Finance Minister Mr. Seth Terkper has reiterated that government will avoid any move that may result in spending beyond what have been budgeted for in 2016 to halt the habit of incurring huge debts after election years.
Presenting the 2016 budget in parliament last Friday, Mr. Terkper emphasized “We will resist the temptation of election year overspending”.
He, however, added that “the Electoral Commission and other governance institutions will be adequately resourced for free, fair and transparent elections”.
This is not the first time government has indicated strongly that it would not exceed the expenditure for 2016 —which happens to be an election year and likely to see labour agitations for salary increment.
“I have seen more demonstrations and strikes in my first two years. I don’t think it can get worse”, President John Mahama said in March 2015, explaining that the strategy has been adopted by workers’ groups to tie the hands of government, especially in election years.
A brighter medium term
According to Mr. Terkper, the 2016 budget, themed “Consolidating Progress Towards a Brighter Medium Term” will focus on containing government’s fiscal expenditure to enable the essential parts of the economy such as education, health and road networks to benefit fully from government’s spending.
He pointed out that the economy has suffered major shocks for the past three years due to drastic fall in the prices of gold, oil and cocoa, which have impacted heavily on government’s projected revenue.
“The disruptions in gas supply for two and half years has also affected power supply adversely, and slowed down growth, especially in the private sector”, he intimated and quickly added that “government has been working tirelessly to keep the economy strong”
Government’s growth target
On government’s home-grown policy and the IMF program, Mr. Terkper announced glimpses of good gains as the economy consolidates.
“The withdrawal of subsidies is helping to consolidate gains. Budget deficit is down to 2.5% GDP, a reduction that is remarkable”, he said.
According to him, government is forecasting a GDP growth of 4.1 percent in 2016, compared to 3.5 percent initially projected, while the World Bank is projecting growth at 7 percent.
Debt management strategy
As part of measures aimed at reducing the debt stock, Mr. Terkper reiterated moves by the economic team to press on all commercial and quasi-commercial projects to refinance themselves.
He added that government has decided as a matter of priority to secure long- term loans that will have the capacity to pay for itself in order to insulate the tax payer from paying for such facilities.
“Provisional debt stock as at September, 2015, stood at GH¢92,161.84 million
(US$24,285.07), made up of GH¢54,488.26 million (US$14,357.91million) for
external debt and GH¢37,673.58 million ($9,927.16 million) for domestic debt”.
He explained that in terms of GDP, the public debt stood at 69.12 percent at the end of September, 2015 from 70.15 percent in December, 2014.
Touching on education, health, road and water infrastructure, Mr. Terkper said the country is on the right path of development and economic prosperity.
He maintained that, the country has successfully eliminated “schools under trees”, and is close to completing its 123 Community school projects promised in the 2012 elections.
He said the government has also added two new functioning universities in the Volta and Brong Ahafo Regions, all geared towards improving tertiary education in the country.
On health, Mr. Terkper said government is on track at providing a total of 6,000 hospital beds in 2017 as a result of the expansion projects of the University of Ghana and the Ridge Hospitals.
These, he indicated will guarantee improved health delivery in the country and impact positively on women and children.
On water, he said government has added a total of 77.5 million gallons of water supply per day in 2015 but the figure will increase to 109.7m gallons in 2016 due to the many water expansion projects currently underway across the country.
Touching on the bright future in the power sector, Mr. Terkper said the country is on course to adding about 800 megawatts of power to its generation capacity by close of 2015.
He promised the country will end the power crisis and revert the country to its position as a net exporter of power in the coming years.
On housing, the Minister said over 18,000 housing units are at various stages of completion to improve upon the housing deficit in the country.