Former Deputy Finance minister Mona Quartey has predicted the Akufo-Addo government will backtrack on its economic expectations when it realises that its 2017 budget presented last Thursday is not realistic.
She said government is not facing economic reality because it wants to do more with less.
For her, it is unrealistic to plan to roll out expensive programmes and projects and at the same time cut taxes.
She doubts that if government persists in the path stated in the budget, it will be able to meet its 2017 fiscal deficit target of 6.5% of GDP.
In the highly anticipated budget read yesterday in parliament, government's macroeconomic targets for 2017 include an overall GDP growth rate of 6.3% including oil and a non--oil GDP growth rate of 4.6%
The end-year inflation rate target is 11.2% and a much-dreaded fiscal deficit has been set at 6.5% of GDP.
The fiscal deficit, in particular, is seen as Ghana's biggest threat to macroeconomic stability and growth. The NDC government, despite setting a target of 5.3 percent of GDP, ended its tenure with the deficit at 10.3 percent of GDP on a commitment basis.
The deficit widens when government spends more than it collects, a regular pattern as this occurred again in 2016.
With a debt of GHC122m hanging over the economy, government over the past few years has prioritised paying its debts. In 2015, government gave five ministries 2bn but paid 12bn in debt-servicing.
Government is further constrained by the fact that all its revenue from taxes is spent on only three recurring expenditure items- wages, statutory funds and debt servicing. It has ended up with only 0.4% of total revenue after allocating 99.6% of taxes on these expenditures.
If government must do anything else, it must borrow or look for foreign aid, it has acknowledged.
But describing his first budget as 'Asempa' [Good news] budget, the Finance minister Ken Ofori-Atta stressed that the Akufo-Addo government won't be fixated on taxing the economy to raise revenue. Themed “Sowing the seeds for Growth and Jobs”, Ken Ofori-Atta said government will shift economic management from taxation to production and proceeded to announce the abolishing and reviewing of at least 12 taxes and levies described as 'nuisance taxes'.
The removal on import duty on spare parts in particularly, sparked wide approval.
Discussing the budget on Joy FM Friday, Mona Quartey said she found the easing of taxes on spare parts 'surprising'.
This is because it will signify an appreciable loss in revenue coupled with further revenue losses from expected low commodity prices for Ghana's cash crops and exports.
She is worried that government is not likely to meet its total revenue and grants target of GH¢44,961.6 million which is a 33.5% increase over what the NDC government raised in 2016.
Government, she said, will soon discover that abolishing and reviewing taxes is a 'self-defeating' move because it will lead to revenue shortfalls. Revenue is needed to close the deficit and also implement seven social programs outlined in the budget. Government intends to allocate $1million to each of the 275 constituencies in a programme described as Infrastructure for Poverty Eradication.
There is also an ambitious industrialisation plan of setting up a factory in each of the 260 districts which is allocated GH¢456.3 million. There is also a plan to alleviate poverty in Muslim-dominated areas through a GH¢219 million Zongo Development Fund.
Government will also roll out a flagship education policy known as the free Senior High School programme. An irrigation policy known as one-village, one dam will get GH¢94 million. Government also wants to restore teachers and nursing trainee allowance scrapped by the NDC government.
But Mona Quartey argued that the failure of government to give details on how it intends to fund some seven programmes shows the budget is 'shallow' and 'hollow'. Government also failed to show "exactly what they [are] going to do to be able to control expenditure", she said.
Government plans to spend GH¢58,137.4 million which is a 13.7 percent increase over the NDC's expenditure for 2016. She predicted that government will soon face a reality check by June when it realises that economic figures and its expectations do not match.
She said government is more likely to begin backtracking on its plans and may come back to parliament to review its figures in the mid-year budget review.
Source: Joy News
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aaahhhh Ghana people, partisan is killing this nation ooo, we should be very careful of our decisions today oo. hmmmmm. Our children and their children will curse us if we mess up this beautify nation that God has given us.Those of you insulting the woman have you schooled more than her,or has anyone in your family risen higher in life than her,you have to understand the point she was speaking from.This our politicains are messing up our economy because the masses of the citizen want food and meat now and are not willing to sacrifice a little for the future generation.Do you think Amerca and other developed countries attained that level by just wishing and disunity.Their great and grand fathers sacrificed for their future,and if we want to attained that level then we have to sacrifice now.And we should unit and bash our leaders to deliver.We shouldn't do this to only one political party but to all political parties whom we gave power to manage the affairs of our beloved nation. They always enjoy with the families and croonies and leave us to suffer but we kept supporting them wrongly because of tribalism,religion,business association,ETC. God judgement will come to anyone who do not want Ghana to grow because of their selfish motives. GOD BLESS GHANA AND MAKE IT STRONG.
Where did your deep budget lead us?Please stop talking before Ghanaians lose their temper
GHANA INDEED HAD SMALL MINDS AND SIMPLY PUT UNDOABLE MINISTERS WITH AN INCOMPETENT AND UNKNOWLEDGEABLE LEADER IN MAHAMA. IF HIS MINISTERS THINK THIS WAY THEN I WONDER HOW THEY ACHIEVED THE NUMEROUS CERTIFICATES THEY ARE TOUTING ABOUT. AH MAHAMA PAA? GABAGE IS WHAT YOU VISITED ON US BY APPOINTING PEOPLE LIKE THIS TO RUN THE ECONOMY.
@Black Banana I thought I was the only woman who knew that she was a bank teller in Maryland. She is clueless and lobbied hard for that deputy minister post after she served on the board of Merchant bank and ruined it. I am surprised that Mona Caesar as I know her has found a voice to criticize Ken Ofori Atta. She knows that she is nor Ken's "co-equal". Who said Tweaaaaaaaaaaa!!
How a mere bank teller in local Maryland Bank could ever become a deputy Finance Minister continues to baffle me.
What at all is it with these NDC people. You create a monstrous situation with everything ,the Energy sector,the Banking sector education ,transport and you deride others for trying to resolve things. Under Mahama everybody, everywhere in Ghana was st3al1ng; so the national kitty was like a basket into which water was being constantly poured.The NDC has demonstrated beyond everything that they hate Ghanaians and I entreat every Ghanaian to work hard so that these misfits WILL NEVER have power again.Right now all they are doing is praying hard that Nana fails so they can come back to continue the l00t1ng. God forbid.
This Mona woman is either an 1d.iot or a hypocrate..... These are the characters in the NDC who caused their defeat. With this behaviour the party will disintegrate in the near future.
Shame unto you, God punish you. Wicked woman
Mona Quartey, your intelligence made Ghanaians poorer. YOu, alongside Amissor Author, Ato Forsen, should never have taken salaries. You got paid for spreading poverty. How did you even qualified to think for us. If fine brains are correcting your mess, just keep quiet, learn and stop your masculine posture. You owe us for taking salaries.
U were deputy finance minister for God knows how long and u couldn't make any difference. If u understood economics or knew anything about the financial aspects of an economy we wouldn't have suffered under your corrupt governance