‘Senchi Report’ Indicts Gov’t

The ‘Senchi Report’, a product of the recent National Economic Forum held in Senchi in the Eastern Region, has indicted the John Dramani Mahama-led National Democratic Congress (NDC) for its unbridled spending and virtual loss of credibility with public finances. According to the group of key stakeholders who were whisked to Senchi from May 13 to 15 this year, the Mahama administration’s excessive spending has undermined its supposed commitment to ending the dire economic difficulties facing the country. “Excessive spending in relation to the political cycle has undermined confidence in the commitment to macroeconomic discipline and stability,” stated aspects of the ‘Senchi Consensus’ which was released last week. “Budget outcomes have deviated significantly from forecasts and therefore have tended to be perceived as not dependable. Mid-year reviews have sometimes been used to introduce new policies rather than for an assessment of policies outlined in the budget,” the report indicated. According to critics, the government’s mishandling of the economy had resulted in astronomical fuel and utility price hikes, tax increases, job losses, high unemployment rates, the current poor state of the National Health Insurance Scheme, rising inflation and the rapid depreciation of the cedi against major international currencies. The group of experts at Senchi noted in the report that the structure of government’s spending was a major constraint on fiscal policy. The report explained, for instance, that “In the 2013 budget, Government expenditure on two items–the wage bill and interest costs on the public debt –absorbed 57 percent and 25 percent, respectively, of total Government revenue, leaving only 18 percent for other budgetary items, including capital expenditure.” This spending pattern has caused the Mahama administration to default on wiring a sum of GH₵ 2 billion into virtually all the statutory funds, including the District Assembly Common Fund (DACF), the Ghana Educational Trust Fund (GETFund), The National Health Insurance Scheme (NHIS), and the Road Fund, among others. “For reasons of this ‘structural’ problem, transfers to these statutory funds have usually not been met and therefore are in arrears, meaning that the services that were to be provided, e.g. National Health Insurance Scheme, which now covers an estimated 10 million people, are underfunded. Similarly, the objectives of programmes funded from earmarked revenues may be compromised. Given this structure of the budget, members noted that Government spending has become an ineffective tool for the realisation of the important objectives of growth and sustained improvement in social welfare,” the report stated. Last week, Vice President Dr. Kwesi Amissah-Arthur presented the final report of the Senchi Economic Forum to President John Mahama who gleefully held it to the media cameras, despite its indictment on his administration. This notwithstanding, the government believes the report presents necessary guides to changing the dwindling fortunes of the country. The government announced last week that it had set up the Senchi Implementation Committee, to ensure that the ‘Senchi Report’ was formulated into government policy. “I am chairing the strategic advisory committee which is to work on policy alternatives that Ghana needs in a short-term to overcome the economic challenges,” President Mahama announced when Mr. Claude Maerten, the European Union (EU) Head of Delegation, called on him at the Flagstaff House in Accra. The harsh socio-economic problems plaguing the Ghanaian economy forced the government to convene the National Economic Forum that brought together stakeholders from the public sector, the private sector, political parties, civil society organisations, policy think-tanks, professional associations, traditional leaders, the security services, the Judicial Service, religious groups, and some key individuals in Senchi. The report lists a number of problems that are responsible for the economic challenges that have sparked several civil protests in the past few months. The report added that the Mahama-government was prone to explaining the problems away as being caused by external factors. “There is a general perception that Government tends to explain economic difficulties more by attributing causes to external factors than to domestic policies. This leads to complacency and inappropriate responses,” the report stated.