Business News of Wed, 20 Mar 20190
Minority demands new budget from government over ‘economic challenges'
The Minority in Parliament is demanding a new budget from government that addresses the current difficulties in the country.
According to the Minority Spokesperson on Finance, Cassiel Ato Forson, it has been proven so far that the budget presented last November has been thrown off gear and cannot deal with vulnerabilities of the economy as shown in the exchange rate and other economic indicators.
Addressing a stakeholder engagement, Ato Forson asked government to at least come before Parliament with a statement announcing critical policy changes that will enhance the prospects of the economy.
“The rapid decline in the value of the cedi has thrown the economy in disarray and the projections surrounding it as contained in 2019 budget. This has therefore undermined the confidence in the economy which is also sending wrong signals to the investor community. This calls for urgent steps to be taken by government to restore the economy.”
“The starting point is that we should be considering a new budget which considers all the distortions and serious problems occasioned by the fall of the value of the cedi. At the minimum we expect a statement to Parliament assuring the nation on the steps taken by government to address the instability of the economy. The budget as presented by the Minister of Finance can no longer be relied upon. It’s credibility and stability have completely been undermined by the cedi,” he added.
The cedi has depreciated against the dollar from GHc 4.9 to over GHc 5.5 since the turn of the year sparking concern in the business community, among others.
In 2018, the cedi depreciated by 8.4 per cent against the dollar.
In 2015, the three-year loan agreement concluded between the Government and the International Monetary Fund (IMF) contained agreements to freeze employment in government departments except for those under Education and health.
The agreement also expected the government to limit the nominal increase in the total wage bill to no more than 10 percent.
Cedi depreciation: ‘We should be okay’ in a couple of weeks – Ofori Atta
Finance Minister, Ken Ofori-Atta, last week said the free fall of the cedi against major foreign currencies especially the dollar, will be curtailed in the coming weeks.
He said the government expects some fresh injection of capital such as the $750 million Standard Bank bridge facility to deal with the challenges the cedi is currently facing.
The state’s short term intervention
The government expects the fresh injection of capital such as the $750 million Standard Bank bridge facility to deal with the challenges the cedi is currently facing.
The government is also eyeing funds from COCOBOD and the launch of the $3 billion Eurobond.
The cedi has depreciated against the dollar from GHc 4.9 to over GHc 5.5 since the turn of the year.
Finance Minister, Ken Ofori-Atta in comments on the government’s short term move said: “we are going after; $300 million, $600 million and another $750 million and 3 billion and [I think] we should be okay. And all of this should happen within the next two or so weeks.”
But the Minority in Parliament has described these measures as unsustainable.