Fiscal policy has been explained as projected government revenue and expenditure. The government’s fiscal policy is normally designed according to the state of the country’s economy and takes into account the government’s socio-economic goals and objectives. In Keynesian economics, when a government changes its levels of taxation and spending, it influences aggregate demand and the level of economic activity. A Budget statement therefore is a document which highlights and outlines the methods and measures by which the government intends to achieve fiscal policy objectives.
It must be pointed out that fiscal policy and, for that matter, targets are projections rather than actuals. So what a government does is to set targets, which may be achieved or missed irrespective of how “smart” it is.
Parliament sat to approve the 2019 Budget statement, which was read before Parliament on November 15 2018. And as usual, the Minority in Parliament was expected to have its say before the august house went ahead to approve the statement. Sometimes it is very difficult to understand why the Minority still speaks though it really does not have anything to say.
For me, it was baffling to hear the Honourable Member for Yapei Kusawgu in the Northern Region, John Abdulai Jinapor, assert that the Minority was not going to take part in the Budget approval unless the Minister of Finance withdrew and effected certain changes that would suit the opposition’s taste.
Whose moral right?
Substantiating the Minority’s stance, Mr Jinapor tabled a list of points as reasons why the Minority should not participate in approving the Budget.
First, he said, the government’s overall GDP growth rate target of 5.6 per cent had not been achieved and the actual outturn of 5.4 per cent showed that the government had failed – though, indeed, the government was able to achieve over 96 per cent of its target. The opposition also said that the government’s non-oil GDP target was 5.8 per cent but the actual outturn 4.6 per cent, meaning also that the government had failed in this regard ‒ though the share achieved was around almost 80 per cent.
The Minority in Parliament again said that Ghana’s international reserves have plummeted from 3.9 months to roughly 3.6 months of import cover. Meanwhile, the 3.6 months of import cover about which they are whining is above anything that the National Democratic Congress was able to achieve in its entire eight years in office.
What a government does is to set targets, which may be achieved or missed regardless of how “smart” it is
They should go back and check their own performance before they begin to make noise about it. The NDC notched up just 3.0, 2.9, 3.1, 3.5 and 3.0 months of import cover for 2012, 2013, 2014, 2015 and 2016 respectively. Where then is the Minority’s moral right to make noise about a government which has achieved 3.6 months of cover?
The Minority was still making claims that the national debt stock had ballooned from GHC120 billion to about GHC170bn, an increase of GHC50bn. To them, this is a story that has never been told in Ghana’s political and economic history. The Minority went as far as to calculate the daily increase in our debt stock by this government at GHC70 million.
List of achievements
The irony, however, is that the NDC MPs were silent about the level where they picked up Ghana’s debt stock and the level where they left it. From GHC9bn in January 2009, they took the national debt to GHC120bn. This they achieved in just eight years, without giving any proper account for the money in terms of development projects or social intervention policies.
At the very least, under this government, you have a sense of where the funds are being invested; and I believe the Minority itself is feeling the benefits, if only it would be truthful about this.
At least we are aware of the government expending almost GHC10bn to clean up the mess it left in the banking sector. In addition, according to the Minister for Information, the government inherited a GHC5.2bn liability burden which has since been settled.
The Minister went further, pointing out pages 254-277 in the 2019 Budget statement to the House and saying it is here that the answers to the Minority’s queries about what has been done with the funds can be found. In these pages, diverse projects at various stages of completion are listed.
It is said that “book never lies”. If the Minority wishes to continue to dispute the content, it must present hard evidence. One could add to the list of infrastructure projects outlined in these pages of the Budget the already existing Nation Builders Corps (NaBCo), free senior high school education, stabilisation of Ghana’s power supply and even making electricity cheaper, restoration of teacher and nursing trainee allowances, et cetera.
The NDC side of the House is doubtless aware of these obvious facts but has chosen mischievously to ignore them.
Benchmarks
It is not unheard of for any government to miss specific targets in a Budget statement as external and internal dynamics exert an influence on economics and purported benchmarks.
In this regard, targets are merely wishful projections which may be met or missed. A government’s performance, therefore, is measured on actual outturn, the effort that went into the performance and the circumstances under which it was attained.
It is clear that this government has achieved a great deal that is worthy of praise, and in a short space of time. Or, at least, it is worthy of praise unless one is looking at events through political lenses ‒ the only kind that prevent people from seeing clearly even when the facts are obvious.
If this is the reason why MPs for the Minority side of the House were refusing to take part in the Budget approval process, they should think again.
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