GHS16billion 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 GHS5.5billion would 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 underperformance” with a debt stock of 73% of GDP as of December 2016 while interest payments took about 42% of tax revenue.

Arrears are about GHS7billion, 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”, had 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 GHS10.8billion 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 and Free SHS programmes would also be rolled out while nurses and teachers under training would have their allowances restored.

He said the government would continue with the $918million IMF programme, adding: “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 would improve in 2017. He said 3.4% growth was 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 continue 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,” Mr Ofori-Atta added.

“Fiscal consolidation was not achieved in 2016. Slippages resulted in a deficit of 10.3 per cent on commitment basis, 8.7 per cent 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 GHS122.3 billion.”