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Budget Statement

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Budget Statement Ao 53/ BUDGET STATEMENT for Hon. J. H. MENSAH, m.p. Minister ofFinance MINISTRY OF FINANCE 27th July, 1971 BUDGET STATEMENT FOR 1971/72 / * The Rt. Hon. Dr. K. A. Busia Prime Minister of Ghana CONTENTS Page Introduction iü Section I—Development Plans and Policies .. .. .. 1 The of Wealth Growth and Income .. 2 Development of Social Services and the Physical Infrastruc¬ ture 5 The Development Effort of Government 8 Agriculture, Forestry and Fishing 10 Industry based on Raw Materials from Ghanaian Agriculture 12 Capital and Enterprise in Agriculture 13 Other Industrial Sectors .. .. .. .. .. .. 14 Employment 15 Section II—Balance of Payments 19 External Debt 21 Import Policies 1971/72 22 Export Promotion . .. .. 23 Import Saving .. .. .. .. .... .. 25 Importation of Cars 26 Section III—The Budgets of 1970/71 and 1971/72 .. .. 27 The 1970/71 Budget 27 The 1971/72 Budget .. 28 Highlights of the Expenditure Programme for 1971/72 .. 32 (a) Education .. .. .. .. .. .. 33 (b) Health 34 (c) Transport .. .. .. .. .. 35 (cf) Food Production .. .. .. .. .. 37 (ie) Cocoa .. .. 38 (/) Water Supplies 39 Wages and Salaries 41 (а) Measures to reduce income disparities .. .. 41 (б) Raising the Real Income of Lower-paid Workers .. 42 Development Programme below-the-line .. .. .. 44 ï Contents—cortd. Page Section IV—Monetary Policy 48 Section V—Revenue Proposals ' '.. .. ' '., ' .. ... 50 : 55 Import Taxes .. ,' ... .. Taxes on Other Uses of Foreign Exchange ;■ 57 58 Vehicle Licences ... ■ • •• National 59 Development Levy .. .. .. .. J .. Conclusion .. .. .. .. 59 TABLES , 2 1. Expenditure on Gross National Product, 1960/70 .. 2. Cost of Living Indices—March, 1963 4 6 3. Output of Educational Institutions by Levels .. 4. Government Expenditure—Functional Classification 8 '5. Recorded Number of Employees and Placements through the Employment Agencies, 1960/70 17 6. Percentage Increase/Decrease of Recorded Employment by Industrial Sectors 18 19 7; Non-cocoa Domestic Exports .. .. .. .. .. 8. Imports by End-use Categories 1968/69-1970/71 20 ;9. Analysis of Long-term Aid Loans 1966/70 31 10. Feeder Roads Construction 36 Í1. Water Budget 1968/72—Pipe-borne Water Supplies 40 12. Government Finance 1969/70-1971/72 (existing rates) 51 13. Government Finance 1970/71-1971-72 53 14. Import Analysis—October, 1969 to March, 1971 56 APPENDICES 64 I. Road Projects .. .. .. .. .... 68 IT. Water Projects .. .. .. ii INTRODUCTION We can look back upon the year which has passed since I presented the last Budget with some satisfaction. The larger problems of the country, of the health of its economy and the quality of its life, to which I will presently be addressing myself in greater detail, have not indeed been solved. But we can be grateful that for the most part things have got better and continue to get better. Our most fundamentai need as human beings is the need for food. Last year's harvest had been cut short by drought wnich set in at the turn of the year. This year's crops as they have begun to come in seem to be turning out very satisfactorily. If the elements continue to be favourable to us, and if the measures that we as a people and a government are taking to secure more ample food supplies are successful, then we can look forward to a period of stable and easy conditions in this most fundamental aspect of life against the background of which progress in other aspects can be pursued. Last year we carried out a programme of trade liberalisation. Our people were able to take advantage of this to buy most of the things which they need and want but of which they had perforce been denied for so long. The Christmas which we spent last December with goods once more in abundant supply in the shops, in the markets and on the side¬ walks, was a period of material satisfaction such as Ghanaians had not seen for many years. Unfortunately, in our present economic circum¬ stances, such periods of feasting and plenty have to remain limited to a few days each year. For the rest of each year we have to live with the daunting task of nation building to which we have set our hands and with the hardships that go with it. The welfare of the ordinary Ghanaian has recently begun to be threatened once more by shortages of food leading to high prices. The information available suggests that our army of unemployed remains inhumanly large. Our external trade has once more come under" pressure and has to be protected by extraordinary measures which will inevitably hurt. The budget proposals which I am presenting to you have to deal principally with these emerging or chronic problems—of inadequate and insecure food supplies, of unemployment and of a threatening dislocation in the balance of payments. But the background against which we have to tackle these problems does not warrant an attitude of despair. On the contrary, the continued atmosphere of freedom and reasonable social harmony which we have been able to maintain forms our most important asset in facing the future. Our freedom to believe what we want, to associate with whom we want, to pursue our private economic interests within the framework of the law; our freedom from arbitrary rule and therefore our freedom from fear—these are the most important attributes that a society must have if the energies of the people, their ingenuity and their enterprise in iii the pursuit of the well-being of their own families, the sum total of Which constitutes the well-beingof the nation, are to come to their full flowering. These freedoms we have. Because of.them we can believe in our destiny. At some stages during the past year the country was threatened by an"unacceptable degree of social upheaval and tension. The atmosphere of industrial peace, which is so necessary if we are to concentrate our energies and to mobilize our own and other people's capital to solve our problems, was threatened too frequently. It is heartening that the leader¬ ship of the Trade Unions Movement has adopted an attitude of high social responsibility and is helping to ensure that the many problems and conflicts in industrial relations which must inevitably arise from time to time will be resolved in a rational manner and a calm atmosphere. I will comment on some specific problems of wages and salaries in the course of my address. At this stage I will only say that when workers and their employers sit down to resolve their problems, they should always remember that the third party to their discussions, an unseen but a very important third' party, is the community as a whole. Above all, it is the army of unemployed. Nothing must be done to impair the capacity of this country, small as it is, to give jobs to more and more of these unemployed Ghanaians. For the Government itself 1970/71 has been a successful year Revenues have been buoyant. National development, which is the sole reason for the levying of taxes on the people, is being carried out at a rising tempo. The Government has continued to devise bold and imagina¬ tive departures in public policy for the acceleration of national progress. And we have continued to enjoy the loyal support of our public servants in-carrying out our policies. Nation building is not a matter solely, or even predominantly, for Governments. It is a co-operative effort both in the actual construction of a hew nation and in the harnessing of the resources of human energy, money and physical assets. The Government has to offer leadership by showing the most profitable path forward, and bringing out in each of us the maximum willingness to work hard and to sacrifice for ourselves and for our community. Thé year ahead is going to be a difficult year— through no fault of our own. Government has to ask the people for sacrifices. I hope that our response will be worthy of a nation which has faith in its destiny. Hon. J. H. MENSAH Minister of Finance Section I DEVELOPMENT PLANS AND POLICIES 1. Since last year work has proceeded on the preparation of à comprehensive National Development Plan which will guide our actions within a consistent and logical framework during the life of the present Government. The leading ideas that have informed our thinking and will continue to dominate the policies and planning of the Progress Party Government are well known to you. They derive from the under¬ takings which we gave to the people of Ghana in seeking their mandate two years ago to serve as their Government. ' 2. These commitments have been further elaborated in^the light of more detailed facts and figures which have been presented to us since coming into office. Both our first budget, which we presented last August, and the present budget are based upon the policy conclusions which we have reached in the light of this information concerning the methods, the resources and the timing of our actions for the attainment of our stated objectives. Since last year we have been engaged in con¬ sultations, within and outside the Government, which are necessary for the elaboration of a National Development Plan that will command wide national support and will thereiore stand the best chance of successful implementation. In particular, Regional Planning Committees have been established one after the other while consultations have been going on at the national level on those problems that are peculiar to various sectors of the economy as well as on questions of more general concern. It is hoped this process will be completed in the present financial year, when a fully developed plan will be submitted for the approval of Parliament.
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