The Ranking Member on Parliament’s Foreign Affairs Committee, Cassiel Ato Forson, has revealed that the 2022 budget will be regarded as one that lost the confidence of Ghana’s international investors.
According to him, prior to the reading of the 2022 budget, there was evidence of waning investor confidence in the country considering Ghana’s unsustainable debt levels and fiscal policies. He indicated that the 2022 budget was intended to be the solution the country needed to convince investors to retain their trust and money in the country while the economy recovered.
Mr Forson expressed that following the reading of the budget, investors were convinced it was too risky to continue investing in the country.
“So, I if you ask me, the 2022 budget will go down as the budget that lost the confidence of Ghanaian investors. It is the budget that has done us in, and it will stand to be the worst budget in the history of this Republic. That is a fact, because the evidence is there to show, the budget was prepared with only one major fiscal assumption e-levy; that it will bring in excess of 1% of GDP, in fact about 1.5% of GDP in terms of quantum of tax revenue.”
Cassiel Ato Forson
2022 budget reading in parliament
Describing the situation as unfortunate, Mr Forson highlighted that, the day that the 2022 budget was read, “investors got even angrier because they saw an unrealistic budget assumption” and questioned whether government reckoned them as “kids”. Justifying his position, he indicated that the yields with the country’s bonds before and after the budget was read became very huge and was evident for all to see.
“It’s not because of the e-levy. In fact, it was far before the budget was rejected and the e-levy was subsequently rejected. This was on the day the budget was read. Investors reacted and said that we’re not seeing what we have to see. In fact, Ghana’s yields on the day that the budget was read got worse than the day that the e-levy was rejected. And this one, it is for everyone to see, you can go to Bloomberg terminal and plug it, the graph is there for everybody to see it.”
Cassiel Ato Forson
It will be recalled that following the reading of the budget statement, there was a stalemate in parliament as the Minority in Parliament voted to reject it. Nonetheless, there were calls for the two sides to speedily dialogue and resolve their differences regarding the 2022 Budget Statement and pass it in the interest of the people.
This, was to prevent a lull in governance, stimulate recovery of the economy from the ravaging impact of the Covid-19 pandemic and lessen the rising cost of living.
Speaking on the issue then, Director of the Institute of Statistical, Social and Economic Research (ISSER), Professor Peter Quartey, emphasised that, “the Majority should dialogue with the Minority and arrive at a consensus and it will be a win-win for Ghana”. He explained that the longer government delayed in implementing the budget, the problems will increase for the country.
“… Investor confidence will wane, and it will have repercussions on our exchange rate, cost of doing business, income, and livelihood.”
Professor Peter Quartey
He emphasized that failure to immediately resolve the issues raised by the Minority Caucus and the public, at large, would plunge the country into economic crisis and dampen investor confidence.
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