Budget Must Manage Deficit (Front Page)

THE Finance and Economic Planning Minister, Dr Kwabena Duffuor, is expected to detail plans for managing the country’s budget deficit when he presents this year’s Budget Statement and Economic Policy of the Government of Ghana in Parliament House today.
It will be the maiden budget of President Mills’s administration which came into office on January 7, 2009 and it is expected to come up with measures to deal with the key economic challenges facing the country, especially how to minimise the budget deficit which now stands at 14.9 per cent.
The measures are expected to be consistent with the signals given in the President’s State of the Nation Address, portions of which stated, “I will impose austerity measures throughout the government machinery to ensure that we realise significant savings.”
The austerity measures are expected to be far reaching, according to sources at the Finance Ministry.
The budget is also expected to address a wide range of issues and challenges facing the economy in a period of global economic slowdown to satisfy the various sectors, some of which have already presented proposals to that effect.
On its part, the Ghana Employers Association (GEA), for instance, expects the government to allocate more resources to tackle national productivity, industrial attachment incentives, the improvement of employable skills and energy and consumer protection against illicit trade.
The Executive Secretary of the GEA, Mr Alex Frimpong, told the Daily Graphic that the association was leading a crusade with the tripartite committee to establish production indicators in all sectors of the economy, including mining and construction, manufacturing and services.
He said the Management Development and Productivity Institute (MDPI), a training agency under the Ministry of Manpower Development and Employment, should be well resourced to carry out the exercise, which he said “is critical to national competitiveness”.
At a meeting with the Minister of Finance in Accra last week, the Secretary-General of the Trades Union Congress (TUC), Mr Kofi Asamoah, said issues of wages and salaries should be considered in the budget.
The TUC raised issues on the single spine salary structure and said there was the need to take into consideration the fact that the Ghanaian worker had not been receiving adequate remuneration for some time now and added that the current economic situation should be considered in determining wages and salaries.
The congress also expressed the hope that the budget would commit more resources into the expansion of the National Youth Employment Programme (NYEP), which it described as an effective vehicle for job creation and “one of the most important initiatives the government has taken in recent times”.
The TUC said the NYEP was an important national programme that had the potential of creating decent jobs for the youth across the country, as the high rate of unemployment and underemployment among the youth posed a great danger to the social and political stability of the country.
It pointed out that its own evaluation of the programme had revealed that workers employed under the programme were being paid below the national minimum wage, saying that they were receiving their salaries irregularly and in some cases salaries were delayed for more than five months.
The TUC said although the programme was designed to create half a million jobs by the end of 2009, official reports showed that it had created 108,000 jobs by the end of 2007 and that at the time of the evaluation in 2008 the recruitment of new workers under the NYEP had been suspended due to lack of funds.
In the State of the Nation Address which many saw as a forerunner to the budget, Professor Mills had noted that there was the need for the country to expand its exports, cut down its import bill, manage its finances carefully, as well as live within its means.
The President explained the point further when he said, “We are working on a number of measures and the Finance Minister will announce in detail the specific measures aimed at achieving macroeconomic stability in the budget statement to be presented shortly.”
Giving hints as to what to expect in the budget, Prof Mills said the government would reduce State Protocol budget by half, reduce official foreign travel budget by half, as well as reduce official seminars and workshops budget by half.
In addition, he gave the hint that the government would also closely monitor the targets and dividends of state-owned companies and enterprises, review the exemptions regime, increase efficiency in revenue collection and negotiate the single spine wages and salaries regime.
These measures, which are expected to be elaborated in this year’s budget, are expected to help the country to reduce the overall national debt which is reported to stand at US$7.6 billion.