Thank you Hon
Minister, can we hear your statement?
1. Dr. Duffuor: Madam Speaker, on 5th March this year, I presented to this House the first Budget Statement of the Atta Mills Presidency. The Government was barely two months old and had just began the process of assessing the true state of the economy we had inherited. In August, I appeared before this House to present a supplementary budget. The supplemen-tary budget was drawn up against the backdrop of established facts that indeed all was not well with the economy we inherited on 7th January,
2009.
2. His Excellency the President has set out the government's vision of creating a ‘Better Ghana'; through a transformed and prosperous nation providing opportunities for a better life for all Ghanaians. It is this vision and the broad policy framework which defines his economic and political philosophy. Rather than engage in rhetoric on the state of affairs, we embarked on well thought out policies and actions designed to address the downward trend.
3. Madam Speaker, in the course of my presentation, I will highlight some of the critical challenges we have faced.
4. By way of a quick summary, the truth that must be told is that, the Government inher i t ed a d i s t r essed economy characterised by huge twin deficits. The fiscal deficit alone stood at GH¢2.6 billion at the end of 2008 when NPP left office compared with GH¢260 million registered at end 2000 when NDC left office.
5. The accumulation of the huge arrears in 2008 threatened the execution of the 2009 budget since most of the arrears were not detected and budgeted for during the preparation of the 2009 budget. The NDC Government has managed to pay a sizeable proportion of the arrears but there are still outstanding ones to be taken care of in the 2010 budget. There is also the possibility of uncovering new arrears which MDAs have not disclosed to Government and these will have to be dealt with as and when they are uncovered.
6. Madam Speaker, of particular concern is a large portion of arrears which arose from contracts that were in clear breach of the procurement law. There is an on-going audit to determine the extent of the malfeasance and our course of action will be determined upon its completion.
7. MDAs have been directed to fully comply with existing rules and regulations that govern the award of contracts to avoid the reoccurrence of this problem.
8. Madam Speaker, one of the burdens that this government has had to carry is a huge judgement debt. How did this judgement debt come about? It is the result of the failure of the NPP Government to honour contractual obligations and the flagrant disregard to pay even when judgements had been given by both local and foreign courts and arbitration panels. In the circumstance, at the end of September this year, the judgement debt outstanding was about GH¢560.0 million, which converts to over US$ 380.0 million.
9. Madam Speaker, faced with these critical challenges, Government's 2009 budget was designed to focus on ensuring macroeconomic stability and fiscal consolidation within the context of the national medium-term goal of sustained and accelerated growth.
10. Madam Speaker, our prudent fiscal management continues to be a major factor behind our economic resilience. Indeed, because of our prudent economic management, our fiscal targets for 2009 are largely on track. We are also building up our foreign reserves, and we have contained our external and domestic indebtedness. The successes achieved so far are by and large, the result of sound, well-crafted and purposeful policy- making.
11. Madam Speaker, with the fiscal consolidation and macroeconomic stability achieved through the implementation of bold and sound economic policies, coupled with the understanding and support of our people, the 2010 Budget ushers in, the government's growth strategy framework towards a ‘Better Ghana'. This framework identifies a
comprehensive set of policies to support Government's Medium Term Growth Strategy.
12. With the solid foundation, due to the implementation of the 2009 budget, this second budget of the NDC Government with its theme ‘Growth and Stability' focuses on a progressive programme of development through job creation intended to improve the quality of life of our citizenry.
13. Madam Speaker, the tools for achieving the objectives of this ‘Growth and Stability' budget are:
Sustenance of the macroeconomic stability and fiscal discipline achieved in 2009;
Posi t ioning the country for a sustained growth through the modernisation of agriculture, provision of key infrastructure development, oil and gas projects, ICT and private sector development; and
Delivery of social programmes targeted at poverty reduction.
14. Madam Speaker, it is evidently clear that the financial turmoil has imperiled the world's economy and precipitated a severe decline in both business and consumer confidence. Indeed, even the once vibrant economies such as China and India have all been affected.
15. The majority of countries have faced steep declines in remittances and revenue from tourism; reductions in financing including foreign direct investment and grants, and rising debt and unemployment.
16. In the case of Ghana, we have had to
turn to the IMF/World Bank for financial support due to the huge resource gap in government finances and the balance of payments weakness.
SECTION TWO: W O R L D
