“most microeconomic targets are likely to be missed; on current policy initiatives, we expect 2010 to be even a more difficult year. To be forewarned is to be forearmed.”
Mr Speaker, as a patriotic Ghanaian, I had wished my prognosis had been totally wrong. Mr Speaker, I am afraid to say that the performance of the economy in 2010 has been worse than anticipated. Mr Speaker, as a first approximation on the performance of the economy, one may choose to evaluate the economic targets set by the Government against the actual performance of key economic indicators as announced by the Hon Minister on the 18th November, 2009. Mr Speaker, with permission, I would proceed to do some comparison.
Mr Speaker, in 2010, the Government targeted a real GDP growth of 6.5 per cent. Mr Speaker, the actual realized, we are told, was 5.9 per cent; a missed target. Mr Speaker, with respect to sectoral growth rates, the agricultural sector was targeted to grow at 6 per cent, industry at 6.6 per cent and the services at 6.8 per cent. Mr Speaker, the provisional growth rates achieved are reported to be 4.8 per cent, 7.0 per cent and 6.1 per cent for the agriculture, industry and service sectors respectively. In other words, Mr Speaker, for these areas, two out of three targets were missed.
On inflation, Mr Speaker, the average inflation was targeted at 10.5 per cent and the end period was targeted at 9.2 per cent. Mr Speaker, the provisional numbers are the following: the average is 12.5 per cent as against the target of 10.5 per cent, and then the end period is 9.38 per cent as against the target of 9.2 per cent. Mr
November, 2010.
Mr Speaker, it is instructive to note that the 2010 year fiscal Budget was also presented on the l8th November, 2009. Mr Speaker, it appears the Hon Minister has an attachment to the date of l8th November. Perhaps, at the appropriate time, he can tell us the reason for choosing that date.
Mr Speaker, the first thing I want to note about this Budget is that, unlike precious Budgets, the Hon Minister did not start by reminding Ghanaians of what the Government inherited in 2008. And the key words here are that, “he did not start”. At least, the message has finally sunk in. Mr Speaker, Ghanaians want to know what he inherited. But more importantly, they want to know what he is doing about it. So I am glad he was able to do that.
Mr Speaker, a careful reading of the Budget Statement will reveal unusual characteristics. Mr Speaker, this relates to the issue of full disclosure or otherwise of facts and figures which reflect the true state of the economy; in particular, the non-disclosure of the status of the net arrears accumulated in the course of the fiscal year 2010, leads to an assessment of economic performance, which is totally different from reality.
Mr Speaker, as one reads the Budget, and comes across several instances of failed promises, one cannot help but be afflicted with fear and panic. Mr Speaker, fear of being hit with higher taxes and panic of further broken promises with no relief in sight. Mr Speaker, this is why some of us have called this Budget the “fear and panic Budget” alias “Amina Budget”.
Mr Speaker, in preparing for the Budget for this year, I have had to go back to reflect on what I said last year about what I expected for 2010. Mr Speaker, with your permission, I want to quote what I said would happen in 2010. No, about 2010,
Mr Speaker, with respect to the Budget
Mr Speaker, on the commitment basis, the target was 7.6 per cent but the deficit is between 15 and 17 per cent. Mr Speaker, another case of missed targets. Mr Speaker, finally, for 2010, gross international reserves were targeted at 2.5 months of import and the provision estimate is that it would be 3.2 months. Mr Speaker, however, if one accounts for the large accumulation of arrears, then these targets would have been missed.
Mr Speaker, lest we forget, this record of failing to achieve targets or failed promises is not new. Mr Speaker, let me take you back to 2009; real GDP growth was targeted at 5.9 per cent but the actual was 4.1 per cent. Mr Speaker, sectoral targeted growth rates were 5.7 per cent, 5.9 per cent and 6.6 per cent for the agriculture, industry and service sectors respectively.
Mr Speaker, the actual growth rates realised were 6.1 per cent. 1.6 per cent and 5.9 per cent. Mr Speaker, again, like 2010, two out of three targets were missed. Mr Speaker, in 2009 again, on inflation, the target was 15.3 per cent for average, the actual realised was 19.3 per cent. Again, another missed target.
Mr Speaker, in 2009 again, end period inflation was targeted at 12.5 per cent, the actual realised was 19.25 per cent.
Mr Speaker, again, another missed target.
Mr Speaker, the cash deficit in 2009 was targeted at 9.4 per cent of GDP but again, the actual realised was 9.7 per cent. But Mr Speaker, on the cash, when you factor in the arrears accumulated, that deficit would have amounted to 11.1 per cent of GDP. Mr Speaker, again, another missed target.
Finally, on gross international reserves, the target was 2 months of import cover, the actual is 2.5 but it does not include the accumulation in the arrears so in reality, it is below target.
Mr Speaker, what do we conclude from this? Mr Speaker, that for both 2009 and 2010, all the targets were not achieved. [Interruptions.] Mr Speaker, in 2009 in particular, what was most worrisome was that per capita income which stood at US$12.31 in 2008 fell to US$11.08 in 2009. Mr Speaker, we became poorer.
Mr Speaker, the question one may ask is, is this a “Better Ghana agenda”? [Uproar.] Mr Speaker, in the light of these two years record of failure to achieve targets, can anyone seriously claim that the “Better Ghana agenda” is on course? -[Interruptions.] Mr Speaker, when you read and with your permission, I quote page 5 of the Budget Statement:
“GDP growth of 4.1 per cent in 2009 compared to the sub-Saharan Africa growth of 2.0 per cent.”
Mr Speaker, we are trying to compare ourselves to sub-Saharan Africa. Why go that far? Mr Speaker, let us come closer home, the West Africa area where we claimed to be the leaders.
Mr Speaker, when neighbouring countries are looking at 7.3 per cent of growth in 2010, we are happy with 5.9
