Quick thoughts on the 2016 Budget

By Jerome Kuseh

terkper budget
PHOTO: thebftonline.com

I haven’t blogged in a while. Sorry. I have missed significant happenings like the Eurobond issue. I hope to have a comprehensive review of the year in December to make up for it.

I have a few thoughts on the budget statement that was read today. You can download it here.

  1. Growth adjusted upwards to 4.1% from 3.5%. 4.1% is nothing to be happy about but I guess it’s better than 3.5%. The target of 5.4% for 2016 seems optimistic especially as more fiscal tightening is expected. My guess is the government expects this to come from end of power crisis and investments to end it.
  2. Industry 9.1% (great!); Services 4.7% (not bad); and Agric 0.04% (WTF!).
  3. Fiscal target of 7.3% is projected to be met. Not bad. 5.3% in 2016 is not an easy commitment to keep in an ELECTION YEAR and I do not think the government will meet that.
  4. Projects mentioned to end the power crisis sounded impressive but we’ve heard too much of that. Just fix the thing!
  5. US$53.05 per barrel for oil going forward sounds reasonably optimistic. I don’t think we will see higher than that.
  6. Not good that MDAs have been granting tax exemptions without parliamentary approval. Good thing to stop that.
  7. Cocoa production of 740,000 tonnes against target of 850,000 is poor considering that the Ivory Coast is back with a bang.
  8. Issuing domestic debt from GSE and not BoG. Good.
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Jerome Kuseh

Financial Analyst | Accountant | Private Investor
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