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Friday, March 11, 2016

2010 budget, some analyses are false - Osafo Marfo
Audrey Agyiri-Inkoom, Ghanadot

Accra, Nov 21, Ghanadot - Statement and Economic Policy for the year 2010, may have been laid before parliament, but the debate still rolls on, the latest to join in the fray is the former Minister of Finance in the erstwhile NPP regime, Mr. Yaw Osafo Marfo.

Mr. Osafo Marfo strongly argued that to totally rubbish off the 2010 Fiscal policy framework of government is not the best, adding that there is no substance in the budget will be disingenuous, insisting that whiles “some aspects of it are good, other segments of the budget left much to be desired.”

In an interview on Peace FM, the former Finance Minister held that technically, some of the analysis contained in the budget are false. He also added that in the presentation of the 2010 budget statement, a comparison with last year’s (2009) budget should have been done to ascertain whether certain economic objectives were met.

“If you look at the inflation target, they were talking about 14.59% but they ended up at 18%, so it did not go down well.

“The growth target was 5.9% but it declined sharply to 4.7% and that is dangerous, because the growth at the end of 2008 was 7.3% so if you contract (lessen) it to 4.7% in 12 months, then it means you are increasing unemployment, you are not expanding goods and services of the nation.”

The former Member of Parliament for Oda in the Eastern Region opined that considering “the rate of unemployment in a country, with about 25 universities churning out products by the day, it is unwise to contract the economy”.

He also faulted government for “treating arrears as a deficit, saying it does not make economic sense.”

“…some arrears have not been paid, so if your arrears have not been paid, how do you add it to the expenditure line as if you have spent it, you don’t add arrears to your deficit as if you have spent the money….When you borrow…,if you have payment over 5 years, only one fifth of it will hit the expenditure. You cannot use all the 100% to hit expenditure when you can borrow to pay for only 20% to hit expenditure. That whole analysis is false,” he added.

He said, “it’s also a matter of fact that proceeds from divestiture must be recognized as revenue, but to say that deficit excluding divestiture...it is wrong. You cannot exclude divestiture proceeds from revenue.”