President directs Cabinet not to compromise fiscal stability Featured

By Kwasi Frimpong November 04, 2019 776 1 comment

The Minister of Information, Kojo Oppong Nkrumah, yesterday disclosed that Cabinet over the weekend completed its 64th regular meeting and 9th retreat to examine the status of the economic turnaround programme, and approve a framework for the 2020 Budget.

The meeting, which was chaired by the President Nana Addo Dankwa Akufo-Addo, focused on examining the results of the government’s efforts at correcting the economic challenges it inherited at the start of the administration’s work.

It also focused on laying down some red lines in the preparation of the 2020 Budget.

Strong fundamentals

Mr Oppong Nkrumah stated that the evidence is that the fundamentals of the economy have been significantly strengthened.

He used the opportunity to outline some successes chalked by the government.

He spoke about reduction in inflation from 15.3 per cent to 7.5 per cent, rebound of the economy from a stagnating growth of 3.4 per cent to above six per cent, reduction of annual budget deficit from 9.3 per cent in 2016 to 4.7 per cent this year, with a legal commitment to ensure that it doesn’t exceed five per cent in 2020.

He also spoke about the reduction in interest rate from 25.26 per cent in 2016 to 19.34 per cent in 2017 and 15.20 per cent as at September this year.

Regarding the country's gross international reserves, which constituted 3.5 months of import cover as at December 2016, Mr Oppong Nkrumah said, "with gains in exports, the Akufo-Addo administration has increased it to 4.1 per cent of import cover as at September, despite Bank of Ghana (BOG)'s support during some of the trying moments of our currency."

Flagship programmes

Mr Oppong Nkrumah revealed that Cabinet was as well pleased to note that 16 flagship programmes are being executed despite the fiscal challenges facing the country.

"Key among them is the fact that the administration’s Free SHS programme, which is designed to ensure that every Ghanaian child, regardless of family wealth, place of birth or gender, benefits from basic education to the senior high school level, is working smoothly nationwide," he said.

He added that the President has instructed that no resource should be spared in ensuring that the 1.2 million Ghanaian children benefit fully.

He also spoke about the Planting for Food and Jobs (PFJ) programme, saying the programme has been "largely successful, translating into increased food production with its attendant reduction in food inflation.”

He indicated that the government's Infrastructure for Poverty Eradication Programme (IPEP) was noted to be progressing nationwide.

Directives

The Minister said, in preparing the 2020 budget, the President has given firm directives that the fiscal stability, which has been restored, must not be compromised.

The Fiscal Responsibility Act, which is the new anchor of discipline for the government of Ghana, prohibits any government from incurring a deficit beyond five per cent of gross domestic product (GDP).

The President has mentioned that election year pressures should not and will not cause the treasury to throw away fiscal discipline.

Revenue targets

According to Mr Oppong Nkrumah, the need to meet revenue projections is critical in ensuring that "our desires as a nation are met."

“The President has insisted that everyone must be encouraged and aided to pay their fair share in reaching our national goals. We all have to rally around that call,” he said.

He indicated that this is a critical feature of the Ghana Beyond Aid agenda, “which requires us to focus more on generating internal resources to meet our key obligations as a state.”

Despite the pressures that come with election years and the desire to spend more by various governments, the Minister stated, statutory obligations would be carried within the national resource envelope.

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