SEND GHANA has drawn government’s attention on its budget credibility and overdependence on donor funding, which cut across every sectors of the economy.
According to SEND GHANA, these weaknesses possess a threat to attaining the Ghana Beyond Aid agenda, and as well as accomplishing the SDGs.
At a press conference held on Wednesday, November 20, 2019, at the Angel Hill Hotel in Accra, to brief the media on its assessment on the 2020 budget, the deputy country Director of SEND GHANA, Dr. Emmanuel Ayifah (PhD), noted that, the degree to which governments execute budgets as planned and as approved by parliament, is key to effective delivery of public services.
Saying that, “We expect the budget to guide spending towards effective service delivery; with specific concern for the impact on the poor and vulnerable, and in the attainment of the SDGs.”
“Our analysis of previous year’s budgets (2017-2019), show repeated poor budget execution rate, evident in either under spending or over spending in aggregate and/or within a specific area,” Dr. Ayifah noted.
He however disclosed that, their analysis on the 2020 budget, identified some cross-sector and sector-specific concerns.
Cross-sector observations Dr. Ayifah, said, ensures fiscal discipline to meet budget credibility standards. According to him, total expenditure for 2020 amounts to Ghc84.5 billion, yet government expects to mobilize approximately GHC 67.1 billion in revenue and grants to finance this expenditure.
“As has become a practice, government is unable to meet its revenue targets year on year. The expenditure for 2020 is in a deficit of 21 percent as against 19 percent in 2019. The higher-than-programmed fiscal deficit result mainly from revenue underperformance, which in the year-to date, achieved an execution rate of 86.4 percent. Total Revenue and Grants for the period, amounted to GH¢36.3 billion, (10.5% of GDP) relative to the target of GH¢42.0 billion (12.1 percent of GDP).
Although expenditures were also below target, the expenditure execution rate of 92.5 percent outstripped the revenue execution rate by a significant 6.1 percentage points.
Our budget deficit keeps increasing with non-fulfillment of expenditure commitments, year on year, due to shortfalls in domestic revenue mobilization,” he reemphasized.
Situations like these he said, are the reasons why governments resort to the international market to raise funds to finance expenditure, thus, ballooning the country’s debt, as evident in the inability to meet the debt to GDP target.
Dr. Emmanuel Ayifah, further intimated that, the agenda to go beyond aid must be seen to be working through incremental and sustained domestic financing that will take the country out of the deficits that has to be funded through borrowing. Saying that, “We expect the budget to guide spending toward effective delivery of public services.”
However, he said, repeated deviations, as has been the case overtime, diminish confidence and raises concerns about commitments to projected allocations to the various MMDAs.
He explained that, the implications of weak budget credibility adversely affect the delivery of public service, with devastating consequences on the poor and vulnerable Ghanaians.
“We call on government to ensure a systemic change from the observed paradigm of repeated budget deviations. Government should take steps to prepare realistic budget to avoid credibility issues. We therefore urge the government to take appropriate steps to prepare realistic budget and endeavor to timely release all budgetary allocations to MDAs,” Dr. Ayifah reiterated.
Below is the full release indicating the various cross-sector and sector-specific concerns on the budget
2020 Budget Analysis Press Release – SEND GHANA
