{"id":606503,"date":"2019-04-09T23:40:46","date_gmt":"2019-04-09T23:40:46","guid":{"rendered":"
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Business News of Tuesday, 9 April 2019<\/p>\n

Source: <\/strong>Graphic.com.gh <\/p>\n2019-04-09\n\n

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<\/p>\n

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Business News of Tuesday, 9 April 2019<\/p>\n

Source: <\/strong>Graphic.com.gh <\/p>\n

2019-04-09<\/p>\n

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\"IsaacIsaac Adongo, Member of Parliament for Bolga Central<\/span><\/span><\/p>\n<\/div>\n

The Member of Parliament (MP) for Bolgatanga Central, Mr Isaac Adongo, has observed that Ghana\u2019s economy is suffering from a \u201ccrude and repulsive fiscal consolidation\u201d that is delaying the forward march of the country and pushing the economy to the brink of a fiscal crisis.<\/p>\n

He cited the consistent cutting of public spending to match low revenue outturns, reduction in capital expenditure in favour of consumption spending and strong appetite for debt as evidence of an economy being strangled in the name of fiscal consolidation.<\/p>\n

He, therefore, called for urgent and credible measures to help boost spending in productive sectors, increase revenue generation and halt excessive spending in goods and services to help stimulate growth and slow down spending on non-productive sectors.<\/p>\n

At a lecture on the economy organised by the Coalition For Restoration (CFR), the MP, who is also a member of Parliament\u2019s Finance Committee, said the government\u2019s current fiscal consolidation was artificial and unsustainable.<\/p>\n

The event, which was graced by a former President and Flag bearer of the National Democratic Congress (NDC), Mr John Dramani Mahama, and other bigwigs of the NDC, sought to give the party\u2019s version of the state of affairs on the economy.<\/p>\n

Mr Adongo and the NDC also used the event, which was on the theme: \u2018The State of the Ghanaian Economy: Myths and Truths\u2019, to respond to the Economic Management Team\u2019s Town Hall Meeting that was addressed by the Vice-President, Dr Mahamudu Bawumia, on April 3.<\/p>\n

Worrying trends<\/b><\/p>\n

\u201cThis is worrying because by continuously cutting spending to match the historic lag in revenues, the government is delaying the forward march of our dear country through artificial and unsustainable fiscal outcomes,\u201d Mr Adongo stated.<\/p>\n

According to him, a good fiscal strategy must centre on mobilising adequate tax and non-tax revenue to finance critical expenditures.<\/p>\n

This should be accompanied by investments in critical growth enhancing expenditures such as infrastructure, he said at the conference room of the Mensvic Hotel in Accra, which was filled to capacity.<\/p>\n

\u201cWe are not just living from hand to mouth but also borrowing excessively to pay for consumption expenditure,\u201d he said.<\/p>\n

Prioritising consumption expenditure<\/b><\/p>\n

The MP also pointed out that the focus of the government had been to prioritise consumption expenditure over spending on critically needed infrastructure.<\/p>\n

\u201cThis is why we are borrowing not to build schools, hospitals, provide potable water and build our roads but rather to pay salaries and goods and services.<\/p>\n

This is the new prioritisation and efficient public spending,\u201d he noted.<\/p>\n

Mr Adongo indicated that between 2017 and 2018, about 94 per cent of tax revenue went into servicing just two budget items: compensation of public sector workers and payment of interests on public debts.<\/p>\n

He said, compensation to public sector workers had ballooned from GH\u00a214 billion in 2016 to a projected GH\u00a222.8 billion in 2019.<\/p>\n

In nominal terms, he said, a whopping GH\u00a28.8 billion had been added to the Public Wage Bill.<\/p>\n

\u201cWhat the government does not know is that this reckless addition to the public service is crowding out about US$1.83 billion of fiscal space that could go into funding infrastructure,\u201d he added.<\/p>\n

Borrowing for goods and services<\/b><\/p>\n

Mr Adongo said the government had between 2017 and 2018 borrowed an amount of GH\u00a27.63 billion to pay for goods and services, with a projection to borrow a total of GH\u00a213.93 billion to pay for same by the end of 2019.<\/p>\n

Within the same period, he said a staggering GH\u00a216.43 billion had been borrowed to pay for consumption expenditure made up of workers\u2019 salaries, interest payment and goods and services.<\/p>\n

\u201cBy the end of 2019, the government would have borrowed an unholy amount of GH\u00a223.43 billion to pay for consumption expenditure. That is, we would have borrowed about US$5 billion to pay workers, interest on loans and goods and services,\u201d he explained.<\/p>\n

Reduction of capital expenditure<\/b><\/p>\n

Mr Adongo noted that the government had consistently reduced capital expenditure from 2017 to 2018, thereby reversing the gains made by the previous government to significantly address the huge infrastructural deficit of the country.<\/p>\n

\u201cIn 2016, capital expenditure stood at GH\u00a27.5 billion, representing 4.5 per cent of GDP. By 2018, this figure had been reduced significantly to a nominal of GH\u00a24.7 billion, representing 1.8 per cent of GDP. In actual fact, we are experiencing negative investment in infrastructure in real terms from the 2016 levels,\u201d he pointed out.<\/p>\n

\u201cThis is the fiscal situation of our dear country presently.<\/p>\n

Sadly, the government is not just stifling the potential of the economy through their wrong policy choices, they are saddling future governments with unsustainable debts that will create no opportunities for repayment streams of income,\u201d he added.<\/p>\n<\/div>\n

\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\u0642\u0627\u0644\u0628 \u0648\u0631\u062f\u067e\u0631\u0633<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Business News of Tuesday, 9 April 2019 Source: Graphic.com.gh 2019-04-09 Isaac Adongo, Member of Parliament for Bolga Central The Member of Parliament (MP) for Bolgatanga Central, Mr Isaac Adongo, has observed that Ghana\u2019s economy is suffering from a \u201ccrude and repulsive fiscal consolidation\u201d that is delaying the forward march of the country and pushing the […]<\/p>\n","protected":false},"author":1,"featured_media":605268,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-606503","post","type-post","status-publish","format-standard","has-post-thumbnail","category-local-news"],"yoast_head":"\nFiscal consolidation strangling economy \u2013 Isaac Adongo - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2019\/04\/09\/fiscal-consolidation-strangling-economy-isaac-adongo\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Fiscal consolidation strangling economy \u2013 Isaac Adongo - 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