Gov’t downplays investors anxiety ahead of Nov polls

Government has affirmed its assurances to business executives, especially, investors who are feeling jittery ahead of the November polls that there will be economic stability and will spend within the budget limits.

“We will keep to our budget and ensure that we don’t overspend and that will help us to continue with the efforts we are making under the IMF programme. I don’t see investors taking the ‘wait-and-see’ approach due to the efforts we have made to cut the deficit,” she said.

Speaking at the KPMG Chief Finance Officers (CFO) forum which also saw the launch of the 2015 CFO Survey Report, in Accra, Deputy Finance Minister, Mona Helen Quartey, assured that government is working to stay within the budget limitations and will control expenditure.

The KPMG CFO forum was initiated in 2015, to among other objectives, to provide a forum for CFOs to interact with relevant regulators and articulate a common position on matters of mutual interest. It provides a platform for CFOs to regularly network on emerging topics, share knowledge on leading practices and occasionally, carry out surveys.

The persistent assurances from policymakers over controlled spending and economic stability stem from the governments’ penchant for overspending in election years as evident in the last elections in 2012, which saw the budget deficit rose the highest to 11.8 percent.

The fallout of this deficit surge in election years is that interest or debt-service costs have increased sharply soon after, with the economic situation worsening by a crippling three-year energy crisis, inconsistent inflow of donor budgetary support, falling commodity prices, rising inflation and constant currency devaluation.

Due to the constant over-expenditure in election years, investors and the business community in general have now adopted a ‘wait-and-see’ attitude before making critical business decisions.

Ms. Quartey stressed that President John Mahama has already given firm assurance that 2016 will not be one of those (over-expenditure) years, which should help to reduce the anxiety among businesses.

“The government is making frantic efforts to improve business confidence and achieve real results for the business community and the entire Ghanaian populace. It is a long and hard road to travel but let us not forget about where we have come from,” she said.

According to the Deputy Minister, the third IMF review was successful and the nation has met the performance indicator criteria and that there shouldn’t be a ‘wait-and-see’ approach from investors but rather a reward for the improvement in the fiscal situation.

“Our experience with 2015, a year of low revenues which was met with massive expenditure cuts, should give us hope. We have climbed down from a high budget deficit of 11.8percent in 2012 to 10.2percent in 2014 and further to 6.5percent in 2015 and there is every commitment to consolidate the gains we have made so far,” she added.

Data from the Ghana Statistical Service shows that the economy grew at an annualised rate of 4.9percent in the first quarter of 2016, compared with 4.1percent in the corresponding period in 2015.

Sectors including agriculture and services saw impressive growths whiles industry saw negative growth but the minister quickly added that government is committed to resuscitating the manufacturing sector with the revamping of factories like the Komenda Sugar, Ayensu Starch and Pwalugu Tomato factories.

“Frantic efforts are being made to boost agricultural output through the cockerel programme, boosting aquaculture and the provision of fertiliser subsidies to farmers, among others. The results for these interventions have and will continue to show in the medium term,” she added.