GRi In Paliament 19-02-99

Accra (Greater Accra), 19 Feb

The Minority in Parliament said yesterday that the budget proposals are unattainable and out of touch with realities in the country because the targets are based on a false premise that the economy performed well in 1998, they will therefore bring an amendment to this effect soon.

"The 1999 budget and economic policy of the government do not provide a credible basis for national planning ... the data upon which the estimates and projections are based is faulty at best and manipulated at worst.

"We intend to bring an amendment to make it credible, realistic and in touch with the realities in the country today."

Dr Kofi Konadu Apraku, the Minority spokesman on finance, who said these when the debate on the budget commenced, urged the Majority to give them the support when the proposed amendment is brought to the House.

"You need not even acknowledge it, just implement it for the benefit of Ghanaians so that this year would be better and together we move the nation forward," he added.

For 1999, the government intends to achieve among other things, a real GDP growth rate of 5.5 per cent, end of period rate of inflation of 9.5 per cent, overall broad budget deficit of 5.2 per cent of GDP, a primary budget surplus equivalent to 3.8 per cent of GDP and an over all balance of payments surplus of 60 million dollars.

Dr Apraku, who spoke for well over an hour and half touched on the current economic situation, GDP and inflation rates, agriculture, budget deficit, education unemployment and health among other things.

His presentation attracted a lot of points of orders and uproar from the Majority with the Speaker, Mr Justice Daniel Francis Annan, back from his trip to Trinidad and Tobbago shouting "order", "order" several times.

Dr Apraku said notwithstanding the suspicions about the veracity of the 1998 figures, they have also examined the policy proposals and programmes in the budget and concluded that they do not address the critical problems faced by Ghanaians today.

Neither do they provide an effective link between today's challenges, achievements and problems and the challenges of the future, he said.

Dr Apraku said the budget provides no new initiatives nor provisions to deal with improving the quality and access to education, health care and there are no new opportunities for the unemployed to get jobs.

He said it did not also provide any new initiatives for improving irrigation facilities for agriculture, industrial technology and has no provisions for long term financing to the private sector at affordable rates.

"Our call for the setting up of a Ghana Industrial Fund for the divestiture receipts have been ignored, the EDIF Fund like the Business Assistance Fund is likely to become a political patronage for NDC supporters and might fail".

On a point of order, Mr J. H. Owusu-Acheampong, Minister for Agriculture asked the member how he could describe such a fund under the chairmanship of a NPP member, Mr Addison, as fund for NDC supporters.

Dr Apraku said he was not in a position to know whether Mr Addison is an NDC or NPP member.

Accra (Greater Accra), 19 Feb. 

Dr Kofi Konadu Apraku, the Minority spokesman on finance, said yesterday that the real GDP rates in the budget statement is completely unrealistic and in the same way that previous projections have been reduced, this year's may be revised downwards to about 2.5 or three per cent.

He said in the provisional estimates the real GDP rate in 1998 was 4.6 and in view of the problems faced in that year and which the President described as "a difficult year", the figure may be too high.

He said between 1990-1998, real GDP growth rate is estimated at 4.3 per cent, for 1997, by far a normal year, it was put at 5.1 and was revised to 4.2 per cent.

In 1995, the provisional figure for GDP growth rate was 4.5 per cent and revised to 4.0, in 1996, it was 5.2 and revised to 4.6, in 1997, it was 5.1 and revised to 4.2.

"In the like manner, the 1998 GDP growth rate will be revised downwards to between 2.5 or three per cent. The 1998 GDP growth rate of 4.6 per cent is thus completely unrealistic", he added.

To this end, he emphasised that though the 1999 figures are far lower than the targets set in Vision 2020, this figure may not be achieved because the 1998 one is faulty.

On inflation, the member said the end of period rate of 15.7 per cent has been given and cautioned against the over reliance on abstract statistical figures that do not translate into practical tangible results.

He said falling price levels benefits a nation most when it results in declining structure of interest rates, this, however, is not the case in Ghana.

This is because the decline has not reflected in the structure of interest rate spread.

Dr Apraku explained that for the first part of 1998, savings rate was 27.25 per cent while the lending rate was 44.0 per cent, the spread was 16.7 per cent. For the second part of that year, the savings rate was 16.5 per cent and lending rate was 38.5 per cent, the spread being 22 per cent.

He said the spread which should have been declining with the rate of inflation rather went up.

"Could the increasing spread be due to lack of credibility for the inflation figure, ... high risk premium in the face of high business uncertainty?,=94 he asked.

The member pointed out that unless these are clarified and dealt with, the alleged decline in inflation rate will be meaningless as far as it affects the business community and the economy in general.

On budget deficits, he said provisional outrun shows end of year deficit of 6.3 per cent of GDP as against projected 5.8 per cent far above the national economic forum projection of 5.0 per cent for 1998.

He said its should be a matter of concern that the Ministry of Finance calculates deficit based on government expenditures and not on government commitments.

With government in arrears of social security payments, contractors, salaries and other supplies of goods and services, a deficit calculated only on actual payments other than on commitments, has a tendency to under state the magnitude of the budget deficit.

He asked how much arrears the government owes and the time frame within which It will be paid.

Dr Apraku quoted an Akan proverb which translates: "if you can't offer anything to your in-law you do not rob her", saying that if the government would not help the private sector, it must not rob it of its working capital, imposing additional interest expense on it and making them more uncompetitive in a globalised economy. Dr Apraku assured the private sector that when the NPP comes into power they will offer them relief that will liberate their energies and entrepreneurship and set them on the path of unprecedented growth.

On balance of payments, the member said the improved performance indicated by the Finance Minister in the budget is not obvious. He said due to the increase in the net flow of 371.5 million dollars arising out of increased concessional borrowing, the country managed to overcome current account deficit to register an over all balance of payment surplus of 99.4 million dollars.

From the above it is obvious that Ghana's balance of payment surplus is not derived from improved export performance, but is financed from loans with the attendant effect of increase in interest payments and national debt.

''Our total national debt is currently over 7 billion dollars, a per capita debt of nearly 400 dollars per every Ghanaian, or nearly a million cedis per Ghanaian.''

In terms of goods and services, this means that for every 100 dollars generated from exports last year, nearly 35 dollars was devoted to service Ghana's debts.

Dr Apraku noted that the apparent stability of the cedi is rather enforced and thus not sustainable and the country faces an eminent re-emergence of the parallel markets of the past and potential short fall in export receipts.

He explained that if the exchange rate has indeed stabilised with a rate of depreciation of four per cent as stated in the budget, it should encourage exports and discourage imports but that is not the case in Ghana because the rates are forced.

Dr Apraku noted that there has not been any significant change in the structural composition of the economy with gold, cocoa and timber still contributing about 80 per cent of total export revenue.

He said this development is inconsistent with the targets for the Vision 2020, which projects exports to grow from 1995 level of 1.5 billion dollars to 16.7 billion dollars.

''There is a yawning gap between current total export revenue of 1.8 billion dollars recorded in 1998 and the 16.7 billion dollars projected for 2020... we are way off-track in achieving the Vision 2020 target''.

The member, therefore, stressed the need to diversify exports to put the country back on the track.

Mr Reo Addai Basoah, NPP-Kumawu, suggested to the government to contract loans to initiate projects that will increase production and subsequently improve the living standards of Ghanaians, and not to go in for what he termed "consumption loans".

Mr Basoah described government expenditure as "full of waste", and, called for urged the adoption sound and prudent financial practices that will avoid waste and inefficiencies within the system.

He said adequate budgetary allocation should be made for the security agencies, especially the military, so that they will be properly equipped to play their expected role in society.

Accra (Greater Accra), 19 Feb  

Lieutenant-Colonel Enoch Kwame Tweneboa Donkoh (rtd), Minister of Defence-designate, Thursday said every effort should be made for the military and civilians to see themselves as partners in development.

"We should endeavour to build mutual trust and promote co-operation between the military and civilians for the two to build together to enhance national development".

Lt-Col Donkoh was responding to questions from the Parliamentary Appointments Committee when he appeared before it for vetting on his nomination as Minister of Defence by the President.

He said to improve military-civilian relations, the Ghana Armed Forces Command has mounted a vigorous educational campaign on the need for mutual respect between the two.

"During the 'Army Week', last year, among other things, we educated soldiers not to harass civilians and civilians not to use the military asdebt collectors", he added.

On the presence of the Association of the Committee for the Defence of the Revolution (ACDR) in the Ghana Armed Forces, which is perceived as a political wing of the National Democratic Congress (NDC), Lt-Col Donkoh explained that the organisation is voluntary and non-governmental and the Constitution provides for freedom of association.

Besides, he said, "the antecedent to the country's political dispensation is rooted in a revolution and those who prosecuted it had a vision and they are still in the barracks".

The Minister-designate said the military will permit the formation of any other association if there is no tendency of the association politicising the armed forces.

Asked if there is not the likelihood that if any other political party apart from the NDC, wins power the armed forces ACDR would not prevent itfrom assuming political power and that it should be proscribed, he answered in the negative saying that it is as loyal to the state as the rest of the military.

"It is important to remember that you cannot wish the past away. All major national political incidents started from the armed forces", he said, mentioning 28th February cross-roads, 24th February, June Four and 31st December as examples. Asked why expenditures of ministries, government departments and agencies are audited but those of the armed forces are not, Lt.Col. Donkoh said there is a permanent team of auditors from the Auditor-General's Department at theBurma Camp, which audits the military.

He, however, explained that arms, aircraft and ships of the armed forces have never been audited since independence and after, because of national security.

"Besides, how do you conduct an audit when we are in battle", he asked. The Minister-designate explained that this aspect of auditing is before the Public Accounts Committee of Parliament.

On whether there is any ethnic consideration in recruiting people into the armed forces, Lt-Col Donkoh said the military is guided by the constitutional requirement that there should be ethnic and regional balance in recruitment.

He said, even though, the military tries to keep recruitment detribalised, recruits are selected based on their passing medical, physical and intellect tests, adding, "in any case, the Ghana Armed Forces is not conscript, it is voluntary".

Asked to comment on how he can instruct military personnel higher inrank than he is, Lt-Col. Donkoh said his position in the Burma Camp would be that of a political head.

"We are not there to hold ranks, but with my military background I can still keep my rank of a Lieutenant-Colonel."

On the 64 Infantry Regiment (Commandos), he explained that the unit is a special force within the Ghana Armed Forces, saying that there are such units in every country to perform special tasks.

Asked what aspirations the military expects from the state, the Minister-designate said the personnel of the armed forces expect to be properly equipped to effectively play the role expected of them. On retired army officers, he said the expectation is that they would be properly resettled. He told the Appointments Committee that the ministry has commissioned some consultants to do a study on how those officers could be properly resettled. He said when the study is completed and a report is submitted, the ministry would endeavour to address the issue based on the recommendations of the consultants. Asked what should be done to insulate Ghana from wars that are raging in parts of the West African sub-region, Lt.Col Donkoh said countries which are not yet affected by conflicts should help bring peace to these conflict areas "so that they do not spill over to us".

He suggested that the West African peacekeeping force (ECOMOG), should provide more troops to prosecute a vigorous military action in those conflict areas. This should be backed by dialogue among the warring factions and diplomatic initiatives, he said. Lt.Col Donkoh, 60, who until his nomination, has been the Deputy Minister of Defence, attended the Royal Military Academy at Sandhurst in the United Kingdom. He holds an engineering diploma from the Royal School of Military Engineering, Chatham, Kent, in the United Kingdom, among other qualifications.

Accra (Greater Accra) 19 Feb 

The minority in Parliament has called for an investigation into the alleged 40 million dollar loss incurred by Ghana National Petroleum Corporation (GNPC) last year.

This investigation they said will enable the government put in corrective measures to forestall recurrence.

Dr Kofi Konadu Apraku, Minority Spokesman on Finance said this when the debate on the 1999 budget commenced yesterday to support his assertion that corruption, mismanagement and waste of state resources are major enemies to Ghana's development.

''The issue is not that we lost the 40 million dollars but the fact that no investigation have been ordered to determine the cause of the loss so that corrective measures will be instituted...'', he said.

He said Ghana borrowed 50 million dollars from the IDF to finance the gateway Project, five million dollars from a bank in France to procure electrification project and another five million dollars from another French bank in the heat of the energy crises for emergency power generation.

These examples he said shows how scarce national resources are and thus the high opportunity cost incurred when they are mismanaged.

Unfortunately while all these negotiations for the loans were going on, the GNPC was ''busy gambling away our nations scarce resources. In this gamble we lost 40 million dollars''.

Dr Apraku said the donor community will not take us serious adding that this is not the way a country, which sends its officials abroad to negotiate a paltry five million- dollar loan should manage its affairs. He said an urgent question he submitted about two months ago on this matter is yet to be answered by the Minister of Finance.

''Mr Speaker we have met the enemy, the enemy is NDC corruption, it is NDC waste and mismanagement and reckless dissipation of our nation's resources have stifled our growth and development. What is in the budget to correct all these?.''

This threw the house into an uproar and Mr J. H. Owusu-Acheampong, Minister for Food and Agriculture asked the member the source of his information about GNPC's alleged losses.

The member replied that his source was the Ghanaian Chronicle a tri-weekly newspaper.

Dr Obed Asamoah, Attorney General reminded the member that the case is before the courts so it will be wise to refrain from commenting on it. Mr Justice Daniel Francis Annan, Speaker ruled the matter should not be debated on since the case is before the courts. Dr Apraku continued that in spite of the numerous report of corruption, waste and mismanagement in the Auditor General's report, no effective measures are in place to stop these social ills.

Accra (Greater Accra) 19 Feb  

The Appointments Committee of Parliament today met in camera for nearly an hour to decide whether or not to vet Mrs Rebecca Adotey, deputy Minister of Communications-designate. Briefing newsmen on the outcome of the meeting, Mr Kenneth Dzirasah, First Deputy Speaker and chairman of the committee, said by a majority decision, Mrs Adotey will be vetted on Tuesday, February 23. He explained that the committee had to deliberate behind closed doors following an objection raised by the Minority Group that the deputy minister-designate could not be vetted because Standing Order 93 (1) prohibits matters before court to be commented on.

Speaking on behalf of the Minority, Mr Kwamena Bartels, a committee member and MP for Ablekuma North, said the objection was not on the status of Mrs Adotey as Member of Parliament. He explained that if the deputy minister-designate was allowed to be vetted there was the likelihood that some members of the committee might raise issues that could border on the matter before court.

Accra (Greater Accra) 19 Feb  

There are no new initiatives in this year's budget to address the crises in education, improve agriculture and health care delivery, provide employment and prepare the country adequately in terms of technology, for the next millennium, the Minority said in Parliament yesterday.

They said the government has the social and moral responsibility to ensure that brilliant children whose parents cannot afford the escalating cost of education have equal access to quality education.

Dr Kofi Konadu Apraku, the minority spokesman on Finance said this while presenting the minority's views on this year's budget statement and economic policy for 1999.

He said a recent study by the Ministry of Local Government and Rural Development revealed that in 14 districts in Ghana, more than 50 per cent of the primary schools do not have school buildings, thus classes are held under trees.

The member said the President in his Sessional address, stated that only 40 per cent of students, who qualified to enter the universities and other tertiary institutions actually do so.

Unfortunately, this year's budget did not have anything to address this imbalance adding '' the mind is a terrible thing to waste''.

Dr Apraku alleged that while the quality of education is declining the cost is going up, some NDC members have sent their children to schools abroad.

''When the quality health delivery service had fallen, they have sent their families, friends and cronies overseas for medical treatment.

Who cares for the ordinary Ghanaian?''

This brought Mr Moses Asaga to the floor on a point of order to ask the member if Otumfuo Opoku Ware, the second, the Asantehene is a crony of the NDC.

Dr Apraku replied that it was unfortunate for the Minister to use such an eminent personality as an example.

Mr Justice Daniel Francis Annan, Speaker upheld the point of order saying that the deputy minister was stating a matter of fact that it is not only NDC members like himself (Speaker) who benefit from this special health fund.

Dr Apraku continued by saying that people's access to quality health care has been impeded by rising cost of health delivery service adding that the President has been talking about National Health Insurance Scheme for sometime now yet nothing has come out of it. On unemployment, he said 230,000 people enter the labour market each year, the private sector's absorptive capacity is rather low so the government has to create opportunities for their employment.

''What are the prospects that a young man, who could not get a job last year can find one because of the provisions in this year's budget? What specific new policies incentives or initiatives does this budget provide to stimulate job creation in the private sector?''.

Dr Apraku said on a threshold of a technological age like the next millennium, if the budget did nothing at all, it should provide a mechanism for Ghana to monitor trends in technological developments across the globe and facilitate technology transfer.

''The budget should also provide incentives for domestic technology development and adaptation of modern technology to agricultural production and industrial processes... what then is in the budget to do this?''.

The member said the agricultural sector's performance is very important to the economy because of its impact on general price level and the basic welfare of people.

Any upward trend in the sector especially a sustainable one must be applauded by all.

However, it is doubtful if the country really achieved the 5.3 per cent growth stated in the budget in view of the drought and El Nino. ''This growth rate if accurate would be the highest recorded growth rate over the last 15 years and nearly doubles the nine-year average growth rate of 2.7 per cent for the sector from 1990 - 1998.''

He said the minority's preoccupation is not to dispute the figures but to learn what accounted for such miraculous performance so as to repeat it year after year.

It is in view of all these reasons and many more that the minority intends to bring an amendment to redress the problems outlined.

''The people of this country are looking up to this house to provide the relief that they so desperately need. We must all rise above partisan consideration and do what is right and fair with malice towards none and goodwill to all Ghanaians'' he said.