Finance Minister, Ken Ofori-Atta has said Ghana will soon become an entrepreneurial nation with what he called “a great army of curious, competent and compassionate actors empowered to conquer opportunities at home and abroad.”
He said Akufo-Addo-led NPP administration is driving a new age of entrepreneurship, job creation and wealth building.
Presenting the Budget Statement and Economic Policy of the Government for the 2022 financial year in Parliament yesterday, Mr. Ofori-Atta said the government has “revamped the economy, enhanced social mobility, and strengthened the nation’s democratic credentials, with the financial sector and its ecosystem repositioned with significant depth and scope to extend the needed support to businesses.”
Rich Tapestry
“This rich tapestry of coordinated support is meant to ignite and unleash the innovative and entrepreneurial spirit of young people in the country. It is to mark a conscious departure from job seeking towards job creation and job ownership,” he said.
“We are nurturing a self-confident and business savvy generation which leverages the AfCFTA for economic transformation,” he said, adding “with the anticipated multiplier effect of ‘YouStart’, we will become an entrepreneurial nation with a great army of curious, competent and compassionate actors empowered to conquer opportunities at home and beyond,” the Finance Minister emphasised.
YouStart
“Mr. Speaker, YouStart will support youth-led enterprises with District Level Loans under GH¢10,000 after 2-3 months of training, Soft loans of up to GH¢50,000 to help start-ups (in particular by young graduates and school leavers) and small businesses to expand.
He said there will also be Starter packs (Soft loans tied to equipment acquisition) of up to GH¢50,000 for individuals and GH¢100,000 for associations/groups as well as a standardised loan package of between GH¢100,000 to GH¢400,000 at concessional rates for SMEs through financial institutions.
“Mr. Speaker, the YouStart initiative aims to support our youth to develop commercially viable businesses. To this end, YouStart is designed to instill proper commercial orientation in the beneficiaries. This will include financial institutions determining the credit metrics and GEA and NEIP providing training support, especially for the standardised SME loans. YouStart will be operational by March 2022.”
NAELP Intervention
Mr. Ofori-Atta said in 2022 the government would also support other targeted and youth employment focused interventions such as the Community Improvement Initiative and the National Alternative Employment and Livelihood Programme (NAELP), which was launched by the President on October 25, 2021.
“Through the NAELP, we will protect the environment and our water bodies from illegal mining activities by Building a Sustainable Entrepreneurial Nation: Fiscal Consolidation and Job Creation,” he pointed out, and added that there would be alternatives such as support and skills training for small-scale illegal miners and other people affected by illegal mining.
He said the programme would help conserve the country’s natural environment now and for future generations, noting that it would also support efforts to leverage the natural environment as an asset to access climate finance for programmes at both the local and central levels of government.
“Through our programmes to revitalise the economy, we will prioritise and finance innovations that optimise our climate advantage and drive our adoption of renewable energy technologies,” he asserted.
The minister stated that the 2022 budget is also about changing mindsets in order to consolidate gains made, boost revenue mobilisation, and keep Ghana on the cutting edge of digital advancement, besides building an entrepreneurial nation.
“Towards that effort, the theme for this budget is Building a Sustainable Entrepreneurial Nation: Fiscal Consolidation and Job Creation,” he disclosed.
Budget Focus
According to him, a key focus of the 2022 budget is fiscal consolidation to enhance debt and fiscal sustainability as the government continues to implement the economic revitalisation and transformation programme post COVID-19 to save more lives from the COVID-19 pandemic and better the lives of Ghanaians.
“It is for this reason that the Government is proposing for the consideration and approval of Parliament the revenue enhancing and expenditure rationalisation measures in this budget,” he stated.
He said that the approval and implementation of the measures will lead to significant fiscal adjustment from a projected fiscal deficit (including Energy IPP Payments and Financial sector clean-up cost) of 12.1% of GDP in 2021 to 7.4% in 2022, representing an adjustment of 4.7% points in just one year.
The Finance Minister said the government is not only significantly bringing the fiscal deficit down, but was also posting a primary surplus of 0.1% of GDP in 2022 from a negative primary balance of 4.7% in 2021.
Economic Growth
Mr. Ofori-Atta said the COVID-19 pandemic with its associated health and economic risks, fuelled by the new Delta variant, continued to weaken the global recovery momentum.
He revealed that information from the World Odometer COVID-19 Dashboard indicated that the global death toll from the pandemic has surpassed 5 million – specifically 5,126,659 as at 17:42 GMT, November 16, 2021.
“Mr. Speaker, data from the IMF’s October 2021 World Economic Outlook (WEO) indicate that the global economy is estimated to grow at 5.9 per cent in 2021.
“Although this is a 0.1% point lower compared to the July 2021 WEO update, it is still a significant improvement over the 3.1% contraction recorded in 2020,” he posited.
Side Attraction
The budget presentation, which attracted majority of the MPs into the Chamber, suffered some delay due to a pre-sitting meeting between the Speaker and the leaderships of the House.
Speaker Alban Bagbin explained the delay and said “clearly, I am sure many of you were a bit worried about the delay and you are right to do so,” adding “it’s because the leadership of the House together with my good self, have grave differences with the Ministry of Finance. And so we had to discuss those issues and I want to assure you your leadership is on top of these matters.”
He continued that “the representation we have done today and as we go along, we believe that there will be enough time for the differences to be ironed out smoothly for the interest of everybody in this country.”
By Ernest Kofi Adu, Parliament House