Towards the end oflast year, a number of events not all of them related, rocked the economies of the major Western nations to the extent that talk of an economic downturn moved from prediction to certainty. It is generally believed that difficulties with Western economies sooner than later transmit into global problems with the worst effects being felt in developing countries such as Ghana. However, Mr. Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning forecasts a robust economy for Ghana in 2008. However, this optimism is tinged with a caveat. In an exclusive interview with Sunday World, the Minister explained that his sunny outlook on the nation's economy for the New Year depends on hard work and a united focus. "The economy is like the human body which needs (healthy) organs to work effectively for survival, hence all we have to do is work harder together in order to achieve the best results." Despite the credit crunch affecting the global banking system and the high price of crude oil, the Minister insists that we are in a good position because the principal parts of our national economy are doing well; "Food crops, fishing, forestry and other sectors are all doing well. When you go to the cocoa areas the farmers are producing enough to be exported, that tells you we are on the right track. You can tell if the economy will do well if one looks at the quantity we are producing under the agric sector and this is not bad." Mr. Baah Wiredu however, acknowledged the damage that could be done by the crippling high price of crude oil, noting that the price of the commodity has risen from 55 US dollars in January to nearly 100 dollars in December. This is affecting the country's foreign exchange reserves and can have a deleterious effect on the economy as a whole, but the Minister said that the government has made provision for the oil price hikes. According to him, the mining and quarrying industries are also expanding. "People are building because they have the materials at their disposal." He also noted that manufacturing industries of all sizes, small, medium and large are expanding, although this may not stand up to scrutiny as the received wisdom is that the country's industries are wilting under the heat generated by globalization and Chinese penetration of the local market. On electridty, Mr. Baah Wiredu explained that more power is being generated because the government has heavily invested in the energy sector. He further intimated that "We are now in a better position to quantify more accurately the cost per unit of the power being generated. Cost price is 12 pesewas per unit but individuals are being made to pay 8 pesewas per unit while government subsidizes the rest". This shows that electricity is still being subsidized by the government. There is good news on the water front too which should warm the hearts of millions of Ghanaians for whom finding potable water is a daily grind, if the Minister's words are true. "Water production is also increasing and for that matter the frequent water shortages will be a thing of the past". Government is to invest GHc7,470,000 in potable water projects across the country. The Minister was in a cheerful mood as could be seen from his bright smile when he described how well other sectors were doing. He said that finance and insurance businesses are in a better shape than ever before, which will have an impact on other sectors as well. According to him, an indication of the health of the economy can be gleaned from the state of construction: "We can all see tne amount of construction going on around us, and these are in the major social areas such as roads, schools, clinics, hospitals and so many others. This will continue this year. We have decided to construct a number of kilometers per district meaning most roads will now be tarred thereby making most of our roads motorable". "One of the most talked about areas of the economy is the generation of employment. Under the Youth Employment Programme, young people are getting jobs, in addition to the jobs that are being created in other areas such as agriculture, road and building construction". The Minister cited other policies that have direct positive impact on the economy, including the capitation grant and schoo1 feeding programmes "which are also helping the economy." The Minister mentioned five najor activities that will take place in Ghana and have an impact on the economy and the country as a whole. These are the coming football fiesta, GHANA 2008, the UN Conference on Trade and Development, a high level forum on the effectiveness of international aid, a conference of finance ministers from all over the world, and finally the elections in December. He said the elections will affect the economy because people will move around and spend money in the process. Speaking on the prospects of the government fulfilling its budget obligations, the Minister revealed that although the government needs 10 billion US dollars, it has only 4.4 billion dollars, from its revenue sources and would need the rest in grants and loans. The gap between revenue and projected expenditure explains why the government cannot accede to the demands of those who want taxes on petroleum products reduced or removed. "People must know that it is this tax we call revenue which is used to pay salaries, social security and run the economy. If people want the tax on petroleum to be reduced then they must be prepared for a reduction in salaries," Baah Wiredu said. Source: Sunday World