Experts express opinion on the Budget

Story: Boahene Asamoah
SOME economists and investment analysts have expressed varied opinions about the 2008 Budget Statement and Economic Policy Statement presented to Parliament yesterday by the Minister of Finance and Economic Planning, Mr Kwadwo Baah-Wiredu.
In an interview shortly after the delivery of the almost two-hour abridged version of the budget statement, the experts were unanimous in their opinion that the budget was comprehensive.
The new World Bank Country Director for Ghana, Mr Ishac Diwan, said the country’s focus on infrastructural development, as outlined in the 2008 budget, was surely the way to go if the country aimed at attaining a middle- income status.
Mr Diwan said “infrastructure is a major contributor to growth and development”, adding that it provided the needed tools to facilitate business and growth.
Mr Diwan, who is also the Country Director for Liberia, Burkina Faso, Sierra Leone and Guinea, said the government’s targets as outlined in the economic policy statement were realistic but he was quick to add that economic growth and developed hinged on good policies and projects.
He said the World Bank would study the budget and offer any suggestion and support that the government needed to achieve its targets.
The main thrust of the 2008 budget is hinged on “growth through massive infrastructure development”.
This year’s budget, as is characteristic of the government, is titled, “A Good and Brighter Future” and it is focused on investments in the road, energy and water infrastructure provision.
For his part, a former Minister for Public Sector Reforms, Dr Paa Kwesi Nduom, warned of potential industrial unrest as a result of what he said was the silence of the 2008 budget statement on pay reforms.
Dr Nduom, who is a presidential aspirant of the Convention People’s Party (CPP) and Member of Parliament (MP), said the budget did not address pay reforms adequately, adding that that could be a source of potential industrial unrest in the country.
Dr Nduom, who was in charge of restructuring pay reforms and the setting up of the Fair Wages Commission, again observed that the government needed to implement its policies concerning the energy situation, especially the expansion of the Osagyefo Power Barge.
He expressed concern about the decline in the performance of the manufacturing sector and said the budget again did not specify what was being done to address the constraints.
Dr Nduom said the government needed to address the issue of the importation of cheap products, a situation which he said was hurting local industries, saying that “no country has been able to develop without its manufacturing sector”.
“The manufacturing sector provides jobs for the people and there is the need to support that sector,” he added.
For his part, Dr Sam Mensah, an investment analyst, said the budget provided good news for the private sector in the area of regulatory framework improvement.
He mentioned, for instance, the government’s policy on capital allowance and stamp duty as some of the initiatives to support the private sector.
On the government’s decision to introduce a 10-year yield bond to stimulate secondary trading activity, Dr Mensah stated that it was critical, since it would provide a local bench mark for investors.
He said that was riding on the back of the government’s successful introduction of two- and three-year bonds on the secondary market and also the foray into the international market to source the $700 million euro bond.
The government has projected a 6.3 per cent Gross Domestic Product (GDP) growth for 2008, with a six to eight per cent inflation target.