2018 Budget: ‘Economy to grow by 6.8%’ but Minority insists these are ‘unreliable promises’

Finance Minister, Mr Ken Ofori-Atta, has announced that government intends to grow Ghana’s economy by 6.8 percent in 2018.

According to him, the figure represents a 0.5 percent increase, compared to 2017 which was pegged at 6.3 percent.

The minister made the announcement on the floor of Parliament, whilst presenting the government’s budget and policy statement for 2018.

He hinted that government has targeted “an overall GDP growth rate of 6.8 percent, with non-oil GDP growth rate of 5.4 percent.”

“Our prime focus is to ensure that the fiscal deficit, which remains our principal fiscal anchor, continues on a downward trajectory, reaching 4.5 percent of GDP from the projected 2017 end-year estimate of 6.3 percent,” he added.

Inflation

On inflation, Mr Ofori-Atta explained that government was targeting an end-of-year inflation rate of 8.0 percent, lower than the 11.2 percent targeted in 2017.

Currently, inflation rate as at October stood at 11.6 percent, the finance minister announced.

He was however, hopeful the fiscal deficit of the country may stabilise below 5 percent of GDP, as government puts in all the macroeconomic measures to grow the economy.

“Achieving this objective is not only critical, but necessary if we are to maintain the healthy primary balance surplus required to eventually reduce the rate of debt accumulation,” he reiterated.

He maintained that there was the need to boost domestic revenue through innovative channels that will not place undue burden on the entire populace.

“We must make these decisions in good time to ensure that our future generations will be bequeathed with a priceless inheritance of sustainable fiscal environment. In this vein, optimising resources mobilisation through improved tax compliance and efficient and effective revenue administration remains an important part of our fiscal strategy to boost domestic revenue mobilisation for 2018 and the medium-term,” he noted.

Electricity tariff reduction

According to the minster, residential and non-residential electricity consumers in the country will enjoy a 13% reduction in tariff beginning January next year.

Additionally, other composite charges in the tariff build-up of electricity have been reduced by the government.

“The reductions in electricity tariff as contained in the 2018 budget are; Residential – Up to 13%, Non Residential – 13%, Special Load Tariff- Low Voltage – 13% ,Special Load Tariff -Medium Voltage – 11%, Special Load Tariff -High Voltage – 14%, High Voltage Mines – 21%,” the minister disclosed.

The government, he indicated, will also aggressively pursue the national LPG promotion policy in order to streamline the sector.

However, the Minority Leader in Parliament, Haruna Iddrisu, described the 2018 budget statement as full of “unreliable promises.”

“With the current high unemployment rate, high inflation rate and uninterrupted borrowing there is no way those promises are going to be fulfilled,” he said.

He wondered what was happening to the ‘One Village One Dam’, ‘One District One Factory,’ among other campaign promises they so much touted about.”

On reduction of electricity tariff, the minority leader said the minister should have first given credit to the erstwhile National Democratic Congress (NDC) administration for putting in place adequate measures that brought the electricity crises to an end before leaving office.

“He should have given us the credit because they inherited a reliable source of electricity. However, we are anticipating a reduction in our electricity bills by close of next months,” he said.

On Free SHS, he said the government should not be deceived that every parent in the country was happy with the decision to start the programme from the first year. Lots of parents are unhappy because the programme did not cover all students in senior high school

He however, described as “positive news” the announcement by the minister to employ at least 100,000 graduates in 2018.

Macroeconomic Performance For 2017

According to the minister, there have been enormous achievements in the area of microeconomic stability.

The following are some of achievement the minister enumerated: “Overall real GDP (as of June) 7.8%, Non-Oil real GDP (as of June) 4.0%, End-period inflation (as of October) 11.6%, Overall budget deficit on cash basis as percentage of GDP(Sept) 4.5%, Primary balance (Sept) 0.3%, Current account balance (August) (0.2%), Gross International Reserves (import cover)-Sept 3.9% and End year expected deficit 6.3%.”

Agriculture

To promote agricultural mechanisation, the minister said 220 tractors and accessories comprising 141 maize shellers, and 77 Multi-crop threshers were distributed to farmers and service providers last year.

“In 2018, the Ministry will distribute 200 tractors and matching implements, 1,000 power tillers and walking tractors, 30 tractor mounted rippers, 10 tractors drawn rear blade, 10 tractors mounted slasher, 60 booms and orchard sprayers, 4000 motorised sprayers, 60 mechanical and pneumatic planters, 50 cereal harvesters, 200 multi-crop threshers, 400 irrigation kits (engine and solar powered sprinklers sets), and 100 green house technology for horticulture production,” Mr Ofori-Atta revealed.

Job creation

Mr Ofori Atta told members that government was putting measures in place to address the unemployment menace.

To this end, he indicated that government will introduce new interventions such as the National Builders Corps (NBCs) to deal with graduate unemployment.

Mr Ofori-Atta further explained that the introduction of NBCs programme will create about 100,000 new jobs averaging about 462 per constituency.

He added that government will open up recruitment in the public sector, which has been captured in the budget.

In addition to this, he noted that more stimulus packages will be provided to support more industries; (100 new factories, revive 80 old factories and establish 3 regional industrial parks), employ more people in the cocoa sector (over 10,000) and livestock interventions all aimed at creating new employment opportunities for the youth.

Education

According to the minister, government intends to further increase capitation grant even as Free SHS budget is increased to over Gh¢1 billion in 2018 and further invest in reforms in technical and vocational education in line with the government’s commitment to education.

Housing

Mr Ofori-Atta indicated that government will start the 1st phase of 10,000 affordable housing projects.

Roads

Government, he said, will commence actual construction of railway lines where procurement processes started in 2017 (Kojokrom- Kumasi line).

At the same time government will undertake significant road construction projects in various parts of the country.

“Mr Speaker, let me assure this August House that in 2018 we plan to sustain the economic stability achieved. We will not be indiscipline to lose it all after one year. It is needed so that the growth and jobs we build on it will be sustainable,” he added.