2021 Budget to end era of uncompleted projects

Osei Kyei-Mensah-Bonsu, the Minister of Parliamentary Affairs, will present the 2021 Budget Statement and Economic Policy of the Akufo-Addo government in Parliament today, Friday 12 March.

It will be the first time in the Fourth Republic that a person other than the finance minister will read the national budget.

The Finance Minister-designate, Ken Ofori-Atta, is yet to be vetted because of ill-health. He is expected to return to Ghana from the United States, where he has been receiving treatment for post-COVID-19 medical complications, on 22 March.

The 2021 Budget, according to government sources, will lay out the full details of the most ambitious economic recovery plan ever seen in Ghana, the GHC100 billion GhanaCARES (Obaatan Pa) Programme.

GhanaCARES is the stimulus package proposed by the Akufo-Addo government to address challenges created by the COVID-19 pandemic and drive the economic transformation agenda of the country with greater impetus.

Policy shift

However, with government revenues falling by as much as GHC13.5 billion in 2020, and with nearly as much as GHC11.8 billion allocated to 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, the government is expected to signal a whole new policy shift on infrastructural development.

Simply put, the goal of the Akufo-Addo government is to end the era of unfinished projects. This will be welcome news for many Ghanaians who complain of the culture of uncompleted infrastructural projects.

Hundreds of millions of cedis are wasted every four years as new governments, or even new ministers, proceed to undertake their own “priority” projects, abandoning inherited ventures.

Checks by Asaase News show that nearly 9,000 such uncompleted projects, with an estimated combined price tag of GHC30 billion, are scattered across the country. Some projects date as far back as the government of the late Jerry John Rawlings.

The new policy direction will serve as a necessary corrective, albeit prompted by an urgent need to measure fiscal consolidation against the overarching policy of stimulating the economy.

Additional spending

As the president announced in his State of the Nation Address (SONA) on Tuesday, Ghana’s overall economic growth rate for 2020 has been revised downwards from 6.8% to 0.9%.

Additional expenditures relating to COVID-19 amounted to GHC25.3 billion, or 6.6% of gross domestic product last year.

This made the fiscal deficit for 2020 soar 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 there will be little appetite for new ventures in 2021.

Massive investment in health care

In fact, no new major projects are expected in 2021, beyond Agenda 111, which was planned in 2020, and financial arrangements made prior to this year.

Agenda 111 is the largest ever investment in health-care infrastructure in Ghana’s history.

With the health infrastructure programme estimated to cost over US$2 billion in all, and with more COVID-19-related spending planned, including the cost of procuring 20 million vaccines, slight increases in the National Health Insurance Levy and value added tax are expected.

Agenda 111 is a critical part of a grand vision for the health-care sector to turn Ghana into a centre of medical excellence and a medical travel destination for people in Africa and beyond.

It will provide seven new first-class regional hospitals to ensure that each of the 16 regions has one. It will also involve building 101 district hospitals to cover those parts of Ghana without one, as well as the building of two new psychiatric hospitals and redevelopment of the Accra Psychiatric Hospital.

South Africa and India are the two countries leading the world trend towards medical travel. Ghana is aiming to attract over US$2 billion in medical tourism by 2030.

It is estimated that the West Africa region will have a population of 500 million by 2030, by which time this vision will have been realised.

Wilberforce Asare

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