NECO 10

Economics Budget Debate Does the NDC government really care for a better Ghana?-Dr Akoto

Economics Budget Debate Does the NDC government really care for a better Ghana?-Dr Akoto Accra, Dec 1, GNA -Dr Osei Akoto, New Patriotic Party (NPP), and Member for Old Tafo, on Wednesday questioned the government commitment to its better Ghana Agenda as he began the debate on the budget statement. He said the government's fiscal programme in 2010 was worse than reported adding, a cash deficit was over 13 per cent of GDP and on commitment basis the deficit was well over 23 per cent of the GDP as a result of new accumulation of arrears in 2010. The Minority Spokesman on Finance said public debt has ballooned to over 68 per cent of GDP and the NDC administration has in two years increased the country's external debt by more than the NPP did in eight years. This does not include the STX loan of over 1.5 billion dollars, potentially increasing to 4.5 billion dollars, the so called 13 billion dollar framework loan package from China as well over 700 million Euro loan package currently before Parliament. Dr Akoto said the proposed fiscal measures are not robust enough to clean up the economic mess of the 2010, saying, on the revenue side the 2011 budget continues to increase the burden on Ghanaians by increasing a wide range of taxes on businesses and individual. According to him, the appetite for debt accumulation especially on the external front about 17.7 billion dollars from Korea and China continues to grow as a result of anticipated increases in petroleum revenues. He said one must exercise extreme caution since the oil revenue of 584 million Ghana Cedis expected in 2011 was barely enough to pay off 12 per cent of the stock of domestic debt of 4.6 billion Ghana cedis. He said having moved from HIPC status to MIMIC (Moderately Indebted Middle Income) Country under the NPP administration, Ghana was slowly heading towards being a HIMIC (Highly Indebted Middle Income Country) and eventually back to HIPC, is this better Ghana agenda. Mr James Klutse, National Democratic Congress (NDC), Member for Ketu South, and Chairman of the Finance Committee, said the NDC inherited arrears which the government was making efforts to pay off thus the need to widen the tax net to generate more income. He said apart from inflation which has reduced from 18.1 per cent to 9.3 per cent, interest rate which was also above 30 per cent was now 22 per cent especially at the Ghana Commercial Bank and the Bank of Ghana rate is 18 per cent with the cedi appreciating remarkably. He said the economy had stabilized under the President Mills administration and that there is the need to build on the stabilization for growth in order to create jobs. He said the country cannot rely on foreign loans thus the essence of widening local taxes, adding that there were people who live and work in Ghana but pay no taxes and they all must be involved. Mr Klutse said the budget was development oriented and that was why measures such as agricultural mechanization, provision of water, roads education, health in addition to social interventions such as the school feeding and the free school uniform programmes were highlighted. He called on all to support the motion for the adoption of the budget so that "everybody would enjoy the benefits". Mr Moses Asaga, NDC member for Nabdam, said government had announced a number of policies in the budget statement to address nagging issues. According to the Member, there was Ghana was enjoying international confidence as he cited China as one country that was prepared to give more money to assist. He said this year, the Chinese government has given 14 billion dollars for infrastructure development. Mr Asaga said in 2008, there was a political talk that the NDC government would not be able to manage the oil revenue but very soon the people would find out what plans government has for them. 1 Dec. 10