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12.02.2009 Business & Finance

Budget To Prioritise Fiscal Deficit Reduction

A source within the government 's economy team has dropped the hint that the priority of the 2009 Budget will be to address the country's fiscal deficit that currently stands at 13.4 per cent of Gross Domestic Product (GDP).

The budget, according to the source will also address the problem of ensuring effective resource mobilization so as to prevent the current situation where about 70 per cent of revenue mobilised from taxes was used to pay public sector wages and salaries.

According to the source, the draft budget will also address the problem of ensuring effective resource moblisation so as to prevent the current situation where about 70 per cent of revenue moblised from taxes was used to pay public sector wages and salaries.

According to the source, the draft budget will be ready by Monday, February 16, 2009 for presentation to the cabinet.

The source indicated that the team had received inputs from ministries, department and agencies (MDAs), as well as from various stakeholders for the preparation of the document.

A report carried by the Daily Graphic last month indicated that the first budget under the Mills administration was expected to be ready for Cabinet scrutiny by February 15, 2009 and subsequently to be presented to parliament by March 31, 2009.

The director of budget at the ministry of Finance and Economic planning, Mr Kwabena Adjei-Mensah, told the Daily Graphic in that report that preparatory work to get a budget for the year had begun.
Mr Adjei-Mensah stated that personnel at the Ministry were poised to complete the work by February 15, in accordance with a time table presented to the Ministry by the Sub-committee on Finance of the transitional team.
The Minister of Finance designate, Dr Kwabena Dufuor, said at his vetting by the Appointments Committee last Tuesday, that his immediate focus will be to reduce the deficit, a potential economic crippling phenomenon to between 8 and 10 per cent and to three per cent in the medium term.

Meanwhile government business is currently being run on a financial statement prepared early by the Ministry of Finance and Economic planning, to enable the new administration to operate smoothly for the first quarter of the year.

The statement was laid before the house by former Minister of State at the Ministry of Finance and Economic planning, Dr Anthony Osei-Akoto, in advance of appropriation for January to March, 2009 and the estimate of revenue and expenditure of the government for the 2009 fiscal year.

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