Budget lacks ambition -NPP (Spread)

HE Minority Spokesman on Finance, Dr Anthony Akoto Osei, has described the 2010 budget as one lacking ambition in terms of spurring economic growth.
He said that was not surprising, considering the government’s dealings with the International Monetary Fund (IMF).
Dr Akoto Osei, who is the Minority Spokesman on Finance, explained that by committing itself to IMF programmes, the NDC government had been very limited in terms of its ambitions for economic growth.
He said that was not surprising, considering the government’s dealings with the International Monetary Fund (IMF).
Dr Akoto Osei, who is the Minority Spokesman on Finance, explained that by committing itself to IMF programmes, the NDC government had been very limited in terms of its ambitions for economic growth.
“In an IMF programme, if you get too ambitious, the economy will collapse,” he stated.
He explained further that with the IMF model, growth is residual and rather the emphasis was on stabilisation and “tightening the belt”.
He, however, said growth was critical, stressing that an over-bearing emphasis on the reduction of deficit was not healthy.
“Economic management is not just about deficit reduction. If you tighten up too much, you go into a recession. For a social democratic government, they have to ask themselves “where are we getting ourselves into?”
He said the restoration of import duties on food items such as rice and wheat gave an indication that the government needed revenue to meet its targets.
He said an NPP government would not have gone to the IMF, adding that the recognition of the need to promote growth had prompted the NPP to get out of the IMF programme in 2006.
He said it was important the government adopted measures to protect domestic production of food items but cautioned that care must be taken when putting taxes on imported stable foods in order not to make them too expensive for the ordinary person.
However, Mr Yaw Osafo-Maafo, who was one-time Minister of Finance and Economic Planning in the Kufuor regime, said he is impressed with the government’s attempt at using the 2010 budget to stabilise the cedi against the major foreign currencies.
Mr Osafo-Maafo, however, said the budget did not come up with strategies to raise domestic revenue, which, he said, had dropped.
On his part, the Chairman of the Finance Committee of Parliament, Mr James Klutse Avedzi disagreed with the views of Dr Akoto Osei, stressing that the government was on the right track.
He said when the government assumed power this year, there were so many undisclosed arrears, which they became aware of in the course of the year.
He said the growth rate of 6.5 per cent targeted for 2010 was realistic, stressing that there was no point in setting targets that could not be attained.
Mr Avedzi said because of the global economic recession, average growth in the world was between two and three per cent, hence 6.5 per cent growth was ambitious enough.
On the restoration of the import duties on some food items such as rice and wheat, Mr Avedzi explained that the NPP government created a mess by removing those taxes.
He said the idea was that the reduction in prices would be passed on to the consumers but that had not been the case as the middlemen were rather the beneficiaries.
A former Deputy Minister of Finance, Mr Kwaku Agyeman-Manu, said this year’s budget did not come up with anything new apart from the introduction of taxes and tariffs on food items, which the previous government withdrew, as well as few areas where costs were going to be cut.
Mr Agyeman-Manu, who is also the Member of Parliament (MP) for Dormaa West, said without any knowledge of the volume of local rice production, the government was rushing to cut down on importation of rice, which was considered a stable food in Ghana.
He also said there was also no single statement in the budget to encourage workers to do more apart from the old issue of the Single Spine Salary Structure (SSSS), whose implementation period had elapsed.
“All the social interventions which the Finance Minister talked about were introduced by the NPP. He was forced to continue with them because they had already begun,” he stated.
The MP for Akwatia, Dr Kofi Asare, said he did not hear anything significant being said about the health sector, adding that if the highlights of the budget was anything to go by, then it was tantamount to collapsing the health sector.
The MP for Juabeso, Mr Sampson Ahi, was in full support of the government’s intention of re-introducing tariffs on imported rice so as to encourage local production, adding that it could help increase employment locally.
Mr Ahi also expressed gratitude to the government for giving indication that it would pay bonuses to cocoa farmers and also on time.
For his part, the NDC MP for Sege, Mr Alfred Abayeteye, said that the 2010 budget would put things right for effective growth.
He called on Ghanaians to be nationalistic and rally behind the government to achieve the laudable goals set in the budget.
“This is not the time to share blame. All hands should be on deck for the betterment of Ghana,” he said.
The NDC MP for Nadowli West, Mr Mathias Puozaa, is a rural-friendly budget since all the initiatives set out would enhance the living standards of the rural folks.
He mentioned policies under the agriculture and education sectors as clear indications of the government’s intention to better the lot of rural people.