By Frederick ASIAMAH
The Akufo-Addo administration’s second budget statement will do little harm to the health of the economy except for its apparent over-ambitious revenue target setting. This is a point on which many economists and socio-economic commentators agree.
At least, gleaning the budget speech read in Parliament on Wednesday by Ken Ofori-Atta, Minister for Finance, it appears that government prioritises the key concerns of the populace – jobs, stability in the prices of goods and services and ease of access to credit for entrepreneurs.
It does not appear from the reviews rendered so far by economists and experts that much more could have been done by government other than prioritising these areas.
It makes sense to think that people would be better off with stable prices than price hikes.
With productive sectors still struggling to run the show for Ghana’s economy – and sectors like agriculture only appearing to be recovering – taming inflation, overspending by government and outmuscling of private sector by government in terms of accessing domestic market credit seem sensible.
Besides, this is a budget that appears to remain realistic by not granting a wave of incentives as it was in the case of the 2017 budget; recognising that revenue targets being missed meant that expenditures had to be curtailed by well in excess of GHC2bn of budgeted expenditure.
Jobs
According to Mr. Ofori-Atta, government prioritises jobs. In this regard, government seems to be keen on expanding public sector employment by engaging a number of graduates. One of the initiatives through which government will be providing jobs is the “Nation Builders Corps program.”
The programme, the minster indicated, “will hire 100,000 graduates in 2018 to be posted to various districts across the country. On average, under this program every district should be able to provide jobs for 462 graduates.”
On a bigger scale, the “Akufo-Addo Program for Economic Transformation (AAPET)” is expected to facilitate the creation of thousands of jobs.
The AAPET “is a three-pronged economic development programme that will accelerate investments in Agriculture, Strategic Infrastructure and Industrialization.
“Under the program, we will modernize agriculture, improve production efficiency, achieve food security, and increase profitability for our farmers. The plan is to invest in the entire agricultural and agribusiness value chain, which will create new businesses and job opportunities in the sector,” Mr. Ofori-Atta disclosed.
Stability
The Finance Minister indicated that “The President is determined to reverse the trend of the last few years where businesses operated merely and mainly to service loans, pay taxes and electricity bills. In line with this, for 2018, we will continue to stabilize the economy, offer reliefs, including reducing electricity tariffs to make the private sector truly competitive and create more employment.”
Relating to this, the Minister outlined proposals to reduce electricity tariffs by 13 per cent for residential customers and up to 21 per cent for industry.
This is particularly key, bearing in mind that electricity supply challenges, for a number of years, had grave impact on businesses, including leading to shutdowns and workers layoff.
Thus, government’s indication of cutting its budget deficit to 4.5 per cent of GDP in 2018 from a revised 6.3 per cent as well as keeping inflation in check at a projected 8.9 per cent compared to 11.2 per cent previously, will be important for doing profitable business and helping workers keep their jobs.
Easing access to credit
The Finance Minister gave the indication that “A strong and efficient financial sector is fundamental to realising “Ghana Beyond Aid”. This requires innovative and long term financing instruments to support economic development for higher productivity, jobs and inclusive growth.
This is why Government will design the requisite financial architecture that is capable of mobilizing resources.
In this regard, the proposal is to launch a national development bank, with the capacity to mobilize private capital towards agricultural and industrial transformation, among others.
It is equally important that government will restructure the Ghana Infrastructure Investment Fund (GIIF) with the capability to mobilise foreign private capital for critical infrastructure development using a private sector model.
It is good that government notes that access to long-term funds by the private sector is not sufficient to drive accelerated economic growth of the country.
“To address this challenge, Government will strengthen the pensions, insurance and securities industries, which are the key agents of providing long term capital for the economy,” said Mr Ofori-Atta.
