2003 Budget and the Poor
allafrica.com Public Agenda (Accra) EDITORIAL March 3, 2003 Posted to the web March 3, 2003
Accra
In spite of all the gloss being put on the 2003 budget, the economic outlook is not good for the Ghanaian. At ¢9.200 the minimum wage has broken the dollar barrier for the first time in recent times. But that is cold comfort against the rocketing cost of goods and services. Transportation to and from the office alone is likely to erode one third of the new wage.
Then comes the cost of crude oil. The uncertainties about whether or not America will invade Iraq and the paralysis visited on Venezuela by the opposition's resolve to remove President Hugo Chavez has conspired to push oil prices to the high heavens. At the time of going to press on Friday, Brent Crude was offered on the international market at $40 a barrel. At the time the Ministry of Energy increased petroleum prices by nearly 100 per cent, crude was offered at $28 a barrel. On the evidence of the rising fuel imports alone, Ghanaians are in for a tough time.
The bad news for most Ghanaians is that it is not only oil that poses a serious challenge to this nation's ability to balance the books. The electricity front is equally challenging. The onset of the dry season means that the water level in the Akosombo Dam is lowering in its ability to hold water to turn the turbines.
As President John Agyekum Kufuor outlined in his Sessional Address to Parliament, we are all in for a very rough ride this year. The Government, according to Minister of Finance Yaw Osafo-Maafo faces the challenge of dealing with higher than expected expenditure on wages and salaries, higher than anticipated subsidies to utility companies and worse of all substantial shortfalls in expected foreign inflows.
The shortfall means that the over-burdened Ghanaian will have to fork out the difference if Government should meet its target in developmental projects. These are hard times but we expect the government to cushion the poor and vulnerable in society.
According to the Finance Minister Government has allocated c4,633 billion made up of ¢3,553 from state resources, c680 billion from the HIPC fund for 2003 and c400 billion resources left over from 2002 to implement programmes and projects directly affecting the poor. Public Agenda hopes this would translate into quality education, affordable medical care, good social services and general improvement in the living standards of the rural folks. We hope the HIPC disbursement will go beyond paper guarantees.
Public Agenda is also happy that the government has taken the bold step to slap additional tariffs on imported poultry and rice. This will go a long way to protect local industries against unfair competition. In fact this paper thinks that five percent levy on rice is not enough and that government should have made it at least 10 percent to discourage the mad rush for foreign goods.
The retention of the National Reconstruction Levy for another three years is in the right direction. We urge the Government not to give in to those clamouring for a review. The banks are making obscene profits for virtually doing nothing. They must pay towards the infrastructure re-engineering of this country.