of December, you close the account.
Madam Speaker, I think we have to go and inform the higher authorities who make those statements to refrain from those statements, because if they do that, it betrays the ignorance in the way we manage our finances. We close the account and we start again. Once the Hon Minister for Finance and Economic Planning tells us that the deficit is about 10.3 per cent, what he is saying is that, there is no money in the account but we owe extra 10 point something per cent of Gross Domestic Product (GDP)
In Ghana, the last time that we have had anything in that account after 31st December had been a long long time ago and no country, I mean, I can count the number of countries in this world which had those kind of resources left over for the following year. Of course, the surpluses are countries like China and a few of them, but Ghana is never one of them with surpluses. Even America, they are in deficit, huge deficits.
Madam Speaker, if you fail in an examination, your best bet is actually to repeat but then the Hon Minister for Finance and Economic Planning, after failing to meet all these targets, has decided now to actually up the targets. The targets that you failed to meet in 2010 are going to do even better than the targets you were unable to meet.
Madam Speaker, I think some of the targets are too high for 2010 and the Hon Minister for Finance and Economic Planning, I do not know if it is for show -- and then come back next year to say that the NPP Government -- I am sure at that time he will not have the NPP Government to blame --
Also he may not have the world market to blame because by then they would have been up there already and the whole world economy could be in good shape. So if he sets the target so high, he cannot come here for an alibi. The target that he stated for growth, he says it is going to be 6.5. We have had 4.7. How do you get to 6.5? And I will tell you the difficulty later.
Madam Speaker, the target for inflation -- 10.5 for 2010, better than the 15.3 that was set for 2009 and that could not be achieved. Overall deficit target is actually put at 7.5 per cent GDP when this year, the 9.4 we could not reach, we are making 10.3. How can we move from that point to that one? Madam Speaker, these targets are outrageous and the Hon Minister should come in the middle of the year to revise all of them because they are not targets that we can meet in this short period.
Madam Speaker, there is a problem even with how this deficit is going to be financed. The Hon Minister says that about 64 per cent of the deficit is going to be financed from domestic resources and this gives us about 1.26 billion. Well, if he can get it from local sources, it is better but it is against the law to actually borrow more than 10 per cent of what the revenue is from the Bank of Ghana or from the banking system; it is illegal.
This amount here is about 15 per cent of the revenue that we are going to collect this year, not even last year's revenue. Where is he going to do that? Unless he forces the Governor to give that money. Madam Speaker, the era where Hon Finance and Economic Planning Ministers can force Governors to print money is gone and we should never revisit it. So the Hon Finance and Economic Planning Minister should tread very, very cautiously.
Madam Speaker, the Hon Finance and Economic Planning Minister should also come clean with Ghanaians and he should admit and apologise to Ghanaians that the economy in less than one year is actually in the doldrums and set realistic targets for next year.
Madam Speaker, the economy grew less than five per cent for 10 years before 2003 and commentators refer that one to five per cent growth rate as a growth trap. It took enormous effort from this administration, our administration, to hit that ceiling and move beyond five per cent.
We have now picked it up into that growth trap again -- 4.7, below 5 per cent and I can assure you, unless we use a lot of effort, everybody together, we are going to stay in that trap for another 10 years before we get out of it. [Some Hon Members: Oh!] This is why I welcome the Hon Finance and Economic Planning Minister's theme for the Budget -- Growth and Stability.
I am not so sure whether it is “Growth with Stability” or “Stability with Growth” or it is a summersault of any of them; I do not know. But whatever it is, I hope the Government is not paying lip-service to the pursuit of growth, and I am saying that because I do not see any serious growth programmes in the Budget.
I t t a lk s abou t p r iva t e sec to r development, yet there is no incentive to the private sector on the supply side. Rather, what we see on the demand side are increases in taxes, on food items and a shift from specific to punitive ad valorem taxes on unspecified number of goods in the country. And there is even a contemplation of the re-imposition of taxes on petroleum products sometime down the road. Madam Speaker, paragraph
885, page 307, the Hon Minister said so, look at it.
Madam Speaker, in various circles, it is being taunted that the imposition of taxes on imported rice, wheat, yellow maize and crude vegetable oil will encourage local production of these goods. That assertion is false. The removal of the tax in May 2008 was not to increase imports or compete with local farmers; it was to reduce hardships on Ghanaians. And reintroducing means, you are bringing back the hardships on Ghanaians. I do not know what Ghanaians have done for them to deserve this on top of what they are facing now.
My Hon Friend here knows very well that imported rice has a high inelastic demand, which means when you increase the price, no matter how high the price would be, people are going to buy about the same amount of the rice that they will import. Therefore, they are not going to reduce it and shift to local production, at all. On the other hand, you are going to impose hardships on Ghanaians.
Madam Speaker, the price of bread is going to go up, the price of rice is going to go up, the price of vegetable oil is going to go up. What have they done to you? Why do you want to bring about this hardship? Though they are going beyond Christmas, they would start in January, just say that oh¸ enjoy for Christmas and in January you start imposing it.
So Madam Speaker, in 2005, 2008, when we were very serious with growth, the expenditure for domestic investment
