It is an undisputable fact that in every election year, government’s budget and financial commitments and transactions exceed the projected and allocated limits, resulting in economic difficulties in the ensuing years.
Some financial and economic analysts are attributing the current economic challenges the nation is facing to the government’s excess spending during the 2012 general elections.
As we move towards another election year, therefore, the issue of fiscal consolidation becomes crucial to ensure economic stability and the survival of both individuals and corporate entities.
It is no wonder, the International Monetary Fund (IMF), has also called on the government to identify the full cost of the 2016 election ahead of time, and make provisions for it in the budget.
The IMF stated that for the country to avoid the risk of fiscal overruns in connection with next year’s election, it is imperative to establish the full cost of the elections as early as possible and make the necessary provision for it in the 2016 budget.
According to the IMF, while it is important that the country achieves its fiscal targets, it is equally important that ongoing wage negotiations result in wage agreements consistent with the medium-term wage bill envelope, and further enhance revenue performance, as a further assurance of continued fiscal consolidation.
The concerns of the IMF show that crucial fiscal consolidation is necessary if Ghana is to make a significant headway in its quest to restore full macro-economic stability.
The Times is pleased with early indications by the managers of the economy that they would not overspend in 2016, in order to maintain and sustain the gains and, for that matter, equilibrium achieved so far.
It is relieving that both President John Dramani Mahama and his Finance Minister, Mr. Seth Terkper, have confirmed their commitment to controlling expenditure, in order not to ruffle the successes chalked so far.
At a recent press briefing, the Minister of Finance reiterated the steps the Ministry was taking to control spending to ensure that the global continuous fall in crude oil prices does not derail the achievement of our fiscal deficit target for the year, as well as our medium-term fiscal consolidation objectives.
In this regard, he asked MDAs which are funded from the Annual Budget Funding Amount (ABFA), to control their expenditure within the budget allotments prescribed by the Ministry of Finance.
Speaking to party faithfuls after submitting his nomination form to contest the flagbearership of the ruling National Democratic Congress for a second term in office, the President also stressed that his government would ensure fiscal discipline now and in the election year 2016.
These assurances are refreshing, coming from the President and the Exchequer, and Ghanaians would hold them to their words. They should not be mere rhetorics; they should not be mere statements of convenience!
The Times is consequently urging both the President and the Finance Minister to walk the talk in order not to derail the gains made, despite the global economic challenges confronting most countries, Ghana no exception.