Government budgets for poverty reduction

Ghana has prioritised health, education, sanitation, infrastructure, local government administration and agriculture under its poverty reduction strategy for 2003, the Finance Minister Yaw Osafo-Maafo told Parliament on Thursday. Reading the 2003 budget speech, the minister said that funds to support the poverty reduction strategy would be provided under the Heavily Indebted Poor Countries Initiative (HIPC). Other areas of focus in the budget included the provision of ICT access to schools, micro finance programmes, upgrading secondary schools, road repairs and addressing gender inequalities. The budget seeks to strengthen Ghana’s tax base, targets GDP growth of 4.7 percent, a reduction in inflation from 15 to nine percent, agricultural growth of 4.5 percent, service sector growth of 4.9 percent and construction sector growth of 6.1 percent. It proposes subsidies to low-income users of electricity and water but raises tax on imported rice and poultry products. "In line with the medium-term objectives laid out in the poverty reduction strategy, the economic programme for 2003-5 is intended to improve the standard of living of all Ghanaians by raising real growth to at least 4.9 percent on average per year," Osafo-Maafo said. The minister, who raised taxes on various commodities, announced that the government had expanded the importation list of special drugs for common diseases such bas malaria, tuberculosis, guinea worm, leprosy, HIV/AIDS and other life-saving drugs. The government expects Ghana's total receipts for 2003 to increase to US $2.3 billion including $614 million from cacao exports, $185 million from timber exports and $110 million from development partners and donors. Opposition members of parliament criticized the budget saying the government had overspent, domestic and external debts were increasing, the currency depreciating and inflation rising.