Ghana’s successive governments always over-spend the country’s budget during election years, but a Deputy Minister of Finance, Mrs Mona Quartey, says the situation will be different this year.
She said the country’s experience in 2015, which was a year of low revenue that was met with massive expenditure cuts, should be an indication of less spending of the budget during the 2016 general election.
She gave the assurance at the launch of the Chief Finance Officers (CFOs) Survey Report by KPMG, an international accounting and advisory firm in Ghana, in Accra yesterday.
Buttressing the point, Mrs Quartey said Ghana climbed down from a high budget deficit of 11.8 percent in 2012 to 10.2 percent in 2014 and further to 6.5 percent in 2015.
She added that there was a commitment to consolidate the gains the country had made so far.
She further stated that the government was making efforts to improve business confidence and achieve real results for the business community and Ghanaians at large.
“It is a long and hard road to travel but let us not forget about where we have come from, in spite of the challenges we face as a nation. We know that the results shall inure to our collective benefit,” she promised.
Challenges
Mrs Quartey said although Ghana’s Gross Domestic Product (GDP) had grown at an average rate of 7.7 percent between 2011 and 2015, the country had experienced declined growth since 2011 when it exported its first barrels of crude oil.
She attributed that to the fact that petroleum production had increased the base of the country’s GDP.
“This made it challenging to attain the 14 percent growth we achieved in the referenced year since it would have required a subsectoral growth similar to the over 200 per cent experienced in the mining and quarrying subsector in 2011,” she said.
In addition, she said, the situation was exacerbated by the challenges the nation had with the erratic power supply.
“This contributed to lethargic performance, including negative growth, especially in the manufacturing subsector,” she said.
She was, however, of the view that the power situation had improved during the second half of 2016.
That, according to her, had led to positive growth in the manufacturing subsector which exceeded the 2015 GDP revised target of 3.5 per cent by 0.4 per cent.
Good news
Data released by the Ghana Statistical Service indicated that Ghana’s economy grew by 4.9 percent in the first quarter of 2016, compared to 4.1 percent in the corresponding period in 2015.
The agricultural sector outperformed the 2015 growth, growing by 2.8 percent, against 1.7 percent in the same period in 2015, while the industrial sector recorded a negative one per cent growth, against a 7.2 percent growth the same period in 2015.
Meanwhile, the services sector grew by 8.8 percent, compared to 5.2 percent in the first quarter of 2015.
According to Mrs Quartey, the government was committed to resuscitating the manufacturing subsector to take its rightful place in the industrial sector. Touching on the cedi, she said the currency had stabilised, against all odds, this year, saying that had mitigated the impact of non-food price hikes on inflation.
CFO Survey Report
Highlighting on the report, the Partner and Head of Audit, KPMG in Nigeria, Mr Tola Adeyemi, said 60 CFOs were surveyed and their perspective on the Ghanaian economy, ideal finance function and factors that contributed to creating sustainable cost advantages obtained.
He said the findings provided insights into tactical approaches that might help shape business decisions.
He said a number of the CFOs surveyed expressed strong positive expectations on the growth prospects of their respective organisations in 2016, while some indicated they did not expect economic growth prospect for 2016 to be better than that of 2015.
The survey also indicated that the key challenges that CFOs faced included the inability to predict changes in key macroeconomic indicators, exchange rate stability and the impact those factors had on prudent cost management.
The report said CFOs were also concerned about increased regulations, inadequate infrastructure and the competence of available personnel.
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