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16.11.2007 General News

Mills: Budget has no brighter future for Ghanaians

Mills: Budget has no brighter future for Ghanaians

Read the full statement issued from the office of Prof. John Evans Atta Mills on the 2008 Budget read on Thursday by the Minister of Finance and Economic Planning.


In the budget statement presented yesterday by the NPP Government, we are told there is “A BRIGHTER FUTURE”.

In the past we have had budgets read by the NPP government which have all purported to have a positive twist: “GOLDEN JUBILLEE” budget, “GOOD NEWS” budget and now we have “A BRIGHTER FUTURE” budget.

However, bitter experience has taught us not to take anything stated in an NPP budget too seriously as we tend to find that old promises which are not fulfilled are repeated under a different guise in subsequent budgets. No explanation for the failure to perform is ever given.

The retrofitting of the Kpong turbines was promised in previous budgets. We were informed that the Osagyefo barge would be commissioned in 2003. We are now being promised it will be done in this financial year.

The failure by the NPP Government to deliver in this area was felt by all of us during the energy crisis where the government had done nothing in that sector with regard to positive energy production notwithstanding their budget promises.

We are also being told that the school remodelling programme in secondary schools will be completed next year for the 1st phase comprising 31 secondary schools.

However, in 2001 we were told that each of the 110 districts would have a model secondary school. In 2002 we were told phase 1, involving 31 schools would be completed. In 2003 we were informed of phase 2 involving a further 25 schools.

How seriously can we take this budget when they are now talking of completion of the 1st phase in 2007, some 6 years after the initial promise was made?

The veracity of the figures contained in the current budget is also a point of contention.

We have recorded major downturns in the majority of sectors and yet we hear talk of a brighter future.

In agriculture, we have a projected decline to 4.3% from a figure of 4.5% in 2006. In manufacturing, we see a decline from 4.2% to a projected rate of -2.3%. In the electricity and water sectors we recorded a rate of 24.2% in 2006 with a projected decline to -15% for 2007.

Not only has the NPP government not been able to meet the intended projected figures given for the last fiscal year, the current projections are lower than our performance in 2006 by extremely large margins.

Based on the figures available, major concerns can be raised about the projected growth rate of the economy of 6.3%, notwithstanding any offsetting from other sectors.

The NPP government will struggle to attain the figures projected for 2007 let alone talk of a brighter future.

There is much trumpeting by the Government of the increase in the minimum wage from 4,200cedis in 2000 to 19,000 cedis now, an increase of 350%.

Yet, there is no attempt to relate this to the cost of living of the ordinary Ghanaian.

The rent for a single room in 2000 was 15,000 cedis. Today, it is 200,000 cedis, an increase of 1250%. Bread in 2000 averaged 1000 cedis and it is currently averaging 10,000 cedis, an increase of 900%. Kerosene was 5,800 cedis a gallon in 2000 and now it is 42,000 cedis, an increase of 600%. A 14.5kg cylinder LPG gas was 15,000 cedis in 2000 and it is now 144,000 cedis, an increase of 867%.

When put in this perspective, the increase in the minimum wage still leaves the ordinary Ghanaian worse of now, than he was in the year 2000. This is made worse when jobs cannot be found and the employment situation is getting worse.

For a government that was critical of previous governments borrowing requirements and actually made political mileage out of the issue, by criminalising it, the level and extent of borrowing that President Kufour and the NPP Government has embarked upon, comes as a surprise. What is more sinister is the fact that the loans being contracted currently are at higher interest rates than in the past.

The indecent haste in sourcing the $750 million Eurobond facility on the capital market may have deprived us of the ability to access social sector investment loans in the form of grants and concessionary loans.

It is unfortunate that government wants to give itself credit on a high interest loan to assist the VRA from its precarious financial position when the problem at the VRA was created by the government.

The African Peer Review Mechanism (APRM), 2 years ago placed an obligation on government to create a Northern Development Fund. Nothing was done.

A few weeks ago, the Catholic Archdiocese of Tamale, at a conference, reminded government of its obligation with regard to the Northern Fund.

The idea to create the Fund was therefore not an NPP initiative for which the government wants to take credit for.

Any serious attempt to help the 3 Northern Regions of Ghana could have been adequately accommodated in the allocation of funds under the Millennium Challenge Account which was rejected by the NPP government.

The “seed” money of 25 million Ghana cedis is paltry and an affront to the people of the 3 Northern Regions in light of the 300 billion cedis spent by government on refurbishing the “Peduase Lodge” and the over 500 billion cedis spent on the presidential palace.

It was hoped that in this era of high crime, armed robberies, contract killings, a high level of drug trafficking within our sovereign borders and corruption which is a crime, specific measures to address these issues would have been highlighted within the budget.

The government has declared clearly that it has failed and gives clear evidence of fiscal irresponsibility within the budget statement.

In the space of a year, from 2005 to 2006, the fiscal deficit increased from 2.7% to 7.8% of GDP. This was due partially to the irresponsible expenditure for the 50th anniversary celebrations and the incompetent management of the energy sector leading to an energy crisis.

To curb its own expenditure excesses, the government has decided to resort to legislation in the form of a Fiscal Responsibility Bill.

Clearly, an irresponsible government needs legislation to make it responsible.

The NDC will respond to the detail of the budget statement in due course.

There is no “brighter future” for Ghanaians within this budget.

John Evans Atta Mills
(NDC Leader & Presidential Candidate)