The 2011 budget will not be an ordinary one, Finance Minister, Dr. Kwabena Duffuor has said while announcing that he will be presenting the Budget and Economic Policy Statement of the government to Parliament in the second week of November. "As you are aware, the year 2011 will mark the beginning of a new era in the history of this country when Ghana will begin to produce oil," he stated, adding that this new reality and the renewed focus on growth marks the next budget as different from the others. Following two years of efforts and policies to stabilise the macro-economy the underlying principle of the 2009 and 2010 budgets next year's budget is expected to focus strongly on generating high economic growth and building on the gains of macro stability. "We know where we are coming from. Now we have a stable currency, inflation has been falling for fifteen consecutive months, and the cost of government borrowing has been lowered," he told B&FT at a forum to consider inputs from the private sector into the budget. In the first eight months of 2010, the cedi achieved a combined appreciation in trade-weighted terns of 3.2% against its major trading currencies, compared to a depreciation of 9.7% in the same period of 2009. With the trend of declining inflation, the cost of public sector borrowing reflected in interest rates on government securities has been falling gradually; pulling down the banking sector's cost of deposit mobilisation. This stabilisation path, many fret, has come at a significant cost to the economy's growth; and analysts therefore welcome the renewed focus on growth and job-creation as a priority for the budget. "The 2011 budget will introduce critical growth-oriented strategies to improve the lives of Ghanaians. These interventions will include both social programmes in the education and health sectors, and growth-enhancing programmes in the infrastructure and economic sectors," Dr. Duffuor highlighted. Economic growth in 2011, for the first time in more than two decades, is expected to reach double-digit levels largely due to the anticipated boost in revenues and economic activity from the production of oil. The Minister disclosed that there will be major projects in the road, energy, housing and rail sectors to accelerate economic growth, which this year is projected to miss its 6.5% target by 0.6 percentage points. "It is my expectation that businesses will take full advantage of this opportunity and devise , innovative ways of creating sustainable jobs and increased incomes, which will act as a major catalyst for the much-needed economic activities that spur sustainable growth and development." He also pinpointed some major challenges that that are receiving attention as the 2011 budget statement is prepared many of which presently threaten the achievement of various targets in the 2010 budget. "Some of these challenges, which are structural, will require long-term measures; others require short-term decisive measures to accelerate the pace of economic development," he said. These challenges range from continuous subsidies to utility companies and their implications for the sustainable financing of state-owned enterprises; the mounting wage bill, reinforced by the implementation of the Single Spine Salary Structure (SSSS); and the mandatory earmarking of budgetary funds, which creates spending rigidities in the budget. "The impact of all of these is that there are very limited resources for effective service delivery and infrastructural development which the country critically needs," he stressed. The issue of tax evasions, exemptions, and non-compliance to the tax regime, as well as the limited contribution of the informal sector to the national tax pool, also continue to present serious challenges for fiscal management, the Minister contended. He therefore invited private sector inputs and ideas to help government fashion the right policies and take decisive action to surmount these several obstacles. Source: B&FT