By Justice Lee Adoboe
ACCRA, Jan. 1 (Xinhua) -- A senior researcher in Ghana called on the West African country to exercise fiscal discipline in 2013.
Johnson Asiama, Director of the Macro-economic Department of the West Africa Institute for Financial and Economic Management, said the Ghanaian government must review its fiscal management of the economy in 2013 by focusing on reforms in budget implementation, both on the expenditure and income sides.
In an exclusive interview with Xinhua recently, Asiama identified the last stages of the implementation of the Single Spine Salary Structure (SSSS) for public and civil servants and attendant demand for 15 percent pay rise across board, and accumulated arrears from the election year spending, as the two potential sources of additional pressure on the public purse in 2013.
"Some of these demands cannot be met without bringing undue pressure on the public purse," said Asiama, who is a former Director at the Research Department of the Bank of Ghana. He called for a reprioritization of such arrears and review of its spending in the midst of prevailing constraints.
On the income side, the economist also said that there is a need for cost-saving measures and strengthened revenue mobilization efforts, saying although the Ghana Revenue Authority (GRA) had been making great efforts in that direction, these should come along with enforced compliance.
Indeed, maintaining a low budget deficit, especially in an election year, had been a major concern of the National Democratic Congress (NDC) government, as late President John Evans Atta Mills had ordered a strong memo to be sent to all ministries, departments and agencies earlier in 2012. He said the government would not tolerate any "unbudgeted expenditure and overspending this year."
This was apparently in response to calls to prevent the recurrence of the election year syndrome of fiscal slippage with its resultant post-election effects.
Major concerns include the fear that, after a successful pursuit of re-election, budget deficit could sky-rocket again through excessive spending by government.
The government tamed the country's budget deficit, bringing it down from a high of over 14 percent to the current 7.0 percent through a series of austerity measures introduced at the start of its tenure in January 2009.
For the first three quarters of 2012, the government's budget execution resulted in an overall budget deficit of 5.1 billion Ghana cedis (2.68 billion U.S. dollars) or 7.3 percent of Gross Domestic Product (GDP), against a target of 4.3 billion cedis (2. 26 billion U.S. dollars) or 6.2 percent of GDP.
During the corresponding period in 2011, official records put overall budget deficit at the equivalence of 1.9 percent of GDP.
The excess, according to Acting Governor of the Bank of Ghana Henry Kofi Wampah, was mainly accounted for by the implementation of the SSSS and arrears clearance which amounted to 1.1 percent of GDP.
Professor Kwabena Asomanin Anamang of the University of Ghana, Legon, believed that calls on government to control spending next year were in the right direction.
"They have to control government spending because the deficit for this year has been high," he urged, adding that fiscal discipline was a central issue that could not be compromised.
Ghana's accelerated economic growth, he said, was likely to continue in 2013 due to the prevailing strong macro-economic conditions in the country.
Additionally, he said, there were positive indications of high post-election dividends in terms of capital inflow into the economy to sustain growth.
"Once the economy grows, tax revenue would also go up; but how to contain the pressures of last year are critical," he stressed.