The John Institute of African Politics and Society has observed that, the current discussions on the 2013 budget, in and outside Parliament, have rather focused unfairly, on the 12 per cent deficit recorded in the finances of the country in the previous financial year.
It said, though, several corrective measures had been outlined by the Finance Minister, Mr Seth Terkper, when he delivered the first budget of the government of President John Mahama on Tuesday March 5, 2013, the wrong impression had been created that this deficit was the single defining feature of the proposals now before Parliament for approval.
In a statement signed by Colin Essamuah, Ekow Nkrumah and Emmanuel Wiafe, all of the Institute, it said it was not true that the quantum of the deficit was such as to crowd out other needful expenditures as efforts were made to bring it down to manageable levels.
According to the Institute, the deficit in 2008 when the government of President John Agyekum Kufuor was exiting from office was double that of 2012, a whopping 24 per cent saying “It is noteworthy that both 2008 and 2012 were election years”.
It further said that comparable figures for Greece and Spain in the European Union were far bigger than the case in Ghana which had become the whipping-boy of the opposition to the government of President Mahama.
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The statement also cited the US deficit as around 100 per cent.
The John Institute was of the firm opinion that deficits constituted a problem only when the activities that the resources were applied to fund were unproductive of either tangible goods and services, or the promotion of social peace.
Even in strict public finances, the Institute said that a sustainable debt profile was a positive indicator for assessing the extension of credit.
It said, the hoary threat of HIPC, was also baseless as the HIPC programme was touted in 2001 as not only a response to profligate spending, but an intelligent tool of economic management.
“We note that these days, the Finance Minister at the time who opposed it, is claiming credit for HIPC even as his party is strenuously giving the impression that HIPC is bad for the economy. The records show quite clearly that the decision of the government in 2001 to go HIPC was solely that of President Kufuor, and it was opposed by all his ministers without exception,” the statement pointed out.
The John Institute noted that the debate over the deficit, and related problems in the energy, water and other sectors of the economy seem to have overlooked the single most positive aspect of the shouting matches and further stated that “ this country is experiencing growth at a rate that we are finding difficult and problematic to keep up with.”
Deficit financing of the budget in this environment of rising expectations and population growth, according to the John Institute, would continue to be a feature of national finances for some time to come.
Fortunately, it said that other resources coming on stream were certain to make current budgetary difficulties a passing phase and would in the very near future, give us capacities ready to partner a future of continuous growth, to bring prosperity to Ghanaians.
The John Institute was also pleased to note the full participation of the New Patriotic Party (NPP) Parliamentary Minority in the presentation and debate on the financial statement of the government saying “it has brought to a welcome close, the unprofitable and awkward challenge to the legitimacy of President Mahama by NPP MPs who had earlier boycotted sittings in the House, in solidarity with the election petition ongoing in the Supreme Court.”
The Institute had in an earlier statement predicted this turn of events, and wholeheartedly congratulated the NPP MPs for putting country and people above party and personality.