Budget to usher in growth, stability

Centre Spread, Nov 19, 2009
Story: Emmanuel Adu-Gyamerah

THE Minister of Finance and Economic Planning, Dr Kwabena Duffuor, yesterday presented the 2010 Budget Statement and Economic Policy to usher in the government’s growth and strategy framework towards what he termed a “Better Ghana”.
The budget, captioned “Growth and Stability”, identified a comprehensive set of policies to support the government’s Medium Term Growth Strategy in a manner that would be sustainable.
“The theme for this year’s budget, ‘Growth and Stability’, epitomises the NDC government’s resolve to grow the Ghanaian economy in a sustainable manner to achieve a middle income status in an environment of stability and hope for the people of Ghana,” he explained.
It focuses on a progressive programme of development through job creation intended to improve on the quality of life of the citizenry.
In the nearly two-hour presentation, which was characterised by heckling by the Minority, Dr Duffuor, who appeared calm with occasional response to some of the reactions, outlined the tools for achieving the objectives of the Growth and Stability Budget.
They include sustenance of the macroeconomic stability and fiscal discipline achieved in 2009, positioning the country for a sustained growth through the modernisation of agriculture, provision of key infrastructural development, oil and gas projects, private sector development, ICT and delivery of social programmes targeted at poverty reduction.
Dr Duffuor added that monetary policy would continue to focus on stabilising price and exchange rate expectations, saying that the goal of the monetary policy was to reduce inflation rate to less than 10 per cent over the medium term.
The minister stated that with inflation and exchange rate stabilised at acceptable levels, and government deficit significantly reduced to stem borrowing from the domestic banking sector, interest rates of commercial banks would assume a downward trend to enhance the availability of credit to the private sector to support economic growth.
Dr Duffuor said that the structural reforms that were initiated this year would continue in 2010 in the medium term, explaining that these reforms were expected to strengthen fiscal management and support public sector transformation.
He said in the fiscal area, the focus would be on strengthening institutions, enhancing revenue mobilisation and improving expenditure management.
Turning to oil and gas and the country’s economic growth development, he said Ghanaians were gripped with the expected prosperity that the oil and gas finds would bring to the country opportunities that would accompany their exploitation.
He said the government was working to ensure the timely exploitation of the oil and gas to serve as a catalyst for accelerating growth of the manufacturing and other sectors, promoting diversification of the economy, creating massive jobs and stimulating private sector development.
Concerning the budget for the 2010 fiscal year, Dr Duffuor said the total revenue and grants were estimated at GH¢9.6 billion, equivalent to 37.1 per cent of the projected GDP for the year, which was an increase over the projected outturn of 2009.
Total domestic revenue is estimated at GH¢8.3 billion while grants would amount to GH¢1.4 billion.
Tax revenue is also expected to increase by 20.2 per cent over the 2009 estimates to GH¢6.1 billion, while non-tax revenue is expected to earn the country GH¢1.9 billion.
The total expenditure for the 2010 fiscal year is estimated at GH¢10.8 billion, representing 22.8 per cent increase over the projected overturn of 2009.
Dr Duffuor explained that wages and salaries for 2010 were estimated at GH¢3.1 billion, adding that the figure represented GH¢28.9 billion of the total expenditure for the 2010 fiscal year and 40.8 per cent of the total recurrent expenditure for the year.
He said government had agreed with organised labour to implement the Single Spine Pay Structure with effect from January, next year and assured labour that a government White Paper on the policy would soon be out.
He assured Ghanaians that the country’s foundation was much better than it was in 2008, adding that “what we now need is to gather courage, adopt a positive attitude and commit ourselves to moving forward in the right direction.
“We must realise that we have no other option than to collectively rise above our perceived inadequacies and stimulate our potential with renewed commitment and determination to move our economy up the ladder of prosperity,” he said.
After the presentation, the Minority members raised in unison papers bearing the inscriptions such as “Team B Budget” and “Sakawa Part 2”.
The Majority side responded with a chorus “Aba mu”, holding papers bearing the inscription “Growth and Stability, the Right Direction”.