Finance Minister, Ken Ofori-Atta will on July 29th 2019 present the Mid-Year Review Budget which was scheduled for an earlier date but had to deferred to the above date as was confirmed in Parliament on Friday 19th July that was programmed in the Business Statement for the next week read by the Deputy Majority Leader, Sarah Adwoa Safo.
Though no official reasons were given for the postponement, the announcement by the Deputy Majority Leader, has it that “Debate was scheduled for next Tuesday, Mr. Speaker I wish to inform the House that the mid-year year review has been postponed to 29th July, 2019 and the Minister for Finance next two weeks Monday will appear on the floor to present the budget statement and economic policy of government for 2019 financial year”.
Government will be aiming to reduce its budget deficit and inflation as well as outline plans to stabilize the economy.
Already the Economic Intelligence Unit(EIU) has cautioned that the government could overspend to fulfill campaign promises ahead of general elections next year.
Despite enacting the fiscal responsibility law that places limits on how much government must spend, the EIU is predicting that government will side-step the law in order to deliver on its campaign promises.
The fiscal responsibility law, which was passed in 2018, seeks to limit budget deficit to a maximum 5 percent of Gross Domestic Products (GDP). But the EIU, in its country report for July, says government may miss it by 0.5 percentage points in 2020—the election year— due to rising expenditure.
The International Monetary Fund (IMF) also sees Ghana’s 2020 elections as a crucial test for the country’s renewed efforts to keep public expenditure within approved limits, especially in an election-year
Expectations remain high in a post-IMF era, with the key issue been maintaining the fiscal discipline and doing so across the elections cycle.
Following two years after the government of President Nana Akufo-Addo assumed power on a resolve to take “Ghana beyond Aid,” the deficit has narrowed, inflation has slowed, debt levels have stabilized and economic growth is accelerating, estimated at 5.6 percent for last year and 7.6 percent for 2019. Reforms that range from legislation that outlaws large deficits to the establishment of fiscal supervisory councils and an aggressive banking-sector overhaul will do away with the need to ask the IMF for a 17th bailout after it passed the final review of the current one on March 20, according to the government.
The Mid-Year Review of the Budget Statement and Economic Policy of the Government of Ghana for the 2019 Financial Year is a mandatory requirement imposed on the Minister by law that before the end of July, he will have to come with a mid-year review.
In November, he presented the 2019 budget, the budget when it is presented, it is founded on nine months of data- “so we have not had the full 2018 report on the economic performance, so the minister is expected to come and present the full report” Chairman of the Finance Committee of Parliament, Dr.Mark Assibey-Yeboah said.
According to him, his expectation is that the Minister runs the country through 2018, detailing the economic performance, all economic indicators as they have it now.
“In the outlook for 2019, he must have six months of data-if there are revisions in there, he programmes a certain deficit-inflation, GDP, sectorial growth.
If there are going to be changes then he has to come to tell us, so he revises the things he came to tell us in November, seven months is a long time for things to change, the currency itself has had its challenges.
Now if new revenues have arisen for which reason there is going to be new expenditure then there must be a supplementary budget. If there are going to be new taxes for example then there has to be a supplementary budget” he said.
The NPP government made a lot of ambitious promises in the run-up to the December 2016 election. They included: Free SHS; One District, One Factory; One Village, One Dam; US$1million for each constituency, and other infrastructural projects— all of which must be delivered before the country goes to the polls in December next year if the governing party is to retain power.
It is against these expenditures that the EIU is predicting that government will spend more, thereby hitting a budget deficit of 5.5 percent.