|
Press Release
NPP
December 02, 2015
Part One
Part Two
Part Three
Part Four
THE NPP RESPONSE TO THE 2016 BUDGET
STATEMENT, THE 7 YEAR. RECORD OF THE NDC & THE
ALTERNATIVE VISION UNDER AN NPP GOVERNMENT
Fellow Ghanaians, on Friday November 13 2015, the Minister
of Finance, presented to Parliament the Budget Statement and
Economic Policy of the Government of Ghana for the 2016
Financial Year. The 2016 budget is the last budget of the
second four year term of the NDC government. After two terms
in office, one would expect that major gains would be made
by this government in tackling the major problems the
Ghanaian economy. These are problems of inclusive economic
growth to address unemployment, decline in the agriculture
sector, rising cost of living, collapsing businesses, the
energy crisis (“dumsor”) unsustainable debt, poor
infrastructure, rising interest rates
exchange rate depreciation, rising fiscal and balance of
payments deficits, and corruption.
If one factors supplementary budgets since 2009, this 2016
budget is the eighth main budget in 7 years that the NDC has
delivered. All of them promised a “Better Ghana” yet the
outcomes, consistently, have been very abysmal. The eight
main budgets over the last seven years have promised to
address these challenges with various policies and the 2016
budget is no different. Today, the
promise is to “change lives and transform the economy”. One
really wonders if this government is in touch with reality.
The reality for most Ghanaians is that the economic policies
of this government have destroyed many lives as young
graduates are unable to find jobs, people are unable to pay
school fees for their
wards, people cannot pay for hospital fees, businesses are
collapsing, etc. Many lives have been destroyed and the
economy, as we would show shortly has rather been deformed
and not transformed. We have kept warning the government
that you cannot use propaganda to manage an economy. The
reality is that the people are suffering under this
government and there is no transformation. Propaganda cannot
change this reality.
Ghanaians were promised a ‘Better Ghana” in 2008 but going
into the 8th year of government in 2016, this government has
delivered one of the worst economic performances of any
government in Ghana’s history. The record after the last
seven budgets of the NDC is definitely not one of a “Better
Ghana” than the one this government inherited in 2009.
Rather, it is a record of a monumental waste of an historic
opportunity to transform the economy of Ghana and improve
the lives of Ghanaians.
While budgets are a statement of intent for the year ahead,
there is no substitute for a seven year record of
performance.
We have an opportunity today to
compare the record of performance of the NPP government of
2001- 2008 under President J.A. Kufuor and the NDC
administrations of Presidents Mills and Mahama (2009-2015),
comment on the 2016 budget and present an alternative vision
for the NPP that will guide future NPP budgets under a Nana
Addo Dankwa Akufo Addo government.
GDP GROWTH
The GDP growth rate which was inherited by the NPP under the
stellar leadership of President Kufuor in 2000, 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 8.4% in 2008. This indeed
is steady growth and it occurred without revenues from crude
oil exports and in periods where the world was seeing the
worst economic crisis in decades.
In the process, the size of Ghana’s economy increased from
some $5.1 billion to $28.5 billion, a 500% increase!!!. Even
in the face of a global economic and financial crisis in
2007/8 (with oil prices reaching a record high of
$147/barrel) economic growth in 2008 rose to 8.4%. Ghana was
transformed during the period of the NPP’s tenure
(2001-2008) from a low income HIPC economy to a lower middle
income economy on the frontiers of emerging market status.
The NPP’s record on economic growth compares with the uneven
and recently declining growth rates achieved by the NDC
Mills-Mahama, Mahama administrations.
In 2009 growth rate swung down
to 4.0%; in 2010 it grew at
8.0% and upped to 14.0 per cent with the onset of oil
production. For 2012 the GDP growth registered 8.8%,
climbing down to 7.6 in 2013 and plummeting to 4.1% in 2014.
The provisional 2015 GDP growth rate is 4.1% and for the
first time since the inclusion of oil revenues beginning
from 2011 the non-oil component of the GDP growth of 4.2% is
higher than the overall real GDP growth rate of 4.1%. In
2014 the revised figures indicate that GDP growth rate was
4.0% same as the non-oil GDP growth. In the eight years of
the NDC government, the size of the economy would have
increased from $28.5 billion in 2008 to a projected $39.4
billion in 2016 (with oil), a 52% increase compared to the
500% increase witnessed under the NPP (without oil).
DECLINING AGRICULTURAL SECTOR GROWTH
In critiquing the 2015 budget we stated that even though we
were happy with government’s declaration of intent to
promote export-led growth via identifying and promoting
agricultural produces it was not clear by which method
government wanted to achieve its object. At the time we
stated that government had mentioned only one agricultural
produce, cotton, for stimulation. We stressed the fact that
there was a disconnect between the declaration and practical
promotion since there was nothing in the budget to
pursue that otherwise noble objective.
The provisional Agricultural growth of 5.3% in 2014, we
noted, was on account of logging which had registered a
growth of 16.5% and cautioned government to show greater
commitment to agricultural growth.
One of the reasons why agriculture is not doing well is
because of the paltry budgetary allocation to the sector. In
2009, 3% of the entire budget was allocated to Agriculture.
It climbed down to 1.9% in 2012 and 1.03% in 2013.
In 2014 only 1.07% of total budgeted allocation went to
Agriculture, out of the total of GH¢44 billion budget
figure. For 2015 only GH¢484.3 million equivalent to 1.1% is
allocated to the two ministries of Food and Agriculture, and
Fisheries and Aquaculture Development. In 2016 the total
budget figure is GH¢50 billion
and the allocations to the two ministries of Food and
Agriculture, and Fish and Aquaculture sums up to GH¢554,208,420
which is equivalent to 1.1% of the entire budget. All these
paltry allocations have been made against the background of
the Maputo declaration, which provides that governments in
Africa must invest at least 6% of their annual budgets in
Agriculture.
Agriculture is stagnating and has since 2008 underperformed.
Real growth in Agriculture tumbled from 7.4% in 2008 to 7.2
in 2009 through 5.3% in 2010; 0.8 in 2011; 2.3% in 2012; 5%
in 2013; 4.6 in 2014 and now the rock-bottom figure of 0.04%
for 2015. Indeed the crops sub-sector, the dominant factor
in agriculture, experienced a negative growth rate, i.e.
-1.7%.
The stagnation in Agriculture found expression in the
importation of $1.5 billion of food stuff into the country
in 2014 against a food import bill of $600 million in 2008.
The import of fish, poultry, tomatoes, cooking oil, have all
doubled between 2008 and 2015.
The production of basic food staples (cereals, legumes,
roots and tubers) have all been stagnating. The huge yearly
vacillations in outputs and the rising imports of rice from
395,400 metric tons in 2008 to 543,465 metric tons in 2011
and over 600,000 tonnes in 2013 for which alone the nation
spent $374 million (Ref. Pg. 11 of 2014 State of the Nation
Address) testify to the escalating food insecurity in the
country. Today, the country is on the brink of serious
shortages in the supply of maize a major staple in the
country. In 2012, crops grew at 0.8%. In 2015 crop was
projected to grow at 5.8%, later reviewed to 4.1%, it grew
at -1.7% which was 141.5% short of what was anticipated to
be produced!
Production of meat and fish has not seen much growth. Fish
production grew by 5.7% in 2013 but experienced negative
growth of -5.6% in 2014, that is almost 200% short of what
was anticipated and that is why in 2015 the target growth
was set at a modest 1.9%. There has been a steady increase
in the importation of livestock and poultry products: from
128,000 metric tonnes in 2008, to 139,000 tonnes in 2011,
$170 million in 2013 and $283 million on
imported fish.
FERTILIZERS AND OTHER INPUTS
Millions of Ghanaian farmers and fishermen continue to
suffer from low productivity because of inadequate supply of
improved inputs (seeds, fertilizer, agro chemicals and
pre-mix fuel), inaccessible market and farm credit. The
thriving black market and the mass smuggling of “free”
fertilizer and other chemicals meant for application on
cocoa farms, are a clear testimony of the
failure of farm input policies. The 2014 and 2015 Budget
Statements provided for the distribution of 180,000 metric
tonnes of fertilizers each year to food crop farmers at
subsidized prices
to promote usage. In spite of the budgetary provision, the
government has blatantly failed to supply the subsidized
fertilizers to food crop farmers in the two consecutive
years of 2014 and 2015.
The fertilizer subsidy programme initiated by the NPP
administration in 2007 has now been effectively buried by
this government.
The fact that many cocoa farmers are also food crop farmers
is lost on this government. Thus, the discrimination in
input pricing policy between these two groups of farmers is
totally illogical and doomed to failure.
AGRICULTURE EXTENSION
The link between the farmer and modern technology for the
needed
transformation of Ghanaian agriculture, is the agricultural
extension officer.
But the ratio of the number of farmers to an extension
officer has swollen 3,000-to-one; one of the highest in the
world.
The international standard is 500-to-one. What is worse – a
significant number of officers are close to the age of
retirement! Yet, in the last seven years recruitment of farm
extension officers has remained frozen. Students passing out
from our agricultural colleges are dumped on the heap of the
mounting youth unemployment.
Apart from frozen recruitment and the retirement age,
extension officers at post lack the needed logistics
to travel to meet farmers on their farms. Under the NDC
administration, extension officers have been denied fuel and
field allowances to work with farmers. The recent supply of
smart phones to extension officers in a desperate attempt to
introduce ICT to extension work is bound to fail unless
their transportation difficulties are addressed.
AGRICULTURAL MECHANISATION
Ladies and gentlemen, the plan to establish Agricultural
Mechanisation Service Centres (AMSEC) in each district has
been repeated in each Budget year since 2009. From 86
centres in 2009 the number of centres reported in the 2015
Budget is 89. Many of the existing centres are closing due
to lack of spare parts
yet the 2015 Budget states that 41 new centres would be
established in 2015.
The plan since 2010 to import 2,000 tractors remains only a
promise. Given the unfulfilled promise of establishing farm
mechanisation centres in each district, rehabilitation of
existing ones would be value for money and would be of
benefit to more farmers.
YOUTH IN AGRICULTURE AND BLOCK FARMING PROGRAMMES These two
programmes typify the distraction of policy focus away from
the major operators in food and agriculture, i.e. the nearly
5 million small holder farmers and fishermen in this
country. These programmes as stated earlier are
now absorbing a disproportionate amount of our very scarce
public resources.
Average yields per acre of maize and other crops from these
two programmes have consistently been below those on small
holdings. Apart from the lower productivity, the rate of
loan capital recovery is very low. Beneficiaries, most of
whom are selected on the basis of political party loyalty,
literally walk away without paying for the inputs provided
in kind. These programmes have become a huge drain on public
resources with little to show for them.
BUFFER STOCK
The Buffer Stock Company Limited established in 2009 is
highly undercapitalized for the task assigned to it to
support the local grain market. Recent reports of stocks of
maize locked up in farming communities in the Northern
Region clearly demonstrate the failure of the Buffer Stock
Programme of this NDC Government. To make a real impact, the
Buffer stock company requires to be a major player in the
over 300,000 metric tonne domestic grain market. Yet they do
not have the resources to handle 30,000 metric tonnes, which
is a tent of that tonnage. The company has become only a
token institution and a drain on public resources rather
than an instrument of real intervention in the market to
support appropriate and proper grain prices received by poor
farmers.
The question we all have to ask is - how are we going to
transform the economy if we continue to pursue policies that
result in the stagnation of the agricultural sector? There
is no transformation taking place in the agricultural sector
under this NDC government. Certainly, Agriculture, the
largest employer of the Ghanaian people, under this
government has been deformed and not Transformed.
In addition to the decline in agriculture, the manufacturing
sector is also in decline. The last three years have
recorded negative growth in the manufacturing sector with
growth at -0.5% in 2013, -0.8% in 2014 and -2.0% in 2015.
If agriculture growth stands at zero and manufacturing
growth is negative 2% what exactly has this government been
transforming in this economy?
WAMZ COUNTRIES
It is interesting to note that the 2013 average economic
growth in countries in the West Africa Monetary Zone (WAMZ)
of whom, excepting Nigeria, are nonoil producing was higher
than Ghana’s. In 2014, just as in 2015, the average GDP
growth in these non-oil economies was stronger than Ghana’s,
an oil producing country. For the third successive year
Ghana could not achieve even
one of the ten convergence criteria. Even for the six (6)
Rationalized Macroeconomic Convergence Criteria, Ghana
scored 0 out of the six and placed us last in the table of
nations including the Gambia, Sierra Leone, Liberia, Guinea,
and Nigeria. That is the abysmal record that we all are
living witnesses of.
For the second successive year, the Minister of Finance,
knowing Ghana’s position has refused to publish the league
of performance of the various countries. The reason for this
is not farfetched: the picture will present a graphic
reality about what somebody refers to as the “smoothness
level” of Ghana under this government (against countries
like the Gambia, Sierra Leone, Liberia, Guinea and Nigeria)
, and hence the decision not to show it.
More ....1/4
|
