General News of Thursday, 28 February 2013

Source: citi fm

Demands in electioneering periods increase Gov’t deficit – PV Obeng

A Senior Presidential Advisor, P. V. Obeng has put the blame of the nation’s rising deficit on the actions of the populace during election periods.

According to him, due to the undue pressure public servants tend to put on governments, especially during election periods, the nation’s budget deficit increases exponentially.

Mr. Obeng told Citi News: “It is a learning curve that government and the population together have to go on because in most election years, the population and sections of them holds government to ransom and you can count the number of attempted strikes, hold ups, and real strikes and hold ups that took place in the election year.”

In his opinion, such actions and demands increase the expenditure figures in the country’s annual budget.

Ghana has a record of fiscal indiscipline in election years in the Fourth Republic, characterised by expenditure over-runs and growth in borrowing which often led to an expansion of the budget deficit and distorted the balance of the macro-economy.

At the end of 2012, Ghana’s budget deficit stood at GH¢8.7 billion, amounting to 12.1% of GDP using the rebased GDP numbers (or some 20% of GDP in terms of the old GDP series).