Economist, Dr. Adu Sakodie says the 2016 Budget Statement by the Minister of Finance, Seth Terkper, was a mere fulfilment of a constitutional mandate than a financial budget.
Too much allocated to interest payments - Dr. Sakodie
" I was completely scandalised by the amounts of money we were allocating to the payment of interests, it was five times higher than our oil revenue, and again higher than what we intend to spend on capital expenditure which essentially is at the core of our development.
According to him, a budget is mainly about revenue and expenditure. But unfortunately, Seth Terkper's 2016 budget did not deal with them well enough.
In an extensive discussion with Pulse Business on the 2016 Budget, Dr. Sakodie said,
" I was expecting clear plans on how we intend to generate revenue in 2016, given our constant revenue shortages, and a clear plan on how we are going to streamline expenditure, and there was nothing."
Dr. Sakodie also bemoaned the amounts of money the government was planning on spending on payment of interests, compared to capital expenditure.
" I was completely scandalised by the amounts of money we were allocating to the payment of interests, it was five times higher than our oil revenue, and again higher than what we intend to spend on capital expenditure which essentially is at the core of our development. This means that too much money in our budget is allocated to servicing debt, how can the country develop this way."
The third issue of contention for Dr. Sakodie as far Friday's Budget Statement was concerned was the apparent lack of attention on falling commodity prices like fuel.
" I was also very shocked that the minister did not mention any plans to mitigate against the impact of possible fluctuations in oil prices. In 2015, one of the biggest causes of the revenue shortfalls we experienced was due to falling oil prices. In the 2016 budget, I expected a clearly spelt out plan to mitigate against the effects in the coming year. But there was nothing. This is not good enough"
On the debate as to what oil revenues should be used for, Dr. Sakodie emphasized his long standing position that " it should be use for the provision of infrastructure development. It is neccessary. There's no need keeping the money off-shore in the name of future generations, neither is it necessary for us to use for budget stabilisation. Instead, let's use reduce the infrastructure deficit in the country. Ghana has about a 2 billion -dolllar annual infrastructure deficit. We need to build more roads, provide more energy and build railways. That is a better of way to leave a legacy for the future generation"
There seemed to be a sense of apathy about the budget this year, Dr. Sakodie decried this saying,
" The Euphoria was absent even in parliament. I was in Parliament and the galleries were empty. We did not attach any seriousness to the budget. Noone seems to care, about what is supposed to be the future plan of this country the next two years. That cannot be right."
" Perhaps its because governments have not implemented them well enough. So people have lost interest. Something must be done."
There has been a long- standing debate as to whether Ghana is making judicious use of its oil revenues. Currently, under the Petroleum Revenues Management Act, oil revenues are spent in three ways, 1. Annual Budget Funding Support 2. Stabilisation Fund 3. Heritage Fund, which essentially is an investment for the future generation.
Other financial analysts have also had cause to criticize the 2016 Budget statement as shallow and lacking concrete economic strategies on the basis of revenues and expenditure.
Financial analyst Sydney Casely Hayford described the Budget as a story, and not a budget, because it failed to concretely spell out revenue and expenditure strategies.
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