There is nothing to talk about this week except Montie and the supplementary budget presented to parliament on Monday 25th July. So unfortunately, I cannot write again about the economic Ananse Sem we have been fed these past seven years, except if I concoct something more weird. When the NDC leaves government in December, we will have turned a major leaf of poverty, which we “home grew” systematically, while consistently pushing lies through the IMF’s cardinal mistake of acquiescing to the home grown designer label attached to their many “Ananse reports” provided to them by a government bent on staying in power by any means possible. We wait to see if the people of Ghana will recount the votes or accept a change in leadership on first ballot and save us the insanity of another eight years of “Tom Thievery”.
For eight years this government has managed a planned and consistent spiral of decreasing wealth, making us poorer in the today while promising that swallowing a bitter austerity pill today will create a future gain and mirage income status for tomorrow as we spiral into an uncontrollable future poor.
This year’s supplementary budget for additional spending of GH¢1.88billion was presented in its usual aplomb and pageantry as befits a country that thinks it is heading someplace, except ours is in a tailspin to future nothing. The finance minister, with the opposition at its heckling best, spun the web of opening statements, seemingly more conscious of the grandiose protocol than with the content of what he would say for the rest of the two hours.
Read his opening salvo and ask yourself if this jives with what you know about the Ghana you live in today.
“Mr. Speaker, I beg to move that this Honorable House approves the sum of one billion, eight hundred and eighty-eight million, two hundred and three thousand, and three hundred and eighty-seven Ghana Cedis (GH¢1,888,203,387) as Supplementary Estimates for the 2016 Financial Year.
Mr. Speaker, in doing so, I would proceed by first presenting to this August House, a review of the performance of the economy of Ghana for the 2015 and 2016 Financial Year.
Right Honourable Speaker and Honourable Members of Parliament, on the authority of the President, His Excellency John Dramani Mahama, the positive review and, in particular, the need for Supplementary Estimates are necessitated by both domestic and global developments.
Mr. Speaker, again on behalf of the President, I wish to express our profound appreciation to this August House for your cooperation in the management of the economy. In particular, we wish to show appreciation for the House’s pursuit of a very active legislative agenda in the areas of fiscal, financial and monetary management.
No doubt, this has contributed to a very clear “turnaround story” that now shines the nation’s path to a well-planned bright positive prospects for the economy. Despite a few lingering problems, we will demonstrate in this Statement that the context today is clearly different from the “challenges” that made H.E. President Mahama call on fellow citizens to change course from an unsustainable path— when I presented my first Budget on His Excellency’s authority to you in March 2013.
The specific aims of this review and Supplementary Estimates are to:
- brief Honourable Members on the performance of the economy during the first five months of 2016;
- update the House on the macroeconomic performance as well as the Budget Estimates for the 2016 Fiscal Year;
- request the House to approve Supplementary Estimates for 2016 Fiscal Year; and · report on progress of major Initiatives and programs being implemented in various sectors of the economy.
Mr. Speaker, the update will highlight the overall positive impact of the President’s policies. It will show that several daunting domestic and international challenges did not hinder our determination to change course. More importantly, the strategic focus enabled us to pursue the very active infrastructure and development programs that the President himself has been presenting in his “Accounting to the People” visits. This is also the basis for the “turnaround” and the course for pursuing a very robust growth agenda for the near-to-medium term.
The launch of our “Home Grown” policies, which are now part of the IMF Program, were designed to achieve fiscal consolidation; address short-term vulnerabilities; reduce a high budget deficit that had become harmful to the private sector; as well as stabilize and reverse the rise in the post-HIPC public debt. Mr. Speaker, we are on course to achieving these goals through management of prudent fiscal, financial, sectoral, and monetary policies.
Provisional fiscal data up to end-December 2015 show that total revenue and grants were higher than the Budget targets by 5 percent. The overrun in total expenditures, including arrears, narrowed to 2.1 percent above target. These performances resulted in a cash budget deficit of 6.3 percent of GDP, much better than the Budget target of 7.3 percent and 10.2 percent in 2014.
Indeed, at 0.2 percent of GDP at the end of 2015, the primary budget balance—that shows our ability to service loans for development—was a surplus for the first time in over a decade.
GDP also grew by 3.9 percent at end-2015, better than the projected 3.5 percent. It is getting better, with the economy growing by 4.9 percent in the first quarter of 2016, compared to 4.5 percent for the same period in 2015. In spite of unanticipated shortfalls in price and production of crude oil, GDP growth is projected to end the year at 4.1 percent or better.
The nation’s public debt level rose rapidly from a very low 26 percent in 2006—with the steepest post-HIPC increase of 31 percent in 2007—to approximately 72 percent by end-2015. We note that HIPC reduced the public debt from over 150 percent of GDP to 26 percent and created significant borrowing space. That era ended with the increase in public debt above sustainable levels.
We are proud to note that, for the first time since the declaration of HIPC in 2001 we were able to first, slow down the rate of growth of debt accumulation between 2014 and 2015; and, second, now reverse course, with the debt-to-GDP ratio falling from 72 percent of GDP at end-2015 to 63 percent at end-May 2016. Certainly, this is not the trajectory that will take the nation back to HIPC, as some had predicted only recently. We will persevere in bringing down the level of our public debt.
Mr. Speaker, the budget deficit is also narrowing, as we raise more domestic revenues and curtail expenditure overruns. Though the debt level is declining, we are able to continue the rapid expansion of infrastructure through prudent project management. The currency has been fairly stable; and private sector confidence is bouncing back. All these point to a turnaround and very bright prospects for the economy. As promised when we launched the Home Grown policies, the trend provides us with the opportunity to remove the temporary taxes—the Fiscal Stabilization Levy and the Temporary Import Duty—that helped reverse course, in the near term”. Etc., etc.
And after all the stories, Ananse looked up at the crowd and with a self-congratulatory smile, asked the House, “am I not smart?”
So what about the “montie3”?
How does the NDC justify its “home grown” policy to threaten Justices of the Peace and does the party really expect President Mahama to grant a pardon? It can only mean one thing if he does. Our President will be telling us that any threat to assassinate him will be met with a Presidential pardon for the very same criminals who he will free to come attempt to, this time, really kill him. Doesn’t make any sense to me.
Ghana, Aha a y? din papa. Alius atrox week advenio. Another terrible week to come!
Sydney Casely-Hayford, sydney@bizghana.com