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Supplementary Budget Budget review tells economy is ‘highly challenged’- economist

Speaking on Joy FM’s News analysis programme Newsfile on Saturday, July 30, 2016, Dr Boakye said the country has come from an era of high [economic] growth and buoyant economy, adding that the current challenge is due budget overruns and drop in economic growth.

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A senior fellow at the Institute for fiscal Studies (IFS), Dr. Said Boakye, has said the Ghanaian economy is ‘highly challenged’ and that only growth can ‘settle the scores.’

READ MORE: Gov't may borrow to pay salaries, Minority says

Speaking on Joy FM’s News analysis programme Newsfile on Saturday, July 30, 2016, Dr Boakye said the country has come from an era of high [economic] growth and buoyant economy, adding that the current challenges are due to budget overruns and drop in economic growth.

Dr Boakye was reviewing Seth Terkper’s supplementary budget in which he requested for GHC1.88 billion due to a plunge in commodities prices, shut down of the FPSO Kwame Nkrumah and drop in crude oil prices on the international market.

He emphasised that the only way growth can occur in the economy is through capital investment.

He was quick to add that despite the much talk about investment spending by government, his analysis showed that investment has actually dropped.

“But then you look at investment spending, the much talk about investment expenditure, despite the talk about project are being carried out, investment expenditure is going down.

“At the end of 2015 for instance, investment spending to Gross Domestic Product (GDP) was about GHC7 billion. In the reviewed budget it has gone down to GHC6.7 billion.

“And if you don’t have investment, how do you grow the economy?

“It is only growth which can solve the economic challenges,” said Dr Boakye.

Dr Boakye further said the country’s economic problems are compounding because the economy is not generating revenue.

READ MORE: Gov’t spends more than GHC 2bn than forecasted

He said budget deficit has continued to stifle growth over the years.

According to him, “the country is mimicking growth rates that were reported in the 1990s,” describing the development as “very sad.”

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