The Director of the Institute of Statistical, Social and Economic, ISSER, Prof. Felix Asante has called for a discontinuity of the trend in election year of the country where development projects are undertaken vigorously about six months to elections.
“See development as a continuous process and should begin in the first year a new President is elected”, he declared.
Prof. Asante was speaking in Accra on Tuesday at the Graphic Business Breakfast/Meeting Series. The other panelist was Hon. Seth Terkper, Minister of Finance. It was chaired by Ing. Kweku Awotwi.
The topic for discussion was: Election Year Budget Deficit: Implications for Economic Stability.
Prof. Asante traced historical antecedent of budget deficit and postulated that the story is the same for all governments since the 4th Republic.
He assigned reasons for the trend where governments delay implementing development projects until a term is about to end. Some of the reasons were that there is always a desire to retain power; the citizenry using the appetite of government to retain power exert pressure and the opposition demanding accountability.
The director stated that all are to blame for the canker and called for the scaling up of discussions to find solutions.
Prof. Asante also noted that the exchange rate tended to be more volatile in election years and this situation does a lot of harm to the economy.
He wondered what would happen if the inflows and other funding sources holding the cedi now disappear and certainly it is anticipated that such a situation would arise.
In his contribution, Hon. Terkper stated that in general, a 4% to 5% budget deficit was considered reasonable and acceptable.
He pointed out that structural measures have been put in place to prevent Ghana drifting to HIPC status.
The Finance Minister pointed out that some of the areas worked on were reforms and improvement in budget systems and refinancing to extend tenor and reducing crowding thereby lowering cost.
On budget over-run, he disclosed he was in touch with his colleague ministers and has asked them to monitor their expenditure.
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