Yesterday’s budget review didn’t present too many surprises. The Government did very well with its attempt to renegotiate energy contracts from “Take or Pay” options to “Take and Pay”. If I was teaching a philosophy class, I would have asked – when do we stop taking? The same thing was said during the reading of the 2019 budget so it would have been great to hear “How Far More we have to go”. For now, we only keep hearing LEGACY DEBTS. OK. It still did well.
But it also brings to the fore something that escaped us all – if the intended industrialization was indeed happening at the original pace announced, the excess energy capacity would gradually be taken up. So for now, we can assume they are not on the scale previously told us.
For me the summary of our first-half performance is as follows:
- We are behind on revenues
- We have produced less oil and gas than projected
- We have spent 90%+ of expenditure even though revenues are behind
- The Cedi has depreciated by 8%
- Our debt is up
- We need more than GHC6 billion extra to run Government this year.
- Cocoa and Gold – “it is there like that”
A few general things come up to baffle me-
- I am surprised that with the pressures on our revenue generation and hence increased interest payments and borrowing, we are still claiming the Cedi is depreciating from “external pressures” – isn’t that shifting attention from what needs to be done domestically RE: upping productivity?
- I am surprised that of the 3 arms of Public Financial Management i.e. REVENUES, EXPENDITURES and BORROWINGS, we are still pretending our revenues have seen no shortfall, we are still pretending our borrowings and related interests are not high already, and sad of all, we are pretending our Public Sector expenditure is not largely increasing and remaining untouched other than from a renegotiation of energy contracts – even though it’s our best way out. We should ask the Finance Minister what 2 expenditures together consume close to 80% of our domestic Revenue. It’s Interest Payments and Public Wages. WHAT, in the entire budget speaks to these 2?
- And interestingly with the scary revelations from the Health Ministry earlier this year, that more of our human resources at their career peaks (45-65) are dying from cardio and lifestyle-related diseases – our policy reviews indicate absolutely NOTHING to attempt or pretend to tackle same. And we should wonder – who will run the industries? What quality labor will attract foreign investors? Maybe the real industry we want to grow is the Funeral Industry.
- But for me, here is the EUREKA moment we should all see – for the last 3 decades (30years), there are 9 plagues (just like Egypt) that have plagued our finances EVERY YEAR without fail: Revenue collection shortfalls; market prices and volumes of cocoa; market prices and volumes of oil; Market prices and volumes of Gold; Energy sector costs; Borrowings and interests payments; Public Sector Wages; Spending Inefficiencies; and almighty Corruption – 2019 is no exception.
30 years, the challenges have remained the same. 30 years we have remained fixed to the same Economy basket – sell cocoa, sell gold, sell oil, sell sell sell borrow-spend-sell …. and nobody is asking – WHAT ARE THE NEW FRONTIERS WE SHOULD DARE TO EXPLORE?
In my view; We cannot ourselves remain a tuber economy (informal uproot and sell) and yet expect to formalize our domestic informal sector for tax purposes? Why are we not exploring Renewable Energy? – we should because we can and we must? Why are we not building new economies around Above-ground resources?- We can and must because the Economic and Commercial conversion rates are lower. Why are we not processing our oil, gold, and cocoa? – We may not cover much ground short term, but we never will if we don’t start now. Why are we not investing in people to increase productivity? – We should. If we recognize our citizens are our real resource, we will automatically also value their independent welfare. Why are we not increasing public sector efficiencies and cutting non-capital spending? – Need I say more? Why are we not RUTHLESSLY punishing those taking from our collective wealth in the name of corruption? – well maybe the answer is in Latin – “Corvus oculum corgi non eruit” to wit, a crow does not pluck out the eye of another crow.
WHAT ARE WE DOING ANEW? In the end, all that many Ghanaians will take away from the budget review is this:
A prayer was said, and then some prices and taxes raised. WHAT HAS CHANGED?