In keeping with the 67th article of the 1992 constitution, the President on, Tuesday, 21st February, 2017, delivered, through parliament, to the nation, a statement on the state of the nation. Beyond the fact that this occasion creates a ceremonial opportunity for the president to interact with parliament, the occasion, is usually used to outline some key policy directions of the government. Especially, coming on the heels of an elections and a transaction, slices of groom and doom that was served on the day, did not come to me as a surprise.
Certainly and conventionally, new governments are always quick to keep the public in the known on some low ebb across key sectors of the economy. The concept has been under-girded by the idea that once the public know the depth from which the new government is cocooned, they will be measured and charitable in their expectations. As it has been philosophized that one’s height of success is better judged by the depth from which they rise.
Having monitored the event closely, i want to highlight the aspect of the eloquently delivered speech that bothered on Financial Management of the country, specifically the issue that related to budget deficit.
I choose to highlight this issue because not only does it goes to the heart of the country’s economy but more so, it has been a major subject of debate, following the event. Indeed the minority picked on this issue, in extensio, in their much anticipated press briefing, the day following the SONA.
While pontificating on some macroeconomic issues, the President, in his statement the 9% budget deficit to economic mismanagement, noting that the figure could even go up to 1o.02, in the event that committed projections are added.
This view, has been vehemently been opposed, subsequently by the minority. Indeed, their response on this issue was so elaborate and extensive that whoever read their statement will never lose the importance of their point. The minority, in their briefing sought to stress that budget deficit is not a function or cannot arise out of financial impropriety or otherwise.
While the nexus or correlation between budget deficit (difference between expenditure and revenue expressed in percentage of GDP) and financial management is quiet blur .I don’t agree with the minority when they assert that budget deficit cannot be attributed to financial mismanagement. In their statement, they sought to suggest that since projected revenues are not actual revenues in the coffers of the state, the previous government cannot be held blameable for the 9% budget deficit that has been recorded, perhaps projected. Much as i agree to some extent, i equally think that such line of argument is very reductionist.
In my considered opinion, governments have every legal and constitutional responsibility and mandate to secure the needed revenues that can keep the wheels of the economy running. Failing to mobilise the much needed revenues means that your budget- expenditure differential, will keep widening. This will certainly take its toll on the general macro-economic environment, job creation, and GDP growth.
Again, i think it is reductionist to assume that governments only stand accused or are accountable for only monies that in the chest of the state and not what they can secure into the coffers. I want to believe that financial management goes beyond the amount that a country has in its chest. To me, if Ghana has the capacity to generate GHC 50 and she generates less of the amount, say GHC35, that in itself can be a clear instance of financial mismanagement. When this shortfall occurs, it means we have failed to manage all the mechanisms that place us in better stead of managing or taking control over our cash inflows. That is equally a clear instance of financial mismanagement.
There is certainly no doubt about the fact that alot of our monies go down the drain due to corruption, bureaucracies, inefficiency in the public sector, unexplained tax waives and exemption, huge tax holidays for expatriate companies, outright impunity and financial malfeasance. If all these interfaces acts against us in meeting our revenue targets, then it is fair for anyone to suggest that budget deficit can be attributed to corruption or financial mismanagement.
In the face of ballooning national debt, budget deficits, budget overruns, financial malfeasance in the management in the public sector and huge revenue shortfalls, our surest bet as a nation, is to not only hold our governments accountable for what we are able to generate but most importantly, we need to stress the opportunity cost of not generating what we have the capacity to generate. In my view, the numerous artificial and man-made wastes that redirect public funds into private pockets must be addressed, urgently.
Going forward, we should change the benchmark for determining the causal effect of budget deficit. Yes, and i submit that a government’s inability to meet revenue projections must in itself be accredited to financial mismanagement.
What we equally need, as the President alluded to are major public sector reforms that will reduce to the barest minimum, the many corrupt practices, waives and inefficiencies that places our economy in dire straits.
Sustained and concerted efforts must be made to plug all the loopholes which create avenues for some public officials to steal from our coffers, denying much the opportunity to share in the prosperity of our country. The policy of surcharging officials whose act of omission or commission, lead to loss of huge amounts of incomes should be consolidated and sustained.
Finally, we need as truly live by the tenets of patriotism, eschewing all acts and practices that put our country in a negative light. Until the attitudinal issues are addressed, we will not be able to meet our revenue targets.
Ghana must certainly rise to the occasion this time.
Samuel Osarfo Boateng
Creasta Consult Writing Consultancy(Press Releases, Event reporting , Advertorials, Book Reviews,Thesis and others)