The Finance Minister, Ken Ofori-Atta, has conceded tough conditions exist in the Ghanaian economy, but remains optimistic that the 2019 budget statement will ameliorate the hardships and restore growth.
Presenting the 2019 budget statement in parliament on Thursday, he stated: “We have managed to ease the hardships. We are not there yet and we have a long way to go; what is clear is that the nation is moving forward under this government”.
He assured that: “We are set to deliver a future that meets the aspirations and hopes of all Ghanaians in this budget”.
Government is aiming to narrow its budget deficit to 4.2 percent of gross domestic product in 2019, and forecasts GDP growth of 7.6 percent including oil.
Additionally, an expected inflation rate of 8 percent by the end of next year has been targeted; the same as the 2018 target. Non-oil growth is seen at 6.2 percent, Ofori-Atta said.
On revenue mobilisation, Mr. Ofori-Atta indicated that government will intensify compliance measures and broaden the tax net.
Sovereign bond issuance
Government intends to issue sovereign bonds of up to US$3billion, to be used for financing critical infrastructure projects and liability management.
Among other policies is a proposal to secure up to US$1.5billion long-term financing for GETFund on the back of a portion of VAT receivables, as prescribed in Act 581, and which will be issued in three (3) tranches of US$500million.
This will be used for critical education infrastructure, especially to complete the numerous uncompleted buildings in secondary and tertiary institutions across the country.
GH₵1bn mortgage fund
Government has committed to a GH¢1billion mortgage and housing finance fund, which will be seeded with a minimum of GH¢100m every fiscal year over the next 5 years.
This effort will support the private sector in expanding access to housing, and deepen the local mortgage and construction finance market.
To ensure efficient management of infrastructure, government is expected to soon submit a bill to set up the Ghana Asset Management Corporation.
He also reiterated government’s commitment to invest massively in the development of road and infrastructure, from a variety funding.
On agriculture, government will launch the livestock model of Planting for Food and Jobs called ‘Rearing for Food and Jobs’ (RFJ) with the objective of increasing production of selected livestock, especially poultry.
“We believe we can leverage the PFJ and RFJ programmes, and our other efforts in agriculture, to reduce our large food imports. As a country, we spend over US$2billion every year importing food. For example, we import over a billion dollars of rice, US$320million of sugar, and US$374million of poultry,” he said.
The Minority, on the other hand, indicated that the budget portends no hope and remains just a rehash of old budgets.