Today the Nana Addo Dankwa Akufo-Addo led government presented its second budget which contains revenue and estimates for 2018 to parliament.
The 2018 budget according to the Minister of Finance, Ken Ofori Atta, seeks to create jobs, cuts tariffs in electricity, support SME’s and investments in the key sectors of the economy.
Presenting the budget the Finance Minister said, “the 2018-2021 Budget is informed by the President’s Coordinated Programme for Economic and Social Development Policies which aims at creating a conducive environment for the private sector to thrive, propel growth and create employment opportunies, especially for the youth. In this regard, Government’s policy objectives for the medium term will aim at:
- Stabilizing the economy and setting it on a path of sustained, diversified and resilient growth;
- Optimizing the key sources of growth in the economy on sustainable basis;
- Enhancing a competitive and enabling business environment for private sector-led growth;
- Formalizing the informal sector;
- Building a strong and resilient economy able to withstand internal and external shocks;
- Promoting agro-industrial enterprises as the basis for the “One District, One Factory” initiative; and
- Creating entrepreneurial and employment opportunities, especially for the youth.”
The Finance Minister said, “this will be underpinned by a stable macro-economic regime. The strategies for achieving these broad macroeconomic objectives include the following:
- Promoting inclusive growth without compromising fiscal consolidation;
- Anchoring fiscal policy on reducing the fiscal deficit to low and sustainable levels, sufficient to reduce the overall public debt burden;
- Strengthening the inflation targeting regime and pursuing complementary monetary policy to promote monetary discipline; and
- Pursuing complementary external sector policies to ensure exchange rate stability and favourable current account balance.”
He added that, consistent with our medium-term development policy framework, we have set the following macroeconomic targets for the medium term (2018-2021):
- Real GDP to grow at an average rate of 6.2 percent between 2018 and 2020;
- Inflation to stay within the target band of 8±2%;
- Overall fiscal deficit to remain within the fiscal rule of 3-5 percent;
- Primary balance expected to improve from a surplus of 0.2 percent of GDP in 2017 and remain around 2.0 percent in the medium term; and
- Gross International Reserves to cover at least 4 months of imports.
Mr. Ofori-Atta pointed out that, based on our policy objective of ensuring macroeconomic stability, and growing the economy for job creation, whilst protecting social spending, the following macroeconomic targets are set for the 2018 fiscal year:
- Overall GDP growth rate of 6.8 percent;
- Non-oil GDP growth rate of 5.4 percent;
- End period inflation rate of 8.9 percent;
- Average inflation rate of 9.8 percent;
- Fiscal deficit of 4.5% percent GDP;
- Primary balance (surplus) of 1.6 percent of GDP; and
- Gross Foreign Assets to cover at least 3.5 months of imports of goods and service.
Below is the final budget speech as delivered by the Minister of Finance, Ken Ofori Atta.