Finance minister reading out the Budget statement
The New Patriotic Party (NPP) administration under the leadership of President Akufo-Addo has emphasised that it will shift the focus of economic management from taxation as practised by the former National Democratic Congress (NDC) administration to production to help reduce the cost of doing business and create a conducive climate for investment and job creation.
It also said it will reverse the recent low growth trend by boosting agriculture and industrial productivity, while pursuing an effective debt management strategy to ensure debt sustainability.
Finance Minister Ken Ofori-Atta, who disclosed this in his maiden Budget Statement and Economic Policy in Parliament yesterday in Accra, said government will further adopt global standards of risk and treasury management to ensure accountability in the use of state resources and work to reduce the amount of government borrowing, which has crowded out the private sector.
“We are committed to continue with the Extended Credit Facility (ECF) programme with the IMF. We will, however, review some of the targets and structural reform benchmarks to accommodate our priorities of tax reliefs and other positive measures to boost the private sector.”
Cut in borrowing
He cited as an example the 2016 budget statement which revealed that an entire allocation for the Ministries of Roads and Highways, Trade and Industry, Food and Agriculture, Water Resources, Works and Housing, Youth and Sports and Ministry of Transport amounted to a total of GHC2.2 billion.
“Interest payments in 2016 (GHC10.8billion) would be nearly five times what was allocated to the six key ministries combined. This is how pernicious our debt stranglehold is. We cannot borrow our way out of these challenges. This will be tantamount to creating and sharing poverty, which only leads to a loss of our fiscal sovereignty.”
Other government priorities
The minister also announced the establishment of the Infrastructure for Poverty Eradication Project (IPEP).
“Under this project, every constituency will be allocated the cedi equivalent of $1 million to combat poverty and improve the lives of rural dwellers and deprived communities; implementation of the “one district one factory” programme; establish of the Zongo Development Fund to support; provide critical infrastructure and services; roll out of the National Identification Scheme to facilitate the efficient delivery of public and private services and help formalize the economy; roll-out free SHS to ensure equal opportunities for all and enhance human capital for the country; roll-out of a national digital addressing system to provide unique addresses for all properties in Ghana; and restoration of teachers and nurses training allowances.”
Medium term priorities
Over the medium term, he said government intends to build the most business-friendly and industrialized economy in Africa, capable of creating decent jobs and prosperity for all Ghanaians, modernize agriculture, improve production efficiency, achieve food security, and profitability for farmers with special emphasis on value-addition.
Also, he said it will develop leadership skills, quality education; entrepreneurship, job skills and creative skills; and ensure a functioning social protection system, which addressed the needs of the weak, marginalized, vulnerable and socially excluded, among others.
For this year, government is aiming at achieving overall real GDP growth of 6.3 percent; non-oil real GDP growth of 4.6 percent; 25 end-year inflation of 11.2 percent; average inflation of 12.4 percent; overall fiscal deficit of 6.5 percent of GDP; primary surplus of 0.4 percent of GDP; and Gross Foreign Assets to cover at least three months of imports of goods and services.
By Samuel Boadi