Posted on August 5, 2020 by Pnafrica
The Parliament of Ghana has approved the Mid-Year Review of the Budget Statement and Economic Policy of the Government of Ghana and has given permission to the Finance Minister, Ken Ofori-Atta, to spend the sum of GHC 11,896,477,566.00 as Supplementary Estimate for the 2020 Financial Year.
The aim of this Supplementary Estimate is to commit additional resources as outlined in this Mid-Year Review to fund additional expenditures resulting from the revisions made to the 2020 Budget due to COVID-19, to bring the revised Total Appropriation for 2020 to GH¢109,933,169,924. 445.
The Minister for Finance in his presentation of the Mid-Year budget last Thursday said in order to deal with the COVID-19 pandemic and to ensure that the economy is stabilized, revitalized and transformed to protect lives and livelihoods, the Government has to make some specific expenditure items.
These expenditure items include the COVID-19 Preparedness plan; construction of 111 district and regional health infrastructure; payment of allowance of 50% of basic salary for frontline health workers; sanitation; fumigation of markets schools as well as the procurement of PPEs and support for households such as food packages and hot meals for the vulnerable among others.
“Mr. Speaker, the revisions made to the 2020 fiscal framework have resulted in an increase in the 2020 Appropriation of GH¢98,036,692,358 that was approved by this august House in December 2019. Mr. Speaker, the aim of this Supplementary Estimate is to seek parliamentary approval to commit additional resources, amounting to GH¢11,896,477,566 as outlined in this Mid-Year Review to fund additional expenditures resulting from the revisions made to the 2020 Budget, consistent with Article 179 (8) of the 1992 Constitution.
“This will bring the revised 2020 Total Appropriation for 2020 to GH¢109,933,169,924. 445. Mr. Speaker, with our commitment to deal with this pandemic to ensure that the economy is stabilized, revitalized and transformed to protect lives and livelihoods,” he said.
The motion for the request which was moved in Parliament by the Finance Minister, Ken Ofori Atta on behalf of the President on Thursday, July 23, 2020, was seconded on Monday, July 27, 2020, by the Member of Parliament for New Juaben South and Chairman of the Finance Committee, Dr. Mark Assibey-Yeboah to herald the debate on the motion.
The debate was characterized by heated arguments for and against the motion by the Minority National Democratic Congress (NDC) and the Majority New Patriotic Party Members of Parliament who were at each other’s throat with each touting its political party as superior managers of the country’s economy based on their track record in the helm of affairs.
Specific to the amount approved, the Minority was of the view that, though Parliament has approved different sums of money for the Government to undertake certain expenditures in the economy, including COVID-19 related expenditures, there is very little to show for it.
The Minority was also concerned about the ballooning of the country’s debt ratio under the current government which has earned the country an unenviable place in the top 8 African countries in debt distress.
However, the Majority side on the other hand vehemently defended any allegation of mismanagement of the economy and justified the need for the requested amount by the Government to mitigate the effects of the Novel CoronaVirus on the socio-economic life of the nation.
At the conclusion of the debate on the budget on Wednesday, July 29, 2020, Parliament gave its blessing to the request by the Government after the Minority and Majority Leaders had taken their turns to add their voices to the debate to drive home the position of their caucuses on the budget review and the estimates.
The Minority leader, Haruna Iddrisu, for instance, served notice that the Minority will not participate in the suspension of any law at the convenience of Government, but will ensure that the Minister for Finance is in full compliance with the laws of the country. He cited the Minister for violating the Constitution and other Acts when under his watch the Government borrowed more than 5% of the previous year’s revenue from the Central Bank.
“Subject yourself to Article 181, because it says that the Minister shall determine the limit but the limit shall not exceed 5% of previous year’s revenue. Previous year’s revenue was 58 Billion. Is 10 Billion 5% of 58 Billion?
“So Minister, you have questions to answer for violation of the Public Financial Management Act (PFMA); for violation of Article 181 of the Constitution; and for violation of your own Fiscal Responsibilities Act. This makes you a potential candidate for sanctions for some sections of the Fiscal Responsibility Act. So we are not going to suspend it,” he indicated.
The Minority Leader in his conclusion, took potshots at the Government when he suggested that the economy under the current Finance Minister, was exhibiting symptoms of COVID-19.
“So Mr. Speaker, this year’s Mid-Year Review Budget only comes to me as a manifesto pledge and promise and reflects the same COVID problems that the Minister stated. The economy is having temperature because debt is rising from 120 Billion to 256 Billion; Importers and exporters are coughing, because the exchange regime has gone very high; and the Ghanaian private sector and individuals are sneezing with hardship,” he teased.
His counterpart the Majority Leader, Osei Kyei-Mensah-Bonsu, on the other hand, admitted that expenditures under the current Government have indeed shot up the public debt stock to 258.372 Billion Cedis, representing 67% of GDP. He however debunked the assertion that the current Government has borrowed more money than any other government.
“While I agree with Minority Leader that Parliament must watch the radar of expenditure to ensure that as a country, we have value for money, it is unfortunate and simplistic, however, to suggest that this Government has borrowed more money than any government. Mr. Speaker that cannot be true…
“In 2016, the debt stock climbed up to 122 Billion. That meant that the debt had increased by 86 Billion. That was between 2012 and 2016. That year’s exchange rate was 1 Dollar to 4.18 Cedis. That meant that the increase in Dollar terms was 21 Billion Dollars. That meant that the Mills-Mahama Government added at least 35 Billion US Dollars to our debt stock.
According to the Majority Leader, what was more important was for the accumulated debt to be measured against the GDP and not in isolation.
“Mr. Speaker, in 2020 as at yet, the debt has increased to 258 Billion as I said. The increase is 136 Billion and the rate of exchange is 5.67, which will give the equivalent of 24 Billion Dollars. What is more important, Mr. Speaker, is for us to measure the debt against the GDP. Between 2008 and 2016, the increase in debt accumulation is 75%. Mr. Speaker, between 2016 and June this year, it is 18%. Who are better managers of this economy?” He quizzed.
Story By: Clement Akoloh