General News of 2014-02-06

Financial discipline will be our guiding principle - Mahama

President John Mahama says his government is determined to be financially disciplined in 2014 and beyond after posting "expenditure overruns" in the past few years.

Hosting a cocktail party for the Diplomatic Corp at the Peduase Lodge in the Eastern region, the President said his government “is exercising stricter financial discipline" now.

The Minority in Parliament has been accusing government of over-expenditure, a practice which goes against the Appropriation Act.

They question "why in 2009 government over-expenditure amounted to GH¢300 million; why over-expenditure in 2010 exceeded GH¢800 million [and] why over- expenditure totalled GH¢1.3 billion in 2011 and; the mother of all over-expenditures – GH¢2.8 billion in 2012".

The Minority MPs accuse government of breaking the bounds of decent governmental spending in order to win the 2012 general elections, a claim government has always debunked.

The President acknowledged difficulties in the economy but assured the diplomats his government was "taking some tough decisions. We are swallowing some bitter medicine and strengthening the fundamentals to ensure a better and brighter economic future for our people”,

"This budget is designed to achieve a proper calibration of our macro-economic fundamentals to ensure that the economy continues to stay on a positive trajectory in order to address the fiscal deficit caused by expenditure overruns of the past”, he said.

Expressing confidence in his Vice, President Mahama said “Our economic management team led by my capable Vice President Kwesi Amissah-Arthur has begun the implementation of our ambitious 2014 budget."

Very few Ghanaians may share the President's optimism.

A sliding local currency, the Cedi, to new low levels has rattled even the most optimistic.

Bloomberg reports that "The currency has slumped 23 percent in the past year, making it Africa’s worst performer after the South African rand," forcing the Central Bank to announce measures to stabilise the currency.

The measures have been criticised as draconian and unsustainable but the authorities believe they are necessary save the situation.

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