The Minister for Finance and Economic Planning, Dr. Kwabena Duffour has unveiled the 2012 budget and economic policy of the Atta Mills-led administration.
The budget statement dubbed, “Infrastructure Development for Accelerated Growth and Job Creation”, according to minister is one of the best in the face of an election year to bring high hopes to the jobless.
Presenting the budget statement and Economic Policy of government in Parliament House Dr. Duffour said there has been a significant growth in real GDP from 4.0 per cent in 2009, to 7.7 per cent in 2010 and 13.6 per cent in 2011 on provisional basis, making Ghana one of the fastest growing economies in the world in 2011.
He indicated that in pursuit of the social democratic principles of the NDC Government, the 2012 budget will continue the implementation of a number of pro-poor intervention programmes that will provide equal opportunities and improvement in the well-being of the people.
Dr Duffour stated that due to the hard work of cocoa farmers and other stakeholders, Ghana has now attained the 1.0 million metric tonnes of cocoa production for the first time in our history ahead of the 2012 schedule.
He noted that significant progress has been made in improving the well-being of the vulnerable through social intervention such as removal of Schools under Trees, provision of free uniforms and textbooks, up-scaling of the school feeding programme and the Local Enterprises and Skills Development Programme (LESDEP).
The Minister disclosed that key infrastructural projects to be implemented in 2012 consistent with the Ghana Shared Growth and Development Agenda (GSGDA) will focus on areas including Electricity, Oil and Gas, Water and Sanitation; Railways, Roads, and Ports; and Health, Education, and Agriculture.
Dr Duffour said in order to accelerate the achievement of universal health coverage, Government will commence the implementation of the one-time premium payment policy under the National Health Insurance Scheme (NHIS).
According to him, the Ghana National Petroleum Corporation (GNPC) has, on behalf of Government, lifted oil from the FPSO Kwame Nkrumah four times as at the end of October 2011, adding that the proceeds from the first three liftings have been received while that of the fourth one is expected later in the year.
He revealed that the total volume of crude oil from the first three liftings amounted to 2,980,720 barrels which realized a total sum of US$337.3 million (GH¢ 506.0 million).
Dr Duffour said the public sector wage bill constitutes the largest single expenditure item in the budget and as a result the implementation of the Single Spine Pay Policy (SSPP) has resulted in as much as 41.2 per cent of total revenue being used to pay wages and salaries to public sector workers.
He assured that government will also continue to implement policies that would substantially improve payroll administration through audits and the cleaning of the payroll to eliminate waste and excesses.
Touching on election 2012, Dr Duffour hinted that Government will adequately resource the EC to conduct free, fair and transparent elections to the satisfaction of all stakeholders.
He said fiscal policy in 2012 will focus on strengthening revenue mobilization through further reforms in tax administration, managing the wage bill and implications of the implementation of the Single Spine Pay Policy; and controlling other recurrent expenditures.
Dr Duffour said government will develop a local content policy for the whole economy to significantly enhance the level of participation of Ghanaians in the national economy.
The IMF world economic outlook fact sheet on Ghana indicates that the current government from 2009-2011 has spent GHC 32.6b. Whilst we are not against spending prudently, we are against profligate expenditure that benefits only a few. The question therefore is what has Ghana got to show for the 32.6b the government has spent in three years? The record we have, so far show a sod cutting for STX, sod cutting for Volta and Brong Ahafo Universities, a capote action year where the Kotokraba market was to be built, the cape coast stadium was to be built, a collapsed NHIS, collapsed maternal care, metro mass, gas shortages, water shortages, increased road accidents as a result of bad roads, labour unrest everywhere.
It is estimated that at the current rate of spending and borrowing by 2013, Ghana will have been fully back to HIPC. Indeed the recent Standards & Poor downgrading of Ghana to B and the associated reasons given for such a downgrade; the warnings of the Institute of Economic Affairs (IEA) and the Institute of Statistical, Social and Economic Research (ISSER) that Ghana is heading back to HIPC should be well noted. A government that has borrowed $14b in three years and spent GHC32.6B yet has nothing really to show for it, should seriously look at its fiscal spending.
The constant reference by the government to various macroeconomic indicators as signs of growth is not helping the citizenry in anyway!
Any measure that reduces the cost of doing business is welcome, and in that regard the 2012 budget is a bold step towards addressing some of the challenges of industry. Obviously, incentives in the budget statement are not far-reaching enough for the manufacturing and agricultural sectors to bring about meaningful growth. These two are the anchor sectors for our sustained economic growth and for job-creation; therefore we expect substantial budgetary support for these sectors in the form of incentives. Industry is projected to grow sharply, by 36.2 percent for 2011, riding on the back of the nascent oil economy; but manufacturing is expected to register just 1.7 percent growth compared to 2010 growth of 7.6 percent.
The agricultural sector this year is also expected to record one of its lowest growth rates since the 1980s at 2.8 percent, a sharp dip from the 2010 rate of 5.3 percent.
While agriculture has registered consistent declining growth rates since the 2008 high of 7.4 percent, manufacturing has had a checquered growth — 1.2percent in 2007 and up 3.7 percent in 2008, only to register another negative growth of -1.3 percent in 2009. With the declining fortunes of these two critical sectors, an expectation of the business community was for major interventions to help arrest such poor performances. The sharp growth rate of industry is rather deceptive, giving the erroneous impression Ghanaian businesses are doing well. The boost in growth is coming from the oil sector, where the upstream operations responsible for the high growth are controlled by foreign oil companies. Ghanaian companies are largely not benefitting from it yet. For Ghanaian businesses, which are mostly small and medium-sized enterprises, a turnaround in their fortunes can only be registered if government seriously implements the new industrial policy.
The industrial policy, launched earlier in the year, aims at transforming the country over the next five years into a leading agro-industrial economy in Africa. We are of the firm conviction that in terms of producing the desired outcome of accelerating industrial development, this new policy has a tremendous chance of success. You may freely download highlight of Ghana’s 2012 budget on the box.net widget. Kindly say “Thanks” when you done! :))