President Mills Budget for 2009
The budget is projected at GH¢9.8 billion, which is structured into the three thematic areas of the Growth and Poverty Reduction Strategy (GPRS II): Private Sector Competitiveness, Human Resource Development and Good Governance. GH¢3.013 billion (30.8%) is set aside for mandatory statutory payments, which include External Debt Service, Domestic Interest Payment, Transfers to District Assemblies Common Fund, Ghana Education Trust Funds (GETFUND), Social Security and National Insurance Trust, National Health Insurance Levy (NHIL), Road Fund, Pensions and Gratuities. The remaining GH¢6.780 billion (68.9%) constitute discretionary payments (see 2009 budget, pp. 49-50).
The broad macro-economic objectives of the 2009 budget include:
5.9 per cent GDP growth rate (5.7% for agriculture, 5.9% for industry, and 6.6% for services)
15.3 average inflation and 12.5 end period inflation;
an overall budget deficit of 9.4 per cent of GDP;
more than two months gross international reserves to cover import of goods and services.
The Ministry of Food and Agriculture (MoFA) is allocated GH¢202.6 million, representing about 2 percent of total estimated expenditure. In comparison, Ministry of Education merited about 17 percent of total expenditures and Health garnered about 9 percent.
The allocation for MoFA may seem inadequate in the context of CAADP commitment of 10 per cent budgetary allocation to the agricultural sector (See Appendix I attached on sectoral allocations). However, the percentage could be higher if one broadens the definition of agriculture to any relevant spending on crops and livestock, fisheries, forestry, natural resource management, agricultural research, agricultural extension services and training, agricultural marketing, agricultural inputs, irrigation, and rural infrastructure (see AU/NEPAD 2005). While FASDEP II offers MoFA a lead responsibility to coordinate agricultural related activities in ministries, departments and agencies, it is evident that some activities earmarked for Ministries of Land and Natural Resources; Trade and Industry; Energy, Transport, Roads and Highways; and Environment Science and Technology will impact on the agricultural sector. Appendix II (attached) provides a listing of the stated commitments within these sectoral areas across the government infrastructure.
On funding sources, while about 68 percent of the allocation for MoFA is donor driven, only 4 and 9 percents of allocations for Education and Health respectively are from donor funds. It is about time domestic financing of agriculture is sought for as has been done for the education and heath sectors through a 2.5 per cent levy of VAT each for Ghana Education Trust Fund (GETFUND) and National Health Insurance Levy (NHIL).
There may be donor injections as the World Bank has promised to front-load $300 million to support the 2009 budget while the Japanese government is donating $3.5 million. However, in the wake of the global economic crisis, it is possible donor injections might not flow as expected.
In other news…
Vetting of deputy ministerial nominees is ongoing amidst mixed reactions on the performances of some nominees. The President has dropped a nominee for Ministry of Communication. He has also appointed 11 people to the Council of State.
In Parliament, sub-committees are being constituted. And as Electoral Commission fixes March 17 and 18 as filing dates and April 7 for the by-election, the scramble for the Jirapa MP seat has heated up, especially in the ruling party.
-- Kipo Jimah, Research Officer, IFPRI