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Labour, economists hail budget ... but wants commitment to positively implement

By: Ama Amankwah Baafi
Mr Edward Kareweh
Mr Edward Kareweh

The 2019 Budget Statement and Economic Policy of the government has received positive endorsements from labour groups and some economists, describing it as friendly and ambitious.
However, they called for greater commitment and bold initiatives to ensure the smooth implementation of the measures announced to the benefit the people.
They were of the view that the budget should be able to create more jobs, raise more revenue, cut expenditure and ensure increased food production.

Views of labour
In a statement issued in Accra yesterday, the Trades Union Congress (TUC) acknowledged the initiatives to provide jobs including infrastructural development, modernisation of agriculture, industrialisation, entrepreneurship development, revenue mobilisation and social interventions.
“The construction of railway, roads and highways, bridges and housing for workers will provide jobs for thousands of young people. Moreover, government announced plans to assess the labour market response and employment impact of government policies, programmes and projects,” it noted.
While acknowledging the critical role of the Nations’ Builders Corps (NABCO) programme, the TUC urged the government to consider registering the NABCO beneficiaries with the Social Security and National Insurance Trust (SSNIT) to inculcate in them the spirit of long-term savings.
The statement said besides the NABCO, in the last two years, the government had either recruited or given financial clearance for the recruitment of more than 88,000 workers into various public service institutions in the agriculture, health and education sectors. “The plans to provide financial resources to the Ghana Statistical Service (GSS) and the Ministry of Employment and Labour Relations (MELR) to collect quarterly employment data was a step in the right direction. 
It said the provision of the public sector employment would go a long way to alleviate the challenges facing young jobseekers and also help to improve public service delivery, particularly in the health, education and taxation.

Private sector
The statement said the only way to create jobs on a more sustainable basis was to empower the domestic private sector to create more decent jobs for those who could not be employed in the public sector.
“Government must use the various ‘special initiatives’ including the, “one-district-one factory”, the, “one-village-one-dam” and the “planting for food and jobs” to shore up the domestic private sector. Government must also proactively provide support to the private sector in a form of trade policy reforms to empower our private sector to compete and expand,” it stated. 

On taxation, the TUC commended the government for scrapping the 35 per cent tax on incomes in excess of GH¢10,000.
“We encourage government to review all tax exemptions and scrap those that are not benefiting the country. Instead, government should provide tax incentives for local firms that are able to employ a significant number of university graduates, in particular, and young people in general,” it said.  

The General Secretary of the Industrial and Commercial Workers Union (ICU), Mr Solomon Kotei, described the 2019 budget as friendly, Edmund Smith Asante reports.
Speaking to the Daily Graphic, he said, “We will say it is a friendly budget. At least the tax burden has not been doubled. We have seen some relief from the 35 per cent to 30 per cent and ensuring that the average Ghanaian worker can have some relief.”
He, however, said what was expected from the budget was the opening and creation of sustainable jobs. “We are not just interested in the casual and contractual jobs, because as soon as these end, the people come back to the unemployment situation.”
Mr Kotei said the budget also showed that the government was focused. “Now that the IMF is gone, you could see that they are not holding up but as we study the details of the budget in the coming days, we will be able to know the exact direction they want to carry this economy, but on the face value of it, I will say this is a friendly budget,” he reiterated.
The General Secretary of the General Agricultural Workers Union (GAWU) under the Ghana Trades Union Congress (TUC), Mr Edward Kareweh, has asked government to show commitment towards the implementation of the projections in the 2019 budget,  Ama Amankwah Baafi, reports  .
With particular reference to the agricultural sector, he said often the level of commitment to implement budgets is not in commensurate with the putting of figures together and making projections.
“That has been my disappointment. It appears there is nothing new in the way we have been doing things and there is no commitment. It is repetitive and yet it is unending. It is not just about we are going to do this or that, we need concrete commitments and numbers and how much it will cost us”, he stated in an interview in reaction to the 2019 Budget Statement and Economic Policy of Government presented to Parliament last Thursday.
He noted that the frustration had been that, so much was budgeted for, yet little was achieved, which undermined the trust the citizenry and stakeholders in the sector had for policy makers.
“From the onset, they know they can’t achieve what they put down and be able to implement the programme to the latter,  yet they put it there. It doesn’t engender trust,” he said.
Mr Kareweh stated that any strategy to develop sustainable soyabean and maize production as raw materials to feed the poultry industry, should be spelt out in details in terms of the types and target.
“We need to deliberately put in soyabean production mainly for poultry use and for maize production, yellow corn is very good for poultry. So, we need to strategically increase the inputs for the poultry industry and must be well coordinated so they won’t be diverted to other areas or for other uses,” he explained.

Views of economists
Prof. Peter Quartey of the Institute of Statistical, Social and Economic Research (ISSER) and Dr Said Boakye of the Institute of Fiscal Studies (IFS) concurred in separate interviews that a prudent execution of the budget and strict adherence to the targets set would ensure that the budget’s thematic goals of spurring growth through massive investments in public infrastructure, boosting job creation and consolidating recent macroeconomic stability were realised, Maxwell Akalaare Adombila, reports.
This should ultimately cement the gains chalked up and improve the quality of life of the people.

Execution key
Prof. Quartey, who is the Head of the Economics Department at ISSER, said implementation was now  key.
“If the government can implement 70 per cent to 80 per cent of the things in the statement, there will be a lot of transformation in terms of infrastructure and jobs. Also, some of the key sectors will experience positive things
“So, implementation, for me, is key,” he said.

Deficit too narrow
He was also concerned about the deficit target of 4.2 per cent of gross domestic product (GDP) for next year, explaining that it was too restrictive and could hurt growth.
With government spending being the main driver of economic growth, Prof. Quartey said a lower deficit target meant that public spending would be restrained, resulting in less economic activity. 
“That is why, for me, a deficit of five per cent of GDP was reasonable rather than something lower,” he said.

Revenues too high
Like Prof. Quartey, Dr Boakye, who is a Senior Research Fellow at IFS, was also concerned about the deficit figure, describing it as “a bit low.”
“Although it is a growth budget in some way, on paper, the increase in the deficit is not so much,” he said. 
Dr Boakye was also worried that the government continued to be over ambitious with revenue projections, in spite of suffering from such zealousness in the last two fiscal years.
He said in the event that revenues underperform, the government could refuse to cut expenditures, as had been  the case in 2017 and 2018, resulting in macroeconomic instability.