Transcript Of Dr. Mark Assibey-Yeboah's Contribution To The Debate On The 2013 Budget

Instead of presenting a job creation budget, we were presented with a job killing budget. Yeah yeah. The prudent management of the economy that was seen between 2001 and 2008 under President John Agyekum Kufuor's leadership has given way to excessive borrowing, increasing national debt stock, reckless spending and payment of dubious judgment debts.

Meanwhile, Mr. Speaker, Ghanaians face high unemployment and rising cost living. As a matter of fact, for the first time in Ghana's history, there is an association of unemployed graduates. Mr. Speaker, the international rating agency, FITCH Ratings has revised the outlook of Ghana's long term foreign and local currency issuance default ratings from stable to negative.

What this means is that, the cost of borrowing is going to go up for the government. Simply put, Mr. Speaker, the economy is in a mess.

2012 was a year of missed targets. In the budget presented for the year 2012, GDP was expected to grow by 9.4% but actual growth turned out to be 7.1%. In the last three years of the NPP led government, in 2006, 2007, and in 2008, the economy grew respectively by 7.6%, 7.5% and 8.4% even when we didn't have oil.

Mr. Speaker, the agriculture sector was projected to grow at 4.8%, in actual fact, it grew at 2.6%. This is because, government is not making the needed investments in agriculture.

Again, if we are not careful, we will gradually slip into the DUTCH DISEASE SYNDROME.

Mr. Speaker, when the Chairman of the Finance Committee was speaking, he said that we have to ask what is happening so that the industry sector declined from 41% to 7%.

Well, I have the answers for him. What is happening in the industry sector is that water supply is inadequate, electricity supply is erratic, tariffs are all levied high and the PURC intends to increase it some more.

The cost of borrowing is even getting very high. Mr. Speaker, is this the better Ghana that we were promised? - big NO response from the Minority NPP.

Mr. Speaker, let me talk about the public debt. I am sad to say that Ghana is back to HIPC. Ghana's public debt has increased from 9.6billion Ghana Cedis to 33.5billion Ghana Cedis as at 2012.

This is a whopping 248% increase in the debt in four years. Mr. Speaker, as we speak right here now, each Ghanaian owes GH1, 340.00.

INTERVENTION BY MAJORITY LEADER, Dr. BENJAMIN KUNBUOR

Mr. Speaker, I think the honourable member is misleading this House. And the reason is that I know a large number of Ghanaians that owe more than GH500, 00. I even know a number of Ghanaians who owe GH1million so to say that all Ghanaians is not accurate.

Dr. Asibbey – the 248% increase in the debt does not include the CDB Chinese loan. Mr. Speaker, why must my 10 months old child at home be saddled with this debt even before he starts walking?

As of 2008, the deficit was 9% and Ghana was classified as HIPC. In 2012, the deficit was 12% and we are coming to 9% again in 2013. So, without a doubt, Mr. Speaker, Ghana again is a HIPC country.

WEST AFRICA MONETARY ZONE
When we talk about the West Africa Monetary Zone and their convergence criteria, Mr. Speaker, we are supposed to have a single currency - the ECO by January 1, 2015.

All our neighbours are performing well. As a matter of fact, Liberia had a budget surplus in 2012, Nigeria reduced their deficit to 2.17%, Sierra Leone also did better, Ghana had a deficit of 12%. My question is, are they more West African than us? What is it they are doing that we cannot replicate?

Mr. Speaker, we missed all the convergent criteria. The only one I know that my colleagues on the other side will talk about is the single digit inflation. Let me address that single digit inflation hoax - that single digit inflation is a hoax.

Mr. Speaker, there are established relationships in economics. If you have low inflation, there have to be attendant low interest rates, low cost of living, stable currency. It is only in Mills and Mahama's Ghana that you have a single digit inflation that the cost of borrowing is 22.9%.

Mr. Speaker, the single digit inflation that is being talked about is a hoax.

INTERVENTION BY MINISTER OF FINANCE, SETH TEKPER
The said the correlation which the Hon. Member is speaking about is not accurate. It is such that if you go back between May 2009 and early 2012, there is a correlation which is quite clear between the interest rates, the fall in inflation. It is when we started using interest rates a measure to correct the economy that that correlation was misplaced.

DR. ASSIBEY-YEBOAH
Thank you Mr. Speaker,  I think that the intervention that the minister made was totally unnecessary. I have in my hand, Mr. Speaker, in 2010, the rate of inflation was 8.6%. The Treasury Bill Rate was 12.3%, inflation has only inched up to 0.2 to 8.8% and the government itself is borrowing at 22.9%.

Do we call this a correlation? Mr. Speaker, where did we go wrong - it seems we are blessed but cursed with poor management.

For the first time, we are an oil exporter. Mr. Speaker, our major exports have seen record prices on the world market. All of these windfalls have not benefitted the Ghanaian citizen.

In any case, I will prescribe some solutions to the Minister - Mr. Minister, please limit the fiscal deficit, reduce the spending - all that spending on MASLOC, creation of the unnecessary ministries, tell the President to cut them. Let's follow the role of the NPP and pass the FISCAL RESPONSIBILITY ACT.

If you pass the FISCAL RESPONSIBILITY ACT, then we can check the needless and reckless spending that we've seen over the past year.

 
Missing funds from the 2013 Budget Statement
Kwaku Kwarteng, Obuasi West MP
Mr. Speaker, there are serious irregularities in the 2013 Budget Statement, which could border on financial misappropriation, and which require immediate investigation.

1. PETROLEUM DEBT RECOVERY LEVY COLLECTED IN 2012.

Throughout 2012, and indeed, up to date, there has been a Petroleum Debt Recovery Levy of 8 GHp/litre on petrol, diesel, and unified; 5 GHp/kg on LPG; 3 GHp/litre on MGO local; and 4 GHp/litre on residual fluid oil. The National Petroleum Authority has officially provided the figures in the table below as the national consumption of petrol, diesel, LPG and MGO. From this information, the total debt recovery levy collected for the four products can be computed as follows:

PRODUCT    2012 NATIONAL     DEBT RECOVERY            DEBT RECOVERY

CONSUMPTION     LEVY RATE                        LEVY COLLECTED

Petrol              1,328,080,745 litres    8 GHp/litre                  GH¢ 106,246,460

Diesel              1,550,593,091 litres    8 GHp/litre                  GH¢ 124,047,447

LPG                265,039,887 kg           5 GHp/kg                    GH¢ 13,251,994

MGO              47,477,095 litres         3 GHp/litre                  GH¢ 1,424,313

         TOTAL GH¢ 244,970,214
The national consumption figures for unified and residual fluid oil in 2012 have not been given by the NPA, hence their exclusion from the computations. Thus, the debt recovery levy collected for petrol, diesel, LPG and MGO alone in 2012 was GH¢ 244,970,214.

Strangely, on page 276 of the 2013 Budget Statement, government has stated the amount of petroleum debt recovery levy collected as zero Ghana cedis (GH¢0.00). This is unacceptable.

Mr. Speaker, many of us were witnesses to the public dispute between the Minister for Energy and the MD of TOR about the whereabouts of the petroleum debt recovery levy collected by this government. There is the urgent need to look into the disappearance of the petroleum debt recovery levy from the 2012 finances of the country.

2. THE HEDGE FUNDS
Our hedging programme is an insurance policy. We pay premiums so that when the price of oil exceeds an agreed threshold, we receive some hedge proceeds into our Hedge Fund. In 2012 we projected a receipt of GH¢55.3 million.

It is reported in paragraphs 139 and 140 of the 2013 Budget Statement that Ghana's hedging programme was very successful in 2012 and that, we will continue with the programme in 2013. What this report means is that we received more money into the Hedge Fund than we paid out as premiums. The net proceeds, which is our profit, should have gone into subsidising high fuel prices resulting from the high oil prices internationally.

But strangely, on page 276 of the same 2013 Budget Statement that reported the success of the hedging programme, it is stated that our hedge profit was zero Ghana cedis (GH¢0.00). How come? If the 'highly successful' hedging programme could not bring us the target amount of GH¢55.3 million, it should, at least, have brought us something.

In any event, if the hedging programme was successful, why is the hedging proceeds not being used to subsidise fuel prices? Why are we passing on full cost of fuel on to consumers?

We should immediately investigate the Hedge Fund to ascertain the whereabouts of the monies that have been coming into it since it was set up by this government.

I thank you, Mr. Speaker.