Vice President John Dramani Mahama has defended the 2011 Budget Statement, after a storm of opposition attacks since it was presented to Parliament on Thursday November 18. It was under the theme “Stimulating Growth for Development and Job Creation.”
However, the minority members of parliament (MPs) say the proposed tax increases could force investors to flee the country, and further discourage potential investors from coming into the country.
They claimed the budget could not stimulate growth and create employment, as suggested by the Finance and Economic Planning Minister, Dr. Kwabena Duffuor.
But, Vice President John Mahama has rejected the opposition’s fears in a speech he delivered in Accra on Friday November 19, to officially open a new edifice to house the headquarters of the Union of Industry, Commerce and Finance Workers.
He told the gathering that the proposals in the 2011 budget were crucial to help keep the national economy in shape.
“The thrust of this year’s (2011) budget is to accelerate the growth of the economy, so that we can justify being indicated a middle income country. The budget also has a thrust of dealing with outstanding issues such as the perennial arrears, commitments and deficits that have always dogged the budget. And so we need to increase revenues to deal with perennial challenges like the TOR debts, once and for all,” he said.
“We need to look at issues of contractors working, based on revenue that does not exist. Contracts are given, based on the consolidated Fund, and when contractors finish their work, there are no monies in the budget to pay them, and so we need to look at all that.
“But, most importantly, we need to look at the implementation of the single spine salary structure, because it has obvious budgetary implications for the economy, and if we are to implement it smoothly, then we must find revenue for that, and so there would be innovative measures within the budget to see how we can raise additional revenues, in order to smoothly implement the SSSS,” he noted.
The Vice President reiterated the need for Ghanaians to manage their expectations, in relation to the production of oil. “In the second week of December, Ghana will transit into an oil producing economy. We need to manage the expectations that people have, because a lot of people think that with the first production of oil, Ghana’s problems are over. Even in the 2011 budget, oil revenues do not play significantly more than ten per cent of the size of the budget,” he noted.
The Vice President however, noted that oil would continue to grow, in terms of its contribution to the budget in subsequent years.
He however, warned of the unpredictable nature of oil, in terms of pricing, and the need for the government to focus on predictable sectors of the economy to raise more revenue to transform lives.