Finance Minister, Ken Ofori-Atta, says government’s budget for the next year General Elections will be used wisely for its intended purposes.
He insisted that the NPP will ‘stay in budget’ and will not “overspend” as others.
Mr Ofori-Atta, who was speaking in a wide range of issues related to the economy on Peace FM’s morning show ‘Kokrokoo’ Thursday, also touted the Akufo-Addo administration’s credentials by beating his chest saying the NPP has “fixed quite a bit of the mess” created by the erstwhile Mahama’s government.
Budget Overrun Implications
Budget overruns, particularly in election years, have always had dire implications for the macro-economic environment and even though the trend has persisted since the advent of the 4th Republic.
Consequently, many analysts worry as the impending election gets closer. There’s a political uncertainty and its usually around this time that spending pressures on the part of government emerge.
The International Monetary Fund (IMF) sees the 2020 elections as a crucial test for the country’s renewed efforts to keep public expenditure within approved limits, especially in an election year. In what has become known as the four-year electoral cycle, Ghana has overrun its budget in past election years, mainly due to unplanned spending by respective governments in their bid to win votes and retain power
After the 2012 elections, the major commodity exporter’s budget deficit ballooned to 11.8%. Consumer inflation soared above target while the local currency weakened consistently, forcing the country into a $918million IMF aid programme in 2015 to restore balance.
Ghana has since pursued fiscal and financial reforms, including the passing of a Public Financial Management (PFM) Act in 2016 and a Fiscal Responsibility Act in December to ensure economic discipline.
There are, however, mixed market sentiments about whether the country will avoid the excessive four-year cycle expenditure overrun this time around.
Election Year Excesses? We’ll “Hold The Line!”
The Finance Minister, however, assured that the current administration will “manage our expenditure and have value for money.
“Next year, we will hold the line with regards to election year excesses,” he vowed.
Asked how optimistic he was that the government will not overrun its budget next year, the Finance Minister lightheartedly said; “with the tacit support of Ghanaians, we will not overspend”, and added that though “History tells us that those who overspend during election time don’t come back, that is a fallacy.”