SPEECH: ELECTION YEAR BUDGET DEFICIT: IMPLICATIONS FOR MACRO-ECONOMIC STABILITY

This is a welcome address I delivered at the 1st November 2016 Graphic Business/Stanbic Bank Breakfast Meeting.

Mr Chairman, distinguished speakers, Managing Director of Stanbic Bank, Board, Management & Staff of GCGL, Stanbic Bank and Busy 4G, our partners from CitiFm & other media house ladies and gentlemen,

I have been given a simple task this morning: I am to welcome you our distinguished guests to this breakfast meeting.

However, as tradition goes, a welcome to a dear guest naturally generates a conversation, so permit me to take liberties to say one or two things about we are here to discuss, Election year budget deficit: implications for macro-economic stability.

 Economy slips badly on budget deficit in election years

Mr Chairman, since 1992 when we returned to constitutional rule, election years, except 2004, have seen the economy slipping badly on budget deficit. In fact, the very first election in the Fourth Republic, the 1992 elections, saw the economy switching from a surplus of 1.9 per cent of GDP in 1991to a deficit of 4.9 per cent of GDP after the elections.

Then in 2008, another election year, with a target of four per cent of GDP for budget deficit, we ended up with 11.5 per cent and 2012 was not different as we again ended the election year with 11.8 percent instead of a budgeted deficit of 6.7 per cent of GDP, according to the Bank of Ghana annual reports.

It doesn’t matter the party in power

Ladies and gentlemen, I wish to remind you that 2008 was an NPP era while 2012 was an NDC era. What is clear here is that it does not matter whether it is the NPP or NDC in power, the story of election year budget deficit appears to follow the same pattern.

I make this point to draw attention to the need to look at this phenomenon from a national rather than any parochial, politically partisan perspectives that often see us trying hard to blame a political opponents instead of focusing on finding a solution to a national challenge.

This is also important because as organisers, we do not intend this meeting to be an extension of this year’s political campaign, so that we can propose solutions which any political party in power can use for the benefit of the nation.

Why is budget deficit high in election years?

The question that comes to mind naturally then is why is the economy locked in this cycle of bad budget deficit in election years? Distinguished guests, as I ponder over the question, I come to the conclusion that two factors are at play;

The desire of a ruling government to retain power

And the determination of an unsympathetic electorate to blackmail a vulnerable government.

If you look at it there could also be a 3rd factor – The desire of the oppositions parties win power with all kinds of promises

As we do know, election years are the best times when communities and labour associations normally agitate for what they believe they have been unfairly denied. Labour demands salary increase and better conditions of service while communities demand social amenities with veiled and unveiled threat of voting the government out if their demands are not met.

To retain power, the government yields to the pressure and overspends beyond what it budgeted for. All of us Ghanaians, the electorate and politicians are, therefore, responsible for creating election year budget deficits and should feel responsible to help find a solution to it.

As is said Leadership is cause and everything else is effect. So all of us the leaders in Ghana need to step up and come up with solutions. We have leaders in both categories, the politicians and the electorate. We need to come up with a Ghanaian solution to this canker that has bedeviled us for some time now.

This is why I am happy that our business newspaper, the Graphic Business, has collaborated with Stanbic Bank and Busy 4G to offer this platform to examine the problem and propose solutions to it.

As a newspaper, the Graphic Business is always looking for the best ways to help the business community to have relevant information for their day-to-day as well as strategic business decisions.

Also, it seeks to create avenues for business to make input into national discourse that eventually shape public policy on business. In this endeavour, the Graphic Business and all our brands, are not just newspapers but platforms that have various facets on offer, not only the pages, but also platforms such as this.

I know that over the years, business has come to appreciate the worth of this meeting and will make the most of it.

We have selected speakers who, I am confident, will ably help us to understand the perspectives of the topic to engender a spirited discussion.

Your Graphic Business now comes out on Thursdays as well, with the Daily Graphic. Don’t miss to pick copies on Tuesday and Thursday. As I mentioned the last time we met to discuss the new Income Tax law, your Graphic brands are on the digital platform, you can get copies of all brands digitally from the android play store.

I wish to ask you to join me to thank God as I mark the 2nd year of the 2nd and final tenure as chief servant of GCGL. Today is the begining of the 6th year, thanks to the NMC and HE the President for offering me the opportunity to serve Graphic for 2 terms. As a company, we are grateful of the visionary direction of the Board, innovation and hard work of Management and staff, Team Graphic, that has resulted in even better performance this year than we did in 2015.

As at the end of the 3rd quarter not only have our revenue grown but also we have had volume growth of hard copy newspaper sales even as we started the sale of digital copies. We guarantee you our customers and clients increased circulation and a lot more eyeballs to market and sell your brands. We continue to be the most influential media organization in Ghana pushing hard to attain our vision to be a dominant multimedia organization telling the African story.

Thank you all for your support and your continue presence at the Graphic Business/Stanbic Bank Breakfast Series events are an endorsement in your belief in us and we do not take it for granted at all. Thanks for your custom.

On this note, I welcome you to yet another edition of the Graphic Business/Stanbic Bank Breakfast Meeting and wish all of us a fruitful discussion.

Author:  KENNETH.ASHIGBEY || Managing Director, Graphic Corporation