Ghana's government says it is cutting into half spending on
what it describes as luxuries after the economy faced serious challenges over
escalating oil and food prices. The government says it is doing all it can to
manage the economy after President John Kufuor recently said the
country's oil import bill had leapt from $500 million in 2005 to $2.1 billion
at the end of last year. The government, however, adds that its investment in
infrastructure, such as road construction, would not be hit by the cuts. But
some political analysts say the government's difficulty in managing the economy
could potentially undermine this year's general elections, with budget cuts to
the electoral commission.
Kwaku Kwarteng is the government's spokesman on
finance. From the capital, Accra he tells reporter Peter Clottey that the
budgetary allocation for the elections would not be tampered with.
action is necessary, but I have to point out first and foremost that they are
not luxuries per se. What they are, are what we call non-development capital
expenditure. That is to say investments into capital that is not related to the
development programs of government would have to be suspended for now. And here
you are talking about, take for instance, the air conditioners in offices,
carpets that are old and need to be replaced, and other such items that capital
expenditures, but not directly related to development programs," Kwarteng
He denied the government
budget has been thrown off balance, but adds that there were challenges due to
increases in oil and food prices on the international market.
"Well it depends on what you
call throwing something off course. We recognize that the management of the
economy is not a child's enterprise, and that these things are bound to happen
in one way or the other, and it is the responsibility of government, into whose
hands the economy has been entrusted, to find solutions to them. But of course
a certain shock has come from the external environment that was not factored
into the budget at the time of the preparation," he said.
Kwarteng said the government
is doing everything possible to assuage the impact of the external shock the
budget is undergoing.
"We didn't anticipate the
crude oil prices would go this high and so as a result we have to manage the
economy to respond to this external shock. I don't say the budget has been
thrown out of gear because so long as we are able to manage this difficulty,
that directs investments in such a way that the improvements of people's lives
are not affected. I will consider it would not be a crisis situation as
throwing of a budget off gear would suggest," Kwarteng noted.
He said the government would
ensure that the budgetary allocation for the electoral commission would not be
tampered with to ensure a free and fair election.
"The fact is in an election year we all recognize how important the election is
in our democratic culture. And we are not in a position to say with
difficulties coming from external environment, we do not have the money for the
elections. It could throw this country into a lot of social difficulties, and
the cost of which would far outweigh the money we are trying to save. So, areas
such as in the elections, security in an election year, and all the areas we
call good governance areas -- these are areas we would definitely not disturb.
And that is why we are saying we are going to look at areas which are not of
critical urgency around this time so that we would be able to protect
investments into areas of critical urgency such as our electoral process," he