Ghana’s new government on Th ursday unveiled its maiden budget that, it said, would cut expenditure given the difficult economic situation the country was going through.
Finance Minister Kwabena Duffuor presenting the 2009 budget to parliament said the fiscal deficit would be cut to 9.4 per cent of gross domestic product (GDP) by the end of 2009, down from 14.9 per cent at the end of 2008.
He said this was the only option to ensure that macroeconomic instability did not hurt the country’s poverty reduction and growth agenda.
Duffuor, a former governor of the Central Bank, said the West African country’s total debt now amounted to $8 billion dollars, 51 per cent of it owed to foreigners.
“Over the medium term we plan to bring the deficit down to 3-4 per cent of GDP,” Dr. Duffuor said.
The government is also forecasting the economy to grow by 5.9 per cent in 2009, down from a provisional growth rate of 6.2 per cent last year, while inflation is also projected to close the year at 12.5 per cent and gross international reserves of more than two months of import cover for goods and services.
Dr. Duffuor said the government would provide local industries with incentives to create jobs and promote education.
He also announced the creation of a special fund to enable it to repay the $750 million Eurobond, which was issued in 2007 and is due for repayment in 2017.
Revenue for 2009 fiscal year is projected at GH¢9,793.1 million, equivalent to 45.8 per cent of GDP. This is made up of total revenue of GH¢5,935.1, grants of GH¢1,301.0 and other receipts of GH¢2,557.0
He reiterated government’s pledge to invest in people through the provision of better quality social services, create job opportunities and provide justice for all. Government, he added, would also build capacities and energise the public sector to meet emerging challenges.
“We will do things differently and it will not be business as usual,” he said, adding that mediocrity, waste and profligate expenditures would not be countenanced.
“We will ensure good value for every expenditure of the taxes we collect from the people of Ghana and utilize it to deliver better services”.
“Effectiveness and efficiency are what we demand from everyone. In that regard, we will monitor government institutions to ensure that they deliver on their mandate. Special efforts will be made to refocus institutions to make them more results oriented and collectively, we will provide a better Ghana for Ghanaians.”