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05.03.2009 Business & Finance

High expectations await ``A Better Ghana`` Budget

By Daniel Nonor - Ghanaian Chronicle

Expectations are high as Ghanaians wait for what hope there is for the much trumpeted “Better Ghana” agenda, as the Mills' led government uncovers its economic and social transformation agenda in its first budget statement today.

The budget will undoubtedly be an opportunity for the President to fulfill his promises to the good people of Ghana by way of reduction of fuel prices, improve living conditions and to ensure a stable macro-economy, among many others.

Sources close to the Ministry of Finance and Economic Planning say a major priority of the budget is built around a better management of government's expenditure as articulated earlier by the President in his first State of the Nation address to Parliament, a couple of weeks ago.

In that address, the President indicated government's resolve to cut down on its expenditure by reducing state protocol budget and review exemptions regime

He said, the external deficit or Balance of Payment for 2008 was estimated at GH ¢3.42 billion or 18% of GDP, while the rate of inflation stood at 12.7 % at the end of 2007, and 18.1 % at the end of December 2008.

Over the last few months, the cedi has lost substantial value with respect to the US dollar. The President has attributed this situation to the delayed effect of excessive spending and trade imbalances that we have experienced in 2006.

By reducing borrowing and cutting down on expenditure, however, it will offer the private sector a better access to credit and reduce the competition with private sector for capital.

There are also indications of a review of taxes on petroleum products to keep the President's campaign promise of reducing fuel prices.

This, Experts say would test the managerial capabilities of Mills' economic team, as oil prices have started picking up after almost hitting a record low of some $30 per barrel.

Deep throat sources also indicate that government is likely to reinstate the taxes taken off some food imports by the Kufour administration, as part of mitigation measures against the global food and oil hikes.

Meanwhile a section of the public is expecting government to make greater commitment to develop local industries and improve agricultural production in the country.

Mr. Kinsley Ofei, General Secretary of the General Agricultural Union of Ghana, told The Chronicle that he expects government to come out clearly on its commitment to addressing the food security challenges in the country and to tackle the agri-business challenges by taking a critical look at the entire value chain.