The amount, which is contained in the 2018 budget statement to be presented to Parliament Wednesday by the Finance Minister Ken Ofori-Atta, represents 8.7 per cent growth over the 2017 total expenditure, Graphic Online has reported. The 2017 Asempa budget was in June revised down to GH¢55.9 billion following a 14.9 per cent decline in revenues within the first half. A large part of the budget amount is expected to be committed to the social sector under which the government’s Free Senior High School, as well as the restoration of nursing and teacher trainee allowances fall.
Sources familiar with the budget told the Graphic that government believes the GH¢60.8 billion is enough to help anchor the stability in the economy and get it to grow above seven per cent next year.
GH¢700m to Marshall Plan on agric
The government also plans government to allocate about GH¢700 million of the 2018 budget to its Agricultural Marshall Plan that is expected to significantly revamp the agric sector and enable it to lead the effort towards economic transformation. According to the Graphic, government is hopeful that the plan would build on the success of the Planting for Food and Jobs (PFAJ) programme geared towards improvin productivity in the sector.
The amount will primarily be invested in agricultural transformation programmes, construction and refurbishment of roads linking farms to urban centers and provide storage facilities for farm produce. “The government is convinced that the Marshall plan is part of efforts to give true meaning to agriculture as the major economic driver, by modernising the sector to also achieve food security and profitability for farmers,” Graphic reported. GHC100m stimulus package for distressed business An amount of 100 million cedis from the 2018 budget is expected to be committed into revamping some struggling business, which have mainly suffered due to the electricity crisis that affected the country leading to some layoffs, to stay afloat.
The businesses to benefit from the package would be identified by a special group of government officials and players in the private sector led by the Association of Ghana Industries. Sources explain the stimulus package forms part of government’s plan to create a solid economy that thrives on strong private sector growth.
Govt targets 4.5% fiscal deficit
The government is planning to bring down the fiscal deficit down to 4.5 per cent of gross domestic product (GDP) in 2018. The figure is below the 3.8 per cent required by the International Monetary Fund (IMF). 2018’s deficit target will be some 1.8 percentage points lower than the 2017 target, which was set at 6.3 per cent. According to the Grapic, it sourceswithin government has said the 2017 deficit target had virtually been met after a 14.9 per cent drop in revenues in the first six months of the year led to a downward revision to revenues and expenditures.
“The truth is that the focus for growth in the budget is not going to necessarily come from the fiscal side. To us, what is critical from the fiscal side is the stability – the exchange rate and making sure that you do not cut out the private sector – and that is what you will see in the budget,” one of the sources said, dismissing concerns that a rigid fiscal deficit of less 4.5 per cent of gross domestic product (GDP) could strangulate growth.
“The agenda is not about relying on government. It is more about getting the economy stabilised, bringing relief to businesses and then using the private sector to get the job done,” the source added.