Leader of government business in Parliament Osei Kyei-Mensah-Bonsu presents the 2021 budget statement today
Osei Kyei-Mensah-Bonsu, Minister for Parliamentary Affairs, will today 12 March present the 2021 Budget Statement and Economic Policy of the Akufo-Addo government in Parliament.
It will be the first time in the Fourth Republic that a person other than the finance minister will read the national budget.
Ken Ofori-Atta, finance minister-designate, is yet to be vetted due to ill-health and expected to return to Ghana 22 March from the United States where he had been receiving treatment for post-COVID-19 medical complications.
The 2021 budget, according to government sources, is expected to lay out the full details of the most ambitious economic recovery programme ever seen in Ghana, the GHS100 billion GhanaCARES (Obaatan Pa) programme.
The GhanaCARES policy is the stimulus package by the Akufo-Addo government to address the challenges created by the COVID-19 pandemic and drive, with greater impetus, the economic transformation agenda of the country.
However, with government revenues falling drastically by as much as GHS13.5 billion in 2020 and, with nearly as much, GHS11.8 billion, representing unexpected, unplanned additional expenditures to tackle the COVID-19 crisis, Asaase News can report that the 2021 budget will not be business as usual. Rather, government is expected to signal an entirely new policy shift on infrastructural development.
Simply put, the goal of the Akufo-Addo government is to end the era of unfinished projects. This is welcome news for many Ghanaians who complain of the culture of uncompleted infrastructural projects across the country. Hundreds of millions in resources are wasted, every four years, as new governments or even new ministers, proceed to undertake their own “priority” projects, abandoning inherited ones.
Checks by Asaase News show that nearly 9,000 of such uncompleted projects, with a price tag estimated around GHS30 billion, are scattered across the country, with some dating as far back as late Jerry John Rawlings administration.
This new policy direction will serve as a necessary departure prompted, however, by an urgent need to measure fiscal consolidation against the overarching policy of stimulating the economy.
As the president indicated in his State of the Nation Address (SONA) last Tuesday, Ghana’s overall economic growth rate for 2020 was revised downwards from 6.8% to 0.9%. Additional expenditures related to COVID-19 amounting to GHS25.3 billion, or 6.6% of GDP last year. This shot up the fiscal deficit for 2020 from a pre-Covid-19 target of 4.7% of GDP to 11.4% of GDP.
The message to contractors is that work on existing road projects will intensify, but with little appetite for new ones in 2021.
No major projects in 2021
In fact, no new major projects are expected in 2021, beyond the Agenda 111, which was planned in 2020 and financial arrangements made prior to this year. The Agenda 111 is the largest ever investment in healthcare infrastructure in our country’s history.
With Agenda 111 estimated to cost over US$2 billion in all, and with more COVID-19-related spending planned, including for the procurement of 20 million vaccines, slight increases are expected in the National Health Insurance Levy and the Value Added Tax (VAT).
Agenda 111 forms a critical part of a massive vision for Ghana’s healthcare sector to turn Ghana into a Centre of Medical Excellence and a destination for medical travel for Africa and beyond.
It involves providing seven first class regional hospitals to ensure each of the 16 regions have one. It includes building 101 district hospitals for the districts without any, and the building of two new psychiatric hospitals, plus the redevelopment of the Accra Psychiatric Hospital.
South Africa and India are currently leading in medical travels. Ghana is aiming to attract over US$2 billion in medical travels by 2030. West African region is estimated to have a population of 500 million people by 2030, by which time this vision would have been realised.