salary levels and provide the basis for paying Living Wages."
He commended Organised Labour and its leadership for their invaluable contribution in helping to keep the country going during the peak of the COVID-19 pandemic.
"Your co-operation has been a mark of patriotism, and I applaud you for that. Indeed, you continue to uphold the tradition of national engagement initiated by the legendary pioneers of Ghanaian trade unionism, Pobee Biney, Vidal Quist, Anthony Woode, through whose work and sacrifice we have inherited the free, independent Ghana in which we now live."
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