Voice from Afar: We cannot be complacent about the economic situation
I do not share the gloomy forebodings of some opposition commentators. But with strikes and rumours of strike, high unemployment, unpopular high utility price increases and fall in the world price of some of our major exports, it would be irresponsible not to seriously seek ways to arrest the decline in confidence and fortune and to improve the country’s economy.
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With so many experts and learned men and women in the Ministry of Finance and Economic Planning and in other financial institutions, I could hardly believe the strange happenings in the nation’s financial administration. I was reluctant to betray my ignorance by asking many questions until I read a learned article in the papers, suggesting that we should forecast our income before we budget expenditure.
In the simple old days, we estimated our income and matched it with expenditure. If expenditure had to be increased above income to grow the economy and improve social services, the level of income was raised through taxation and borrowing.
Actually in those early days, the State grabbed the shortfall from the cocoa farmers. This was done by raising the tax on cocoa produced and exported. The tax was paid by the Cocoa Marketing Board.
Cocoa farmers, therefore, involuntarily financed much of the shortfall in the budget.
Drawing up the budget was then not as complicated as it is today. Even I could, therefore, be asked to prepare the draft of the last budget before independence in 1955.
My only qualification was that I knew a little Mathematics and Statistics. Common sense and observation suggested that I should encourage those who had been involved in the work to continue, while I learned from them and gave them directions to achieve policy ends.
I found my chief subordinate, Mr P.T.A. Steiner, excellent in knowledge and competence. I, therefore, made him do much of the work, while I took the credit!
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The budget was implemented in a simple way. Discipline was maintained. Even to modify approved expenditure, permission had to be obtained from the Ministry of Finance and Parliament.
As principal secretary, I was the accounting officer for my ministry or department. Principal secretaries were, therefore, part of the financial administration.
Ministers who found financial discipline irritating were often in conflict with civil servants. Thus began the antagonism between ministers, as well as political heads of institutions, and civil and public servants.
Some ministers and political heads often wanted to establish projects and start construction, irrespective of budget constraints, to show their concern for the needs of the people and to enhance their popularity and prospects for re-election.
It appears that this practice still continues. Parties are judged by the projects they construct while in office.
How the projects aided systematic development or caused hiccups to economic progress is ignored. It appears that the irritation with discipline by powerful party political interests, which began in a small way in the early years of independence, has greatly increased and is responsible for a great deal of the present financial disarray which besets the economy.
I often wonder whether or not any orderly system prevails in the institutions of public finance. It appears that these institutions are manned by proud, independent know-alls in their respective fields.
They would not conform to administrative rules, regulations, procedures and delivery dates. How then do we explain how and why people are appointed without being paid for a year or even two years?
The recent strike of junior nurses vividly exposes the failure of the nation’s financial administration.
Authority made the unhelpful comment that the nurses should not have gone on strike because the Ministry of Finance and Economic Planning authorised payment the previous day and the Korle-Bu authorities would pay the striking nurses their endowment arrears of many months.
I suppose the striking nurses were expected to be amused when they were not paid as expected because one cheque signatory was not available. Some administration!
I was shocked to find that the non-payment of government workers for months or years has persisted for many years. This is inexcusable.
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Perhaps a solution lies with us the people. We should demand that every month the Accountant-General issues a certificate that all government employees and pensioners and others paid from the Consolidated Fund have been paid before ministers and Members of Parliament are paid!
Hopefully, such a measure may reduce indiscipline in financial administration, which is what Ghanaians.
Our debts have greatly increased by borrowing;
cost of borrowing for business is too high; debts to government contractors and the like are not met as are statutory obligations like payment of District Assembly Common Funds.
All these are matters of concern. But the problems caused can be contained and some turned to profitable ends if political leaders and officials maintain financial discipline by strictly conforming to procedures, rules and regulations. I am assuming of course that leadership is good and policies appropriate.
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Political leaders who want to do much are often problems for financial administrators. President Nkrumah came out constantly with ideas and proposals which demanded money. But he was politely reminded of the rules he had sanctioned. Eventually parliament agreed to a contingency vote for him.
He had absolute discretion for its use. But he used it for beneficial national programmes. The budget may likewise make provision for unforeseen necessary expenditure. Expenditure beyond this provision leads to serious problems.
Salary payments should not normally be envisaged under contingencies. Forecast for salaries should be fairly accurate. People should not be employed thoughtlessly.
Payments should not be made without appropriate authorisation. Officials who advise wrongly should be severely reprimanded if not sacked. There should be an approved establishment of employees and this can be adjusted as new projects and institutions are approved under the budget.
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Salary reviews should take account of numbers employed and revenue expected. Inability to pay increases agreed in negotiations is a serious indictment of official technical competence and ministerial responsibility.
Contracts and other financial commitments should be rigorously negotiated and the outcome recorded. Payments should be in accordance with the agreement and those who flout this rule or procedure and land the nation in debt should be charged with causing financial loss to the State.
In particular, those who make payments without authority and lawful commitments should be charged with the appropriate offence.
Likewise, those who do not honour legitimate commitments and therefore land the nation in judgement debts should be punished for gross dereliction of duty.
The experts may consider the economy to be in fine shape. But to those who are not paid according to salary reviews and agreements; to the unemployed; and to those who are at their wits’ end to make ends meet, the economic downturn should be arrested as a matter of urgency.
The country deserves better and we have the means to make life more pleasant for Ghanaians.
Source: Daily Graphic/Ghana