The Member of Parliament for Old Tafo, for instance cited the failure of government to remit workers contributions to the pensions fund as stipulated under the Pensions Act as one of the reasons why the budget should not be approved.
According to him, information available to him suggests that the government has not transferred the deducted amount into the appropriate kitty since the beginning of 2014. This, he said, is a violation of the Pensions Act.
The Pensions Act stipulates that if an employer fails to transfer workers’ contributions within 14 days from the end of each month it would be liable to a 3% penalty.
Early this month, Joy News intercepted a report by the National Pensions Regulatory Authority (NPRA) to Parliament revealing that government through the Controller and Accountant General has failed to transfer more than 200 million cedis of workers’ pension contributions to the designated Bank of Ghana account.
Dr. Akoto Osei also argued that the budget should not be approved because the government failed to achieve all the targets it set for itself in 2014.
The MP decried the rising inflation and the increasing public debt and appealed to his colleagues to reject the budget many have described as an austere budget. For 2014, the government predicted an inflation target of 9.5 percent, plus or minus 2 percentage points.
Government also targeted economic growth of 8 percent in 2014 as well as to trim its budget deficit to 8.5 percent of gross domestic product.
But the Ghana Statistical Service announced that inflation for October 2014 has hit 16.9
The development, according to them, has shot up the country’s current public debt stock from GH¢51.6 billion in December 2013 to GH¢58 billion.
The Minority Spokesperson on Finance, Dr. Anthony Akoto Osei, told journalists at a news conference in Parliament House yesterday, that the huge debt “does not include the entire $3 billion China Development Bank (CDB) facility, and even the $1 billion Euro bond the country recently borrowed from the capital market.
“This means that today, every Ghanaian owes GH¢2,150. We are borrowing at a rate of GH¢2 billion every month,” he reiterated. He lamented that the public debt had progressively risen from GH¢9.56 billion in 2008 to the current GH¢58 billion, which is an increase of over 510% in 5½ years, emphasising that “the debt to Gross Domestic Products (GDP) ratio is about 58% today.”
The Mills–Mahama administration inherited a total public debt of $8billion, the equivalent then of GH¢9.5billion, at the beginning of 2009″. The figure, he continued, represented 33% of GDP. “Within 5½ years, this debt has escalated to GH¢58 billion, which is more than 4½ times, or, indeed, [a] 510% increase in debt stock over 5½ years.
“Inflation for August, meanwhile, was 15.9%. It has been on the upward swing since January. Inflation is no longer in single digit, and the nation has been spared the cacophony associated with it, instead of concentrating on relevant matters,” Dr. Osei noted.
Growth And Cedi Woes
He noted: “The GDP growth rate, which was inherited by Kufuor, was 3.7%. In 2001, the GDP grew at 4.2%. In 2002, it grew at 4.5%, rising to 5.2% in 2003, and to 5.6% in 2004. It rose to 5.9% in 2005; 6.4% in 2006; 6.3% in 2007 and to 7.3% in 2008, which later became 8.4% after the rebasing of the economy.
“This steady growth happened without the benefit of crude oil exports. This is how a really sound economic growth aggregate looks like.” However, Dr. Osei said if one was to consider the full set of economic aggregates that constitute what was properly called economic fundamentals, then the facts cannot be distorted.
He further told the journalists that the cedi depreciated by 17.6% in the first quarter alone this year, compared with a depreciation of 1.1% in the first quarter last year. “As at the end of August 2014, the cedi had depreciated by some 40% since December 31, 2013. The second worst performing currency in the world this year!!
“In the eight-year administration under President Kufuor the cedi, from GH¢0.72 – GH¢1.1 to $1, depreciated by 53%. Less than 6 years into the NDC administration, the cedi has depreciated by 245.5%, and still counting,” he stressed.
On interest rates, which now hover around 30%, Dr. Akoto Osei stressed the country’s gross international reserves in months of imports had dwindled to 2.2 months of imports, and the net reserve was for just seven days; its trade deficit was now well over $4 billion; the fiscal deficit was 10.8% in 2013 or about GH¢12 billion.
This was against the target of 9.0%. The fiscal deficit was 11.8% of GDP in 2012, against the target of 6.7%; our current account deficit in 2013 was 12.8% of GDP, or $5.7 billion (i.e. GH¢17 billion); it was $4.9 billion in 2012.
In 2011, the nation’s trade deficit was $3.1 billion; it escalated to $4.2 billion in 2012, and in 2013 it hit $4.1 billion. The worsening balance of trade position contributed to the massive current account deficit of $5.8 billion in 2013, the Minority MPs stated.
