Populist and 419 budget is a jeopardy for the medium term - Ato Forson

A former Deputy Finance Minister under the Mahama led administration, Ato Forson has predicted doom for the country following the presentation of the 2017 budget statement by sector Minister, Ken Ofori Atta. His comment is premised on the medium term initiatives outlined in the budget presented on Thursday, March, 2, 2017.

Government’s policy objectives for the medium term among others the Minister revealed will be to: build the most business-friendly and industrialized economy in Africa, capable of creating decent jobs and prosperity for all Ghanaians; modernize agriculture, improve production efficiency, achieve food security, and profitability for our farmers with special emphasis on value-addition; develop leadership skills, quality education, entrepreneurship, job skills and creative skills; and ensure a functioning social protection system which addresses the needs of the weak, marginalized, vulnerable and socially excluded; among others.’’

But Ato Forson has cautioned Ghanaians not be overjoyed with what he termed as a populist and 419 budget and a jeopardy to our medium term growth ‘’Ghanaians shouldn’t be happy yet. This budget is deceptive and a 419. This budget is nothing but very populist, it doesn’t preserve the medium term; Let me tell you also that as a Ghanaian; what they’ve also done doesn’t preserve the medium term.’’

Meanwhile the Minister has also outlined some initiatives to enable government achieve the broad macroeconomic objectives, and the policy direction will be to: restore and sustain macroeconomic stability; shift the focus of economic management from taxation to production; manage the economy competently; and make the machinery of government work to deliver the benefits of progress for all Ghanaians.

Prudent monetary and external sector policies will also be pursued by the Bank of Ghana to complement the fiscal policy stance to ensure price and exchange rate stability.

Ken Ofori Atta expressed strong optimism by projecting that some macroeconomic targets for 2017 including: overall real GDP growth of 6.3 percent; non-oil real GDP growth of 4.6 percent; end-year inflation of 11.2 percent; average inflation of 12.4 percent; overall fiscal deficit of 6.5 percent of GDP; primary surplus of 0.4 percent of GDP; and Gross Foreign Assets to cover at least 3 months of imports of goods and services will be achieved.

He added: ‘’Mr. Speaker, we believe strongly that our medium-term policies, anchored on fiscal discipline, a broadened tax base, elimination of wasteful expenditures, prudent debt management strategies, complementary monetary policy, and sustainable external balance will ensure even better macroeconomic outcomes in the medium-term. Consequently, the macroeconomic targets for the medium-term (2017-2019) include the following: overall real GDP growth to average 7.4 percent; non-oil real GDP growth to average 5.6 percent; inflation to be within the target band of 8±2 percent in the 2018-2019 period; overall fiscal deficit to reduce to 3 percent by the end of 2019; current account deficit projected to decline to 4.8 percent of GDP in 2018 and further to 2.7 percent of GDP in 2019; and Gross Foreign Assets to cover not less than 3.5 months of import of goods and services in the medium-term.’’

However, the former Deputy Minister says the Minister was overly ambitious on non-tax revenue adding, ‘’he [Minister] claimed that he is going to raise Ghc 1.6bn for non-tax revenue, but was quick to add that, it is going to come from divestiture. So we are watching. Which of the assets is he going to sell? Divestiture means, he is going to sell state assets. That is what he is going to do. So we are watching which of the state assets he is going to sell. I am not surprised because this is the business they do. They sell state assets…The tax revenue that he claims he can get, we cannot achieve that. I assure you. By the end of December 2017, you will tell me that I told you he cannot achieve that. On the back expenditure, what he’s done is robbing Peter to pay Paul. He has taken money from a good number of the statutory fund s for the purposes of achieving their political objectives.’’