The dust has hardly settled on the 7 December election and already a much hackneyed phrase used whenever there has been a shift of political power has started to appear in our political discourse – “empty coffers”.
Governments taking over from another either through a coup d’etat or peaceful transition will always claim they met empty coffers.
But really for the sake of the records, the only Government that met money in the coffers was the Nkrumah administration when it took over from the British.
Since then Ghana has been running an economy based on deficit financing. What this really means is that no Government since Nkrumah has come to meet money in the “coffers”. The coffers at any moment has money trickling in from taxes, duties, levies etc. The truth is that by years end, all the revenues collected do not meet our expenditure. We therefore have to borrow to finance the shortfall also referred to as the deficit.
When the NPP handed over to the Atta Mills administration, the budget deficit as a percentage of GDP stood at about 14%. This simply means that our expenditure exceeded all revenues collected in the national kitty during the year by 14% of our GDP.
All Governments have to raise revenue to finance their budgeted expenditure using various taxes, export revenues etc. Any shortfall which is described as the deficit is financed through borrowing either on the domestic market or international credit market, euro bond etc.
The Mahama administration is likely to leave office with a deficit of 7% of GDP. Much better than the 12% inherited from the Atta Mills administration and definitely much better than the 14% inherited from the Kufuor administration.
Politicians have made us promises that they are unable or unwilling to keep. The theory of empty coffers and debt is therefore going to be very topical in the next few months.
Our answer – the coffers have never been full. You knew full well you were not going to meet any money sitting in the kitty when you made us all those promises. No excuses please. Give us our factories, our dams, and all the fantastic promises that attracted our votes.
Just get to work ASAP.
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