The Institute of Statistical, Social and Economic Research, ISSER, says the government’s description of 2020 as a year of roads is worrying, as this could lead to a huge budget deficit. Finance Minister Ken Ofori-Atta, during the 2020 budget presentation to Parliament, announced that government is going to channel resources to fix many of the country’s deplorable roads.
But ISSER believes the decision could be problematic for the economy if not properly handled.
“The current politicization of road infrastructure with the ‘no roads, no votes’ mantra is worrying as we move into the election year. Indeed government has described the year 2020 as the year of roads and it is indeed worrying because if we are not careful, we will run into a huge budget deficit. We want to win votes , government provides roads, of course it’s a legitimate cause to demand for roads, but we also have to be a bit circumspect otherwise we will have the political business cycle again where we overspend in an election year and then we come and clean-up and do the same”.
Director of ISSER, Prof. Peter Quartey, made these remarks while presenting the institution’s findings at the ISSER 2020 Budget Review, which touched on industry, agriculture and the services sectors.
ISSER is also concerned about government’s interventions particularly in the tourism sector, which it says are not enough to grow the sector.
The government is to spend more to deliver infrastructure projects such as roads, schools and hospitals in 2020 than it has done in any of the past three years.
In the 2020 budget, the government projects to spend GH¢9.3 billion, equivalent to 2.3 per cent of GDP on selected infrastructure projects across the country next year.
“The projected amount is 53.5 per cent higher than the 2019 projected outturn, which was GH¢7.7 billion, the Minister of Finance, Mr Ken Ofori-Atta, announced this to Parliament when he presented the 2020 Budget and Economic Statement.
He said of the amount, domestic financed capital expenditure was estimated at GH¢3.8 billion (0.9 per cent of GDP).
“The remaining GH¢5.5 billion is expected to be financed from foreign resources, comprising a combination of project grants and loans, Mr. Ofori-Atta said.
Mr. Ofori-Atta said all over the world, infrastructure development had been the bedrock for economic development and an avenue for wealth creation.
Over the last three years, he said, the government had focused on road and rail sector development, the development of fish landing sites, expansion of water and sanitation systems and the delivery of the Infrastructure for Poverty Eradication Programme (IPEP) which sought to promote inclusive development of all parts of the country.
The minister stated that COCOBOD had also secured funds to continue with ongoing and new cocoa roads across the country.
“Work on these roads will also commence soon.”
He stated that as part of the government’s new initiative to complement the traditional execution of road projects, it had launched the Accelerated Community Road Improvement Initiative.
Just this month, he said the Ministry of Finance released funds to the 48 Engineers Regiment of the Ghana Armed Forces, who are busy working on some roads in communities in Greater Accra.
The Year of Roads
Mr. Ofori-Atta said the government had also been able to mobilize the financing for over 150 roads nationwide.
“Ghanaians want action on our roads, not words or plans or Green Book claims about what has been done. We intend to swing into action and let our work do the talking for us.
“With this large number of roads to be constructed, the year 2020 can aptly be described as The Year of Roads along with a focus on all our flagship programmes,” he said.
Source: Citi Business News