Budget targets not

Dec, 2010
Story: Emmanuel Adu-Gyamerah

THE Minority in Parliament has responded to the 2011 Financial Statement and Budget of the government which was presented to Parliament by the Minister of Finance and Economic Planning, Dr Kwabena Duffour, and indicated that almost all the targets for 2009 and 2010 were not achieved.
The Minority Spokesperson on Finance, Dr Anthony Akoto Osei, who opened the debate on the budget on Wednesday, stated that “I am afraid that the performance of the economy for 2010 has been worse than anticipated.”
Supporting his argument with statistics, he stated that in 2010, the targeted real Gross Domestic Product growth of 6.5 per cent was missed, with the government obtaining 5.9??? per cent.
“Mr Speaker, on the basis of statistics, we are tempted to emulate Steve Mallory of Africa Watch Magazine to give Grade F to the economic managers of the economy,” he said, explaining that given the positive external economic developments, with respect to gold and cocoa prices, what was required was complementary domestic policies to assure targets set were achieved.
Dr Osei said since the targets were not achieved, it would stand to reason that the domestic policies pursued worked to overweigh the positive impact of the external development.
He contended that the new arrears of some GH¢3.2 billion for 2010 indicated that on a commitment basis deficit exceeded 23 per cent of the GDP and could be as high as 26 per cent.
Dr Osei wondered how economists would characterise an economy with a deficit of over 23 per cent of GDP and stock of arrears of GH¢4.6 billion.
He said with the government not paying its bills, it was not surprising that it could boast of accumulating Gross International Reserves of about $3.9 billion, adding that over 60 per cent of the gross reserves were on the back of debt owed to workers and contractors.
Dr Osei said after moving from a HIPC country under the NPP administration, Ghana was slowly heading back to a HIPC country.
Contributing to the debate, the Majority Spokesperson on Finance, Mr James Klutse Avedzi, debunked the assertion of the Minority and said that under the NDC two-year administration, a lot had been achieved.
He said the NDC had been able to put the economy on the right footing resulting in the reduction of inflation from 18.9 to 9.3 per cent.
He said even though GDP growth across the sub-Saharan Africa was an average of two per cent, Ghana’s achievement of 4.9??? per cent was good.
Mr Avedzi said under the NDC government, the budget deficit had been reduced from the 14.9 per cent it inherited to 8.8 per cent while three out of the four criteria required by the West African Monetary Zone had been achieved.
He said the government had to build on the stabilised economy and achieved the 12.3 targeted growth for 2011.
Mr Avedzi defended the tax elements as contained in the 2011 budget and stated that it was not proper for any country to depend on grants and loans without raising taxes internally.
For his part, the Member of Parliament for Sunyani West and Deputy Minority Spokesperson on Finance, Mr Ignatius Baffour-Awuah, said with less than two years, the NDC had moved the country’s debts from $8.5 billion to $11.5 billion besides the STX deal.
He criticised the government for the numerous taxes it had introduced in the 2011 budget and said that that would not augur well, especially for the tourism sector.
The Majority Spokesperson on Energy and Mines, Mr Moses Asaga, said the government had been able to put in a lot of measure to ensure the smooth running of the oil and gas sector contrary to speculation that the NDC would not be able to handle the sector.
Meanwhile, the House, on Wednesday, paid glowing tribute to farmers in the country for their efforts to ensure economic growth.
The MPs were contributing to a statement made by the Chairman of the Parliamentary Select Committee on Food, Agriculture and Cocoa Affairs, Dr Alhassan Ahmed Yakubu, on the upcoming Farmers’ Day celebration.
In the statement, Dr Yakubu noted that despite efforts by the government, there was still more to be done for Ghanaian farmers.
He enumerated them to include the provision of rural infrastructure, delivery of appropriate production technologies and the attainment of a proactive agricultural governance system.
“All these require more investment in the Ministry of Food and Agriculture’s Medium Term Agriculture Sector Investment Plan,” he said.