By: Fred Yaw Sarpong
fsarpong@theeventpr.com
Government has been commended for its decision to place the country at a position where by the revenue generation of the country will be sufficient for developmental projects, rather than relying on aids and grants.
Many are of the view that this is a bold step because every country that depends on grants and aids, it difficult for such country to progress or grow. Announcing such measures is not critical than implementing them.
The finance minister, Mr. Ken Ofori Attah stated in the 2018 Budget Statement that government envision a Ghana beyond aid where within a generation, Ghana, through rapid and inclusive growth that respects gender equity, safeguards the environment and mitigates climate risk exposure, has attained upper middle-income status.
Speaking to Mr. Jerry Afolabi, a financial analyst and economist he explained that if the government is able to put the nation’s resources to judicious use and be able to manage prudently what we have as a country, government can be able to achieve some of these policies.
“It is important to note that whatever revenue we are generating as a country, we are able to put them into developmental projects, manage the expenditure well in such a way that it will yield growth to the country. This will help us develop without aid from our developed partners.”
According to him, in every economy how you prudently manage your expenditure or revenue or income will determine how fast you can grow.
He mentioned that the measures government want to pursue is good initiative. “But the only thing is that, specifically previous governments have proposed initiatives where they stick to move the country forward, but unfortunately on paper it is good but when it comes to implementation it is a problem, and that has been the problem of our country.”
“I’m just hoping that government will be able to implement this initiative as it has proposed. And once that is done, we are able to consolidate again as a country and can have some developmental promotion and progresses that will help and assist the indigenes of this country,” he stated.
Touching on revenue of this country whether it will be enough for developmental projects without aids and grant, Mr. Afolabi further stated that, African has been blessed with the best resources more than any other continent.
“Unfortunately, we always dwell on the raw state of the resources. But for Ghana to be able to progressively grow as a country or economy, then government have to be able to diversify some of the country’s resources, to be able to refine them into end finished product. This is where we can get value for what we have and become self dependent.”
“Because when you are selling your cocoa bean in it raw state, you don’t attract a lot of income as compared to probable when it is finished product such as chocolate and other cocoa products.”
He indicated that if the One-District-One-Factory (1-D-1-F) initiative, which government has earmark GHc450 million for it is implemented go well, it will yield positive results and some of the factories coming up will process the country resources into finished product.
“When we are able to do this as a country, it will open up the economy with more jobs and government will be able to generate a lot of revenue by taxing the people,” adding that these are areas where revenues can be generated for developmental projects (roads, hospitals, finance the Free SHS students) and it will go a long way to help the country.
“They are good and bold initiative but the implementation is what brings initiatives unfulfilled,” he told the Daily Express.
Presenting the budget to the legislature the minister said the government envision a Ghana beyond aid where government and the people of Ghana take full ownership and responsibility for the nation’s economic growth and transformation, in a new partnership with our development partners.
The minister said as part of the initiative, the government will position the country where each child will have the opportunity to graduate from at least a senior secondary school or polytechnic and be equipped with the skills to succeed in the modern work-place.
“A Ghana with an economy based on a transformed and highly productive agriculture, a dynamic and competitive manufacturing sector, and high-value services that provide productive employment opportunities for all our young people entering the job market.”
Also, to make Ghana where no one has to go hungry and everyone has access to the necessities of life including good health care, water, and sanitation in line with the Sustainable Development Goals (SDGs); a Ghana that provides reliable and affordable supply of infrastructure, including power; a Ghana that is a hub for manufacturing, financial services, and other high-value modern services; and a Ghana that is a preferred location for international businesses that are operating in mutually beneficial linkages with vibrant local businesses, and serving the rest of Africa and the global market.
The minister pointed out that it greatly appreciate and will continue to welcome assistance from Ghana’s external development partners, we envisage a new partnership where development assistance is targeted and strategically aligned with our national growth and economic transformation priorities.
The finance minister said as part of the measures to move away from aid, domestic resource mobilization will be enhanced through higher private savings and higher government revenues raised in a more efficient and equitable manner; and where there is resolute efficiency and accountability in the use of all public resources by government, including resources from external partners.
It said a “strong support will be given to the private sector, both domestic and foreign, to drive economic growth and job creation; and where our engagement with our external partner’s transitions from one based on aid to one increasingly based on trade and strategic political cooperation.”
“At the heart of our government’s vision for Ghana is an “An Agenda for Jobs: Creating Prosperity and Equal opportunity for All”. We are committed to pursuing this agenda of inclusive growth by implementing strategies, policies, and programmes to grow our economy and promote the creation of good jobs at a much faster pace than ever before.”
The implementation of all these initiatives has been concern to many Ghanaians. Dr. John Gatsi, an Economist and Lecturers at the Cape Coast School of Business said government will have a lot to do if the decision is to move Ghana beyond aid.
Government must consider more industries and manufacturing companies where most of the country’s resources can be put into finished products to benefit the entire nation.
“For now I don’t think we can manage our economy with support from our developed partners. We need their support until we are able to be independent. Nut that will not come easy,” he pointed out.
He advise the government to focus on how prevent leakages in the revenue sector, so that more revenues can be realized for developmental projects.
Preliminary data for September 2017 indicate that revenue for 2017 was below target. Total revenue and grants for the period fell short of target by 9.3% (an actual of GH¢28.4 billion, against a target of GH¢31.3 billion), while Total Expenditure (including arrears clearance) fell short of target by 8.1 % (an actual of GH¢37.7 billion, against a target of GH¢41 billion).
Meanwhile, in the 2018 government said based on the estimates for total revenue and grants and total expenditure, the 2018 Budget will result in an overall budget deficit of GH¢10.9 billion, equivalent to 4.5% of gross domestic product (GDP).
“Financing of the fiscal deficit will be from both domestic and foreign sources. Net Foreign Financing will amount to about GH¢3 billion (including a Eurobond of up to GH¢1.0 billion), equivalent to 1.2% of GDP. Net Domestic Financing will constitute about 73% of total financing and includes financing from bank and non-bank sectors, other domestic sources such as diverstiture proceeds andmineral royalty prepayment. The total NDF is estimated at GH¢8 billion or 3.3% of GDP,” the 2018 budget stated.
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