The Member of Parliament for Bolgatanga Central, Isaac Adongo has accused the government of understating the country’s fiscal deficit during the presentation of the mid-year budget review last week.
Mr. Adongo took on the government insisting that the Finance Minister’s 2020 deficit projected at 11.4 percent is a matter of contention.
According to him, the deficit must rather be 15.6 percent.
Finance Minister, Ken Ofori-Atta during the presentation said the COVID-19 pandemic has resulted in revenue shortfall of GH¢13.6 billion and ‘unanticipated but necessary expenditures’ of approximately GH¢11.7 billion.
“This will result in a projected fiscal deficit of 11.4% of GDP. This is above the 5% limit as stated in the Fiscal Responsibility Act, 2018 (Act 982)”, he stated.
But on The Point of View on Citi TV, the Bolgatanga MP who is also a member of Parliament’s Finance Committee questioned the government’s basis for arriving at the projection.
For him, points made by the Finance Minister to the effect that the total foreign and domestic borrowing to finance the deficit is GHS 44 billion are false because of the lack of correspondence in the financial figures that were presented.
He argued the GHS 4.9 billion project loans, GHS 8.2 billion programme loans, US$ 2 billion Eurobond which converts to GHS 11.4 billion, pushes the total external source of borrowing to GHS 24.7 billion albeit financing the same deficit with domestic borrowing of GHS 32 billion – the total foreign and domestic borrowing to finance the deficit is rather GHS 56.7 billion and not GHS 44 billion per the Minister’s data.
Isaac Adongo, thus insisted that, the 2020 total projected expenditure has been understated by GHS 12 billion.
“Paragraph 444 exposes the manipulation in the fiscal table where he is reporting expenditure of GHS 97 billion when he should be reporting GHS 109 billion in the fiscal table. If you have GHS 53 billion of your own money to spend, and you are spending GHS 109 billion, [you need to borrow an addition GHS 56 billion] and that is exactly my point. If you are appropriating GHS 109 billion, then your deficit cannot be GHS 44 billion because your own money is GHS 53 million. They are understating the deficit, so if you take the GHS 56 billion, then you are now getting a deficit of 15.6 percent and not 11. 4 percent”, he claimed.
In the mid-year budget review, the Finance Minister requested for a supplementary budget of GHS11. 8 billion, to support the government’s expenditure for the rest of the year towards the implementation of various initiatives to strengthen the economy.
The supplementary estimates have since been approved by parliament.
CARES not a proper plan for recovery
On the government’s GHS100 billion initiative known as the COVID-19 Alleviation and Revitalisation of Enterprises Support (CARES) scheme to help the country recover from the economic shocks brought on by the COVID-19 pandemic, Isaac Adongo said, the program is misplaced given the uncertainty of who takes over as government after the 2020 polls.
The National Democratic Congress (NDC) legislator wondered why a new project will be introduced in a mid-year budget review ridiculing the governing New Patriotic Party (NPP) government that it cannot use the CARES programme as a fiscal recovery strategy to plan for the incoming NDC administration to be led by the opposition leader, John Dramani Mahama.
“That shouldn’t be in the 2020 review because you don’t come to a mid-year budget review and introduce new items, you are supposed to give us updates on your existing programs. So if you come and you are talking about 2021, who said, he will be in government? He cannot plan for the next President. Who said, he will be there and be the one to implement it. That is why there is a framework for planning. That is why he has done the social and economic framework for planning for four years, so he should stay with that. He can’t be planning for the next government and John Dramani Mahama”, Mr. Adongo retorted.