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21.10.2010 Business & Finance

Budget 2011 Must Ensure Growth

By Daily Graphic
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The government has indicated its readiness to present the 2011 Budget to Parliament by November 30, in line with Article 179 (1) of the 1992 Constitution that requires that the financial statement and economic policy of the government be presented to Parliament a month before the end of the fiscal year.

The year 2011 is an interesting one, as it ushers the country into the league of oil-producing countries and marks the start of the implementation of a new medium-term development agenda of the government — the Ghana Shared Growth and Development Agenda.

The Ghana Statistical Service (GSS) is at the same time rebasing the economy which, according to studies from many quarters, indicates the possibility of an enlarged Gross Domestic Product (GDP) that makes the economy larger, placing it into a middle-income status.

Although this year has been challenging, the government has managed to stabilise the economy, reducing inflation from the end-2008 figure of 18.1 per cent and 20.7 per cent in June 2009 to 9.38 per cent in September this year.

The exchange rate has experienced relative stability for the past 18 months and interest rates have fallen drastically from the region of 28 per cent at the end of 2008 to 21.2 per cent at the end of September, while gross international reserves have improved significantly from barely two months of import cover in June 2009 to over four months of import cover in September 2010.

The DAILY GRAPHIC believes that these commendable achievements should now be translated into tangible benefits for the expectant public.

This is because for all this while that the stability has been pursued through austerity measures, growth, which creates employment and better standard of living, has been somewhat sacrificed, as the figures suggest.

The economy achieved a 4.5 per cent growth rate in 2009, down from the 7.3 per cent at the end of 2008 when it was expected to achieve growth rates in the region of 6.5 per cent.

However, the paper takes a cue from assurances from the Minister of Finance, Dr Kwabena Duffuor, that the economy was ready for growth to be achieved through the implementation of the 2011 Budget.

The budget, he said, would focus on agriculture, human resource development, oil and gas, among other areas, to create jobs and employment for the youth.

It is the view of the DAILY GRAPHIC that the policy of modernising agriculture should be pursued with all seriousness and efficiency to lend credence to the refrain that agriculture is the backbone of the economy.

Over the years, agriculture has contributed an average of 30 per cent to the GDP, at an average growth rate of 6.2 per cent, powered by the cocoa sub-sector. This trend needs to be reversed.

The other sub-sectors of agriculture should be strengthened to enable the entire sector to attain its potential as the backbone of the economy.

The 2011 Budget needs to promote and give incentives for large commercial farming and continue the irrigation policy introduced in the budgets of 2009 and 2010.

The need to emphasise and concretely develop the agricultural sector is of paramount importance because the sector employs the greater chunk of Ghanaians and so improving the lot of farmers will mean dealing with poverty head on.

This will also attract many youth into the sector.

The DAILY GRAPHIC, therefore, calls on the government to use the 2011 Budget to drive agricultural growth to create jobs for the teaming youth in rural Ghana and stop their migration to the urban areas in search of non-existent jobs.

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