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07.12.2011 Business & Finance

Parliament concludes debate on 2012 Budget

Parliament concludes debate on 2012 Budget
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Accra, Dec. 6, GNA - Dr Kwabena Duffuor, Minister of Finance and Economic Planning, on Tuesday told Parliament that the National Democratic Congress (NDC) Government was not running the economy but managing the sick economy left behind by the New Patriotic Party Government.

He said the Government had the skills and ability to make a difference in the lives of Ghanaians and cited the 13.6 per cent growth taking place in a non-inflation economy.

Dr Duffuor made the observation on the floor of Parliament on Tuesday, when he appeared to wind up the debate on the 2012 Budget on the theme: “Infrastructure Development for Accelerated Growth and Job Creation.”

He observed that the NDC took over power at a time the economy had reached an intensive care stage “but it was revived and the patient was up and running.”

Dr Duffuor said: "I am not telling Ghanaians about the growth of the economy but the whole world knows that it had grown to 13.6 per cent".

The Finance Minister said all the four convergence criteria were expected to be met by December 2011 while inflation had been brought down to eight per cent.

Dr Duffuor noted that not more than GH¢ 506 million was derived from the petroleum sector but in 2009, GH¢ 620 million was used to clear arrears.

Mr Osei Kyei Mensah-Bonsu, the Minority Leader, said Government had succeeded in holding down inflation, however, arrears due from Government to Ghana Commercial Bank, SSNIT, District Assemblies Common Fund, GETFUND, public sector employees, Tema Oil Refinery by way of subsidies to Road Fund remained humongous.

"If government has paid the arrears, what would be the effect on inflation that will be the real value of the cedi?”, he asked.

The Minority Leader said it was important not to be selective but to be comprehensive about economic issues.

Mr Mensah-Bonsu said the International Monetary Fund's IMF's economic outlook for 2011 in respect of developing countries, which included Ghana, and in particular for Sub-Saharan Africa, indicated that growth prospects was going to be resilient for 2011 and 2012 propelled by high commodity prices.

He said the resilience, which the Finance Minister spoke about, was not as a result of prudent management and not any magic wand from the so-called Better-Ghana mantra.

Mr Mensah-Bonsu said oil exporting economies in the region that were in stable production, were predicted to had grown their GDP by a percentage point, over and above the 2011 growth rate.

He said if Ghana's projected GDP growth rate was going to drop from 13.6 per cent to 9.8 per cent, the Finance Minister owed the nation a better explanation for this situation.

The Minority Leader noted that in the 2012 Budget, the Finance Minister was clear on the three billion loans by the Chinese Development Bank yet it was the cornerstone of the 2012 development component of the budget.

Mr Mensah-Bonsu said that budget information needed to be accurate, reliable and comprehensive and that in the area of petroleum revenue, government had not been forthcoming with full disclosures of facts, as Government had failed to inform Parliament about how allocation to Ghana National Petroleum Company was used.

He said transparency, availability of information, and integrity of fiscal information were necessary because the budget figure for total expenditure in 2011 end-year projections including arrears clearance and tax refunds had been quoted as GH¢ 15,274.6 million and in another page the same figure had been quoted as GH¢ 15,565.5 million.

The Minority Leader noted that the variation was GH¢ 290.9 million or GH¢ 2.91 trillion, and questioned if the amount had been spent or not, and if it had been spent how did it resurface.

He said different figures had been quoted for the total expenditure component of the 2011 revised budget estimates and that 32,358 civil service staff were transferred to local government service in 2011.

The Minority Leader said another page of the financial statement stated that 30,000 civil service staff were transferred and wanted to known what happened to the 2,358 staff and said "a budget should have integrity".

Mr Cletus Apul Avoka, the Majority Leader, said the Minority, being a party in-waiting to form the next government, should have given Ghanaians an alternative budget after describing the 2012 Budget as recycled one.

He explained that it was a rolling budget, a medium term expenditure framework, which meant that projects started would have to be continued by the succeeding government until completed.

"So long as the projects remain uncompleted they have to be budgeted for in the successive budgets until they are completed. It is a constitutional provision that enjoins government that inherit uncompleted projects and programmes to capture them," Mr Avoka said.

The Majority Leader said Government was committed to eliminating ghost names from the pay roll, reduce corruption, and improve the revenue base, and gave the assurance that though 2012 was an election year, the NDC administration would be disciplined to chart the course without destabilising the economy.


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