Government urged to "bite the bullet"

Accra, April 30, GNA - Mr Tony Oteng-Gyasi, President of Association of Ghana Industries (AGI), on Thursday urged the government to discipline itself and implement its policies despite some foreseeable undesirable consequence to its future political fortunes. "Government must bite the bullet and implement its policies to move the country forward in spite of the short-term resistance from the public on some of the hard decisions," he said.

Mr Oteng-Gyasi made the remark at a day's roundtable on the 2009 Budget Statement, jointly organised by the World Bank and the Department of Economics of the University of Ghana.

The workshop, which focused on the ways to make the budget work for the country's good in the midst of the global financial recession, was attended by representatives from both the private and public sectors. Mr Oteng-Gyasi noted that since the inception of the Fourth Republic, the economic challenges of the country and suggested solutions, as per government policies in the various annual budget statements, had not changed much, but the problem had been with the implementation of the policies.

He said governments often feared the public resistance to the hard decisions vis-=E0-vis its own future political fortune and therefore reneged on their commitment to implement policies.

"This is because government does not do much to sell the policies to the people. We can learn from the United States, where the president himself goes round explaining to the people why they needed to spend their way out of the recession and for that there is minimal public resistance to his famous US$700 billion relief plan."

Mr Oteng-Gyasi also urged the government to enact laws to back specific projects and programmes in order that government itself would be bound to undertake those projects to move the national development agenda forward.

On budget estimation, he said: "We must move away from the usual practice and begin our current budgets with the actuals of the previous budget in order to paint a more realistic picture for the future." Giving an overview of the 2009 budget, Professor Newman Kwadwo Kusi, Director of Budget at the Ministry of Finance and Economic Planning (MOFEP), agreed with Mr. Oteng-Gyasi that implementation of government policies had been a challenge due to a myriad of factors. He explained that as high as 56.6 per cent of total government spending went into statutory payments, including salaries, debt servicing, payments into various government funds, and the government was only left with the remainder of the budget to run the economy. Added to the inadequacy of the budget to meet government expenditure, huge leakages in the direct revenue sector, financial indiscipline in most ministries, departments and agencies (MDAs), among other things, broke the back of the government, he said. For instance out of 600,000 registered profit-making organisations, only 140,000 were active and just s little over half of that number had been captured in the IRS tax net.

"We are working on roping in the other half to double direct revenue within the shortest possible," Prof. Kusi said. He said the way forward was to streamline the salary structure and reduce government spending by cutting down subsidies and other non-profitable spending.

Prof. Kusi also announced measures put in place to ensure that the government delivered on its promises in the budget; but called on the public to come along with the government both in good and in bad times.