Folks, after hearing Budgets since the Nkrumah days it will be an irony of life if a Ghanaian Budget can be considered a budget of Hope. Let?s hope so! In a press release published on Ghana web Nov.10, 2005, we read: ?Accra, Nov 10, GNA - The following are the highlights of the "Budget of Hope" presented to Parliament on Thursday by the Minister of Finance and Economic Planning Minister Kwadwo Baah-Wiredu?
It is the government's vision to create a vibrant private sector and an enabling environment to reduce the cost of doing business in Ghana.?
We must always have hope in life, but as former President Reagan said of the Soviet Union, ?Trust but verify?. Unless there are mistakes from the press release of this Budget, I have spent some time studying the numbers and there are some things that do not add up. I don't think many people have time to devote to such matters and to ask intelligent questions, and hence all previous government finance ministers get away with these. The world is built on numbers. I personally love numbers. I suggest people look at them carefully.
Can anybody explain these that I have highlighted [highlighting and color mine]:
?Provisional outturn for total receipts is projected at 35,672.5 billion cedis [$3.964 Billion], which will be 23 per cent more than last year's figure of 29,087.2 billion cedis.
- Total tax revenues are expected to reach 21,517 billion cedis [$2.390 Billion] by the end of the year, which will be an increase of 2.3 per cent over the targeted figure of 21,028 billion cedis.
- Direct taxes are expected to yield 6,442 billion cedis [$715.78 Million].
- Indirect taxes are projected to bring in 357 billion cedis more than the targeted figure of 10,720 billion cedis [$40.78 Million]
- Projected receipts are 1,260.0 billion cedis [$140 Million], which is 112.3 billion cedis below target.
- Provisional data available through September and projections to the end of the year indicates that total payments will amount to 35,672.5 billion cedis [$3.963 Billion], which will be 108.2 billion cedis lower than the budgeted estimates? (GhanaWeb, Nov.10, 2005).
I deal with financial numbers every day in spreadsheets and I think the Finance Ministry can make the job easier by sharing full information instead of breaking it down so much and using technical terms that don?t make sense even to somebody who does business in financial services. I hope the full report may explain what these apparent glitches in the numbers mean. One may ask - Why are some numbers in dollars and some in cedis? - Why are we still deceiving our people in counting in millions when we are in fact unable to buy a simple refrigerator wit a million of these cedis? - Why are there no efforts in the budget for government cuts in spending? Isn?t that what a Budget is, to try and cut costs to fit our revenues?
We know inflation seems to be down so far as the exchange rate of the cedi is concerned. However, prices are going up more than the reported 14.9%. The government needs to disclose what product numbers and prices they use to calculate their figures ? what economist call the ?bread basket?. It seems officials in Ghana have been in the habit of faking numbers for a long time, starting from the Botchwey era. That may be the reason they don?t trust Ghanaians shipping goods home and presenting official receipts from even major companies. Perhaps nobody should trust the government?s figures either since there is so much corruption reported in government. Many of these numbers may leave room for doubt, examples below [highlighting and color mine]:
?Overall budget balance is projected to record a deficit of 2.4 per cent of GDP, slightly off the targeted figure of 2.2 per cent.
- Growth in Reserve Money (RM) to September 2005 has dropped to 19.3 per cent, compared to a targeted figure of 22.1 per cent for the whole year and 37 per cent for similar period in 2004.
- Ghana earned US 2,110.9 million dollars from merchandise exports in the first nine months with cocoa beans and products contributing US 712.52 million dollars, a drop of US 148.08 million dollars from last year's earnings.
- Total import bill from January to September this year is estimated at US3,458.3 million dollars, an increase of 35.2 per cent over the same period for last year of US3,071.4 million dollars? (Ghanaweb, Nov.10, 2005). ---------------------------------
In summary, it seems our government is spending more than we are producing, importing more than we are exporting, even when we are in Bankruptcy. Why? Under the so-called free trade agreement one does not see any end to this cycle of deficits despite $1 Billion reported to have been loaned to Ghana under the GPRS ? Ghana Poverty Reduction Strategy. As said elsewhere, any wording with the term Strategy must be accompanied by a Plan showing Actions to be accomplished, Time frame, by whom, and Budget allocated. Otherwise government officials should stop using words that are simply academic and false. Failing that most of our loans with 10 years grace period end up in a cycle of debts to be repeated 10 years from now with another President flying all over the globe begging again for forgiveness? Is that what we want? Let?s hope those aspiring to be leaders have a real Strategy and let?s learn to choose words we can all understand in our budgets carefully, drop some of those zeros in our currency, make things simple for everybody to understand as a nation and stop faking and fudging, and present numbers in a spreadsheet where anybody can add and see where we are short. Last and not the least, let us use our budgets to present effort to cut government spending, balance the budget, develop our nation, create jobs and hence, and only hence, get out of poverty.
Can I add that every MP and Minister should be given a Business Calculator free of charge. That will be Ghana?s Christmas gift to our legislators. Maybe they can all go to work for us and we can add things up in every sector of the nation they are in charge of.