Economy On ‘Auto Pilot’

Dr. Kwabena Duffuor, Finance Minister and Ecomonic Planning

Ghana’s economy has been described as being on ‘Auto Pilot,’ which means that it has been moving by itself and not through the prudent management by government.

Speaking to journalists immediately after Finance Minister, Dr. Kwabena Duffuor delivered the 2011 Supplementary Budget Estimates and the 2011 Mid-Year Review of the Budget Statement, Professor George Yaw Gyan-Baffour, the Member of Parliament (MP) for Wenchi, argued that with the abundant external resources available to government to execute its projects a proper management of the economy should have resulted in a better economic growth than the country currently experiences.

“The economy as it stands now is just on a free flow. It is not being managed by anybody,” the former deputy Minister of Finance and Economic Planning indicated.

“Look at the external market, the external revenue, cocoa price is going up, gold price is going up, and oil price is not as high as it should be or even if it should go up we also benefit from it because we are exporting. All these should bring this economy to top speed but when you look at what is happening out there even though there are a lot of resources or room to maneuver, this economy is where it is. It means there is something wrong with it,” Prof. Gyan-Baffour pointed out.

He noted that government’s economic management team was not doing well as it is being propagated, noting that sectors of the economic including the agriculture are experiencing a decline in growth.

The ruling National Democratic Congress (NDC), Prof. Gyan-Baffour observed, has been the luckiest in the history of the country because the Mills administration is enjoying favourable levels of cocoa and gold prices.

He could not fathom why government was struggling to pay salaries and wages, saying the funds were going into the wrong channels.

“If you cannot manage this country very well, there is a problem. Parliamentarians were even paid just last week. Roads and infrastructure are at a standstill. What I suspect is that monies are going into wrong hands,” he claimed.

Presenting the 2011 Mid-Year Review of the Budget Statement, Dr. Duffuor said developments in the first five months of 2011 point to an optimistic outlook for the rest of the year.

“Going forward we are determined to strictly enforce the budget plans for the rest of the year in spite of the fiscal challenges, resulting from both domestic and external developments.”

Based on the trends for the first five months of 2011, the minister noted that government will exceed its revenue targets as steps have been taken to address the problem of expenditure arrears which will help in strengthening bank’s balance sheets.

However, market watchers are critical of the level of borrowing, which stood at about GH¢21 billion as at the end of May 2011 and the budget deficit, which a revise estimates put at 5.1 percent of Gross Domestic Product.

Government is seeking an approval for a supplementary appropriation of GH¢1,463,123,559 or GH¢1.463 billion for the rest of the year.

Dr. Duffuor added that since the last quarter of 2010 the “Better Ghana” agenda of government has been on course, saying the evidence includes sustained macroeconomic stability, high economic growth, on-going infrastructure development and on-going social intervention programmes.

Some revisions in the macroeconomic targets for the 2011 budget were a real GDP growth of 7.5 percent (excluding oil) and 14.4 percent including oil, an average inflation of between 8.7 and 8.8 percent and gross international reserves of less than three months.

The 2011 Budget Statement and Economic Policy document was based on actual data for the first three quarters of 2010 and a projected estimate for the last quarter.

By Charles Nixon Yeboah & Awudu Mahama