Ghana's government says it is cutting into half spending onwhat it describes as luxuries after the economy faced serious challenges overescalating oil and food prices. The government says it is doing all it can tomanage the economy after President John Kufuor recently said thecountry's oil import bill had leapt from $500 million in 2005 to $2.1 billionat the end of last year. The government, however, adds that its investment ininfrastructure, such as road construction, would not be hit by the cuts. Butsome political analysts say the government's difficulty in managing the economycould potentially undermine this year's general elections, with budget cuts tothe electoral commission.
Kwaku Kwarteng is the government's spokesman onfinance. From the capital, Accra he tells reporter Peter Clottey that thebudgetary allocation for the elections would not be tampered with.
"Thataction is necessary, but I have to point out first and foremost that they arenot luxuries per se. What they are, are what we call non-development capitalexpenditure. That is to say investments into capital that is not related to thedevelopment programs of government would have to be suspended for now. And hereyou are talking about, take for instance, the air conditioners in offices,carpets that are old and need to be replaced, and other such items that capitalexpenditures, but not directly related to development programs," Kwartengpointed out.
He denied the governmentbudget has been thrown off balance, but adds that there were challenges due toincreases in oil and food prices on the international market.
"Well it depends on what youcall throwing something off course. We recognize that the management of theeconomy is not a child's enterprise, and that these things are bound to happenin one way or the other, and it is the responsibility of government, into whosehands the economy has been entrusted, to find solutions to them. But of coursea certain shock has come from the external environment that was not factoredinto the budget at the time of the preparation," he said.
Kwarteng said the governmentis doing everything possible to assuage the impact of the external shock thebudget is undergoing.
"We didn't anticipate thecrude oil prices would go this high and so as a result we have to manage theeconomy to respond to this external shock. I don't say the budget has beenthrown out of gear because so long as we are able to manage this difficulty,that directs investments in such a way that the improvements of people's livesare not affected. I will consider it would not be a crisis situation asthrowing of a budget off gear would suggest," Kwarteng noted.
He said the government wouldensure that the budgetary allocation for the electoral commission would not betampered with to ensure a free and fair election.
"The fact is in an election year we all recognize how important the election isin our democratic culture. And we are not in a position to say withdifficulties coming from external environment, we do not have the money for theelections. It could throw this country into a lot of social difficulties, andthe cost of which would far outweigh the money we are trying to save. So, areassuch as in the elections, security in an election year, and all the areas wecall good governance areas -- these are areas we would definitely not disturb.And that is why we are saying we are going to look at areas which are not ofcritical urgency around this time so that we would be able to protectinvestments into areas of critical urgency such as our electoral process," hesaid.