Seth Terkper, former Minister of Finance
Government has criticized the previous Mahama-led National Democratic Congress (NDC) administration for failing to honour promise it made to Ghanaians that it will not repeat the reckless public expenditure that characterized the 2012 election year in 2016.
“In fact, virtually all the targets under the IMF programme, as at December 2016, have been missed. Fiscal indiscipline, once again, reared its head in the 2016 election year. Total projected expenditure for 2016 was GH¢43.9 billion (26 percent of GDP), but actual expenditure amounted to GH¢50.3 billion (30.2 percent of GDP),” President Nana Addo Dankwa Akufo-Addo disclosed while delivering the State of the Nation Address in Parliament yesterday.
He disclosed that “though the full facts of the situation have not been put before the Ghanaian people, it appeared from what we are finding out that some GH¢7 billion of arrears and outstanding payments circumvented the very public financial management system that was put in place to prevent such occurrences. These expenditures are being currently audited.”
He stated that the previous government had more than 10 times the financial resources that any other government has had since independence, adding that its management of the economy in the run-up to the 2012 presidential and parliamentary elections resulted in a quagmire that necessitated the urgent intervention of the International Monetary Fund (IMF) in 2014.”
Revenue under NDC
Nana Addo said in addition to the foregoing, revenue performance for the year was poor.
“The total revenue target for our country was GH¢37.9 billion (22.7 percent of GDP), but the actual revenue came in at GH¢33.2 billion (19.9 percent of GDP).
“Mr. Speaker, the combination of higher expenditures and lower revenues than projected resulted in a significant increase in the budget deficit for 2016. As compared to a target of 5.3 percent under the IMF programme, the fiscal deficit for 2016 was 9 percent of GDP on a cash basis and 10.2 percent of GDP on a commitment basis (that is on the basis of expenditures undertaken but not yet paid for).
“It should be recalled that at the time Ghana entered into the IMF programme to restore fiscal discipline, the fiscal deficit was 10.2 percent of GDP. It is very clear, therefore, that the objectives set out in the programme have not been achieved.”
The president pointed out that the increasing fiscal deficits under the NDC administration were financed by increased borrowing, reiterating that Ghana’s total debt stock was GH¢9.5 billion as at the beginning of 2009.
By Samuel Boadi