Story: Samuel Doe Ablordeppey & Musah Yahaya Jafaru
ECONOMIC experts and accountants at a roundtable discussion on the 2009 budget have called for a non-partisan debate on the budget and consensus building in addressing the country's economic challenges.
That, they said, was the only way to come up with policies to mitigate the effects of the world financial slowdown on the country.
“The problem we are confronted with has to do with the global economy which does not know party affiliations and the four-year cycle of governments. Our budgeting and execution processes should not be a winner-takes-all approach but we should work and speak together to deal with the challenges confronting us,” the Vice-Rector of the Pentecost University, Prof. Kwame Boasiako Omane-Antwi, who chaired the forum, summarised.
The Budget Digest was organised by the Institute of Chartered Accountants (ICA) (Ghana) in Accra yesterday to examine the budget and make recommendations for its implementation and highlight areas where expenditure should be channelled.
The accounting experts urged the government to balance political expediency with the realities on the ground by making “hard choices” to propel the socio-economic development of the country.
They said such hard choices might affect the government's popularity in the short term but the long-term gains would vindicate its stance.
The accountants also emphasised the need to channel more resources into agriculture, after having discussed a lead presentation by a Research Fellow of the Institute for Statistical, Social and Economic Research (ISSER) of the University of Ghana, Legon, Dr Darko Osei.
The discussions centred on the budget in the light of the global financial crisis and they would enable the ICA, which regulates the accountancy profession in the country, to come up with suggestions to the government in a communiqué.
According to the ICA, it was time the country added real value to its agricultural produce and also adopted a pragmatic approach to managing the value chain to ensure quality produce.
“It calls for attention to invest in equipment, plants and cold chains to achieve the best quality for the international market,” Prof Omane-Antwi stated.
He also reiterated the consensus reached by the accountants that a continuous deficit financing would not help the country and that it should have a terminal point where it could balance its budget.
The accountants also wanted the country to institute measures to grow the various industries, such as accounting firms, which were being crowded out by expatriate firms.
They wished, for instance, that the government would institute measures to ensure that the auditing of listed companies could be done jointly by Ghanaian accounting firms and their expatriate counterparts, as was the case in some developing countries, as a way of developing local capacity and also enabling local firms to employ more graduates from the country's tertiary and professional institutions.
Dr Osei saw in the budget a good attempt to mitigate some of the effects of the global financial crisis, including dwindling inflows from foreign direct investments and concessionary donor inflows, particularly grants, and remittances.
He also found in it efforts to raise more revenue in creative ways and noted that the world financial slowdown could waver the confidence of local investors, while financial intermediaries would be more risk averse and, therefore, cut down lending, with possible adverse effects on small and medium-scale enterprises.
He was at home with efforts to reduce the overall fiscal deficit, which he said were in the right direction because evidence globally did not supported growth through budget deficits.
“The argument of spending to grow is not supported by evidence globally. All the countries that saw growth, such as the Asian economies of China, India and Malaysia, and even Botswana, which at a point was the world's fastest growing economy, did not keep deficits above four per cent of their GDPs,” Dr Osei stressed.
He, therefore, charged the government to look at ways of channelling resources into productive sectors with the potential of achieving growth within the medium to long term.
He emphasised that any development and modernisation of the agricultural sector should be matched with investments in plant and equipment to add value to agricultural.
The research fellow said the reduction of the taxes on petroleum products was quite a complicated balancing act, since the government had to generate revenue to supplement what would be lost by the cut backs in some areas.
The Controller and Accountant-General, Mr Christian Sottie, stressed that the time had come for the economy to change its fundamental structures and explore new challenging and unpopular ways of doing things.
He made mention of putting up a water treatment plant to supply water to neighbouring Togo and ambitious investments in salt and oil palm as some of the areas in which the country had strength but which no financial intermediary or the government was ready to venture into.
Ghana and Senegal are known to be the only countries in West Africa that could produce salt in commercial quantities to meet the huge demand on the Nigerian market. Ghana has not been able to meet the Nigerian demand, leaving that country to import salt from far away Brazil.
The President of the ICA, Mrs Cecilia Nyann, called on all Ghanaians, irrespective of their political affiliations, to support the government to achieve the targets in the budget.
That, she said, was crucial to “move the nation forward in a faster way”.
She also asked the government to focus on the agricultural sector, with special attention on adding value to the country's produce.