- How did the government make its budget?
The federal Finance Ministry will either get the non-development side of the budget wrong, or the Public Sector Development programme is going to come unstuck, because one was planned on incorrect figures. The Finance Ministry predicts GDP growth of 2.4 per cent, and inflation of up to 13 per cent for the fiscal year about to begin on July 1. This is in contrast to the National Economic Council, which was told that that GDP growth was targeted at 4 per cent and inflation at 8.5 per cent. The Finance Ministry figures are supposed to be projections, while the NEC figures have been generated by the Planning Ministry, and are supposed to be targets.
However, there should not be such a wide gap between projections and targets. As things stand, neither Ministry believes the other. Before the figures are made public, either the Finance Ministry economists should convince their counterparts at the Planning Ministry that the tax collection figures in particular will grow in accordance with their figures, while the needs of the government will remain within the inflation figure they estimate, or else the Planning Ministry should convince the Finance Ministry that the plan it has prepared will generate the growth it has estimated. It is too much for either group of experts to expect their political masters to make an informed choice, or to tell them to go back and do their work all over again. While the Planning Minister is a law graduate, the PM’s Adviser on Finance is a specialist economist, and should not be satisfied with this kind of staff work.
Would be an exaggeration to assume that he could not do his job unless he had accurate figures? It is to be assumed that the figures are not being deliberately obfuscated, if not deliberately falsified. The agreement with the IMF, which is giving the country so much pain, cannot be expected to survive if the country’s own economic institutions fail to agree on basic benchmarks. Will a specific IMF have been achieved? It will not help for ministries to give differing answers. Once such a question was to be answered with a ‘yes’ or a ‘no. Now, it seems, it will depend on who is answering, and ‘maybe’ will have to be included as a possible response.
