The Minority New Patriotic Party (NPP) in Parliament has asked the National Democratic Congress (NDC) administration to present a new budget for the 2014 fiscal year because of the huge dislocation in the economy engendered by the depreciating cedi.
At a press briefing in Parliament yesterday, the Minority Spokesperson on Finance, Dr. Anthony Akoto-Osei, said the widening deficit caused by the “Usian Bolt” type of depreciation of the cedi against the major currencies had thrown all the government’s fiscal targets for 2014 out of gear and that a new budget based on the current happenings, would help restore some hope to the economy.
“As at the end of January 2014, the cedi had depreciated by 7.8 percent against the US Dollar as compared to 0.2 percent in the corresponding period in 2013,” he said, adding that Ghana’s economy is in real trouble with the way the Mahama government is managing the economic affairs of the country.
“Today, everybody is complaining about the rising cost of living, high unemployment, the total lack of confidence in our economy and the depreciating cedi which makes it clear that the government is bereft of workable ideas or solutions,” Dr. Akoto Osei told journalists.
He said the current fate of the cedi is not the working of any dwarfs, as being claimed by a top NDC functionary but as a result of “irresponsible spending” in the election year, including the huge over-expenditure coupled with high inflation.
He pointed out that the depreciation of the local currency is also attributable to other things like injection of an excess amount of cedis into the economy relative to production.
“We are now paying the price for huge amounts of money given to Woyome, Waterville, Isofoton and other so-called judgement debts as well as SADA, SUBAH and GYEEDA, “ he bemoaned.
He said the Bank of Ghana’s response to the current fate of the cedi could only be ad-hoc and a knee-jerk action, stressing that the bank must stop passing the buck and take full responsibility for the mess.
He noted that the problem was not merely a monetary puzzle for the Bank of Ghana to find antidote to, but it would need effective direction from the Ministry of Finance.
“We have to get our macro fundamentals back on track by reducing the huge deficit, lowering inflation and above all, avoid over-expenditure,” the Minority Spokesperson said, stressing that fiscal and monetary policy have to be prudently implemented to achieve those goals.
He indicated that reserves accumulation was not necessary unless there was something the Central Bank was refusing to tell the nation.
He said to help improve the situation, the government has to promote real investment in the economy, increase export base and produce goods that are locally consumed.