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Business News of Thursday, 28 February 2013

Source: citi fm

Government must address cyclical budget deficit - Kwaku Kwarteng

Government has been advised to urgently address the cyclical increment in the country’s budget deficit which mostly occurs during the electioneering period.

The New Patriotic Party (NPP) Legislators on Wednesday, during their presentation of what they termed ‘the true state of the nation’s address’, accused the government of increasing Ghana’s debt from GHC 9.5 billion to GHC 33.5 billion within four years.

A Senior Presidential Advisor, P. V. Obeng, however in an earlier interview indicated that the demands of public servants on government during election periods tended to increase its expenditure figures, thus resulting in the rising deficit.

The NPP MP for Obuasi West, Kwaku Kwarteng has however suggested in an interview on Citi Fm Thursday that, the cycle should be ‘nipped in the bud.’

“A deficit of GHC 8.7 billion; we’ve never seen anything like it before and it suggests to us that not only do we have these difficulties in an election year, the situation is actually getting worse… It is not sufficient excuse to say, ‘well it happens all the time’.

According to him, “some of the difficulties we saw in 2012 are cyclical problems; they come almost every election year but it is worrying when you see the gaps widening. If things are really deteriorating, some of the deficit and budget overruns we saw in 2012, we’ve never seen before in percentage terms.”

Mr. Kwarteng noted that the people of Ghana should be made to see the interventions which government will put in place to pay up Ghana’s debt.

He clarified that the GHC 33.5 billion Ghana owed in terms of loans “does not include the Chinese loan. If you add the Chinese loan, we are getting to about GHC 40 billion, that is big!”

The NPP MP suggested that “those in charge of the economy of this country should take note of this and say that going forward, we will do something about this.”

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