GH¢16billion will be used for wages and salaries alone in 2017, Finance Minister Ken Ofori-Atta has told parliament as he read the Akufo-Addo government’s first budget.

He said GH¢5.5billion will be used for goods and services.

Mr Ofori-Atta told the house that as far as the 2016 fiscal year was concerned, “we have inherited an economy with debt overhang, lax fiscal policies, revenue underpeformance” with a debt stock of 73% of GDP as of December 2016 while interest payments took about 42% of tax revenue.

Arrears are about GH¢7billion, he said while the deficit is 10.3% on a commitment basis. Growth is 3.6%, the lowest in over two decades.

“Our goal is to build the most business-friendly economy in Africa”, the Minister said, acknowledging that “corruption and high debt service payments,” have been a challenge.

“We will broaden the tax base while reducing and abolishing some taxes. We will ensure fiscal discipline, transparency and accountability. Government will ensure debt sustainability. We will work to reduce the amount of government borrowing,” he assured the house.

He said interest payments of GH¢10.8billion was about five times the allocations to six ministries.

“We will shift the focus of economic management from taxation to production,” he said, adding “each constituency will be allocated $1m to combat poverty.”

He said the 1-District, 1-Factory programme of the Akufo-Addo government “will ensure industrialisation.”

He said the Zongo Development Fund Free SHS programmes will also be rolled out while nurses and teachers under training will have their allowances restored.

He said the government will continue with the $918million IMF programme, adding that “there is every reason to be optimistic. Ghanaians are ready and they have a government that is ready.”

“We cannot borrow our way out of these challenges. We must be in a hurry to grow our way into prosperity.”

On the global front, MR Ofori-Atta said growth will improve in 2017. He said 3.4% growth is projected by the IMF compared with 3.1% in 2016.

According to the Minister, oil prices have picked up and are expected to average $55, 28% higher than in 2016. “Growth is estimated at 3.6% in 2016. Services continues to dominate. Inflation slowed down to 15.4%. Mining sub-sector was hampered by disruption in oil production. Ghana Stock Exchange lost 15.3% due to preference for money market instruments.”

He said yields on short-term government instruments decreased while those on long-term instruments increased.

The cedi, he said, remained largely stable in 2016 until the elections. “The balance of payments was surplus for the first time since 2016 while $277m in reserves will cover three months of import cover.”

“Fiscal consolidation was not achieved in 2016. Slippages resulted in a deficit of 10.3% on commitment basis, 8.7% on cash basis. Revenue shortfall was due to energy challenges, oil production disruption and weak tax compliance. Petroleum receipts from liftings was $207.79m while debt stock is GH¢122.3 billion.”