Government's Budget and Economic Policy statement for the impending year was been called Golden jubilee Budget. This makes a lot of sense because it coincides with the celebration of the 50th Anniversary of the country's independence.
Indeed this country has made enough strides in the improvements of its economy since independence. In particular, as citizens of this country will bear with me, a lot have been achieved under President Kufuor. Critical assessment of this Budget Statement will reveal that it holds a lot of tope for the future of the nation's economy. It is for this reason that I find it a true Golden Jubilee Budget.
President Kufour's Government inherited an economy where the Gross Domestic Product was 3.7%. It has improved steadily from 4.2% in 2001, 4.5% in 2002, 5.2% in 2003, 5.6% in 2004, 5.9% in 2005 and 6.2% as at September this year as coated by the Ghana Statistical Service and this was slightly above the targeted 6.0% projected for the year. This growth rate has been attributed to the significant growth experienced in the Industry and Service Sector. The Agricultural Sector which is the mainstay of the economy could not achieve its targeted growth rate of 6.6% contribution to the economy. It is projected to contribute 5.7% GDP to the economy representing 0.9$ drop of the total GDP. The contributory sub-sectors to the underperformance are the Cocoa production and Marketing; and Forestry and Logging sub-sectors. In the face of all this developments, the countries Gross Domestic Product continues to improve steadily. The macroeconomic policies continued to strengthen and the country's foreign reserves have been improved.
Inflation has continued to decline since President Kufour took over the reins as the Head of Government. Available figures produced below would buttress this point. In the year 2000, inflation was around 40.5%. It dropped to 21.3% in 2001, 15.2% in 2002, 23.6% in 2003, 11.8% in 2004, 14.0% in year 2005 and 10.5% as at September 2006 against the projected single digit inflation at the start of the year. The economy has been able to chalk all these successes despite the increasing international crude oil prices. Again Interest Rate has continued to decline and thus has helped the business community to access loan at lower interest rates.
Under the Budget statement as presented by the Minister of Finance and Economic Planning, we were told that over the 6 years, average monthly wages for public servants have increased by 360 per cent. It is under this backdrop that I found it strange on the agitations going on within the Labour front. Government under the 2007 Budget have projected wage bill of 13.2 trillion cedis which represents 66 per cent of total discretionary expenditures for the state as compared to 11 trillion cedis projected to be spend by close of the year representing 40 per cent of governments discretionary expenditures. We all as a nation can analyze from these figures to conclude that indeed,
there has been an upward adjustment in the payment of wages and salaries year after year. Government has given notice to the fact that, come January 2007, all public sector workers would have upward adjustment in their wages and salaries. Is is not strange for GNAT executives to submit a Budget proposal for their members to the tune of 28.84 trillion cedis which is 93 per cent of the total 32 trillion cedis of total revenue targeted for the year. Public sector workers should be a little bit considerate and make demands that the economy can contain. If we want to earn high wages and salaries, then we should help to increase productivity which will in turn improve our economy for realistic wages to be paid.
I also welcome the positive initiatives taking by the government to address the current energy crises as stipulated under the 2007 budget statement. An amount of US$470m is said to be invested over the next 3 years to improve the energy generating capacity in the country. Government, we learnt is sourcing funds from the Chinese government to finance the Bui Dam project which will add 400 MW to the generation capacity of the country and thus increase the security of Ghana's power supply. Again, the government has hinted that it will continue to speed up the development of renewable energy technologies particularly wind, solar and waste-power in 2007.All these efforts are made to have a permanent solution to our power crises which have severely affected our industries and other sectors. Lets all as a country appreciate the efforts government is making to have a permanent solution to the ongoing power crises.
The country has made great gains in the economic sector and so credit must be given to President Kufuor and his government. The 2007 Budget which focused on 'Growth and Poverty Reduction Strategy' which emphasizes on accelerated growth as a means of wealth creation, poverty reduction and equitable social development; what this means in ordinary person's language is putting money in the pockets of the people who under normal circumstances may not be able to create wealth while at the same time not compromising on social and infrastructural development. This is a sure way of meeting the Growth and Poverty Reduction Strategy11 which enters the second year of its implementation.
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