Economists have cautioned the government to use the 2014 Budget Statement and Economic Policy to tackle the overrun budget deficit that has wobbled the economy and propose far reaching policies that will stabilise the economy.

Government should, therefore, critically look at the wage bill for next year, the management of subsidies  and interest payments on government debts and instruments.

Executive Director of the Center for Policy Analysis (CEPA), Dr Joseph Abbey, speaking on the expectations of the 2014 Budget Statement in an interview said the fiscal deficit at the end of this year would greatly feed into the development agenda for next year.

Dr Abbey, a statistician and an economist has doubts if the fiscal deficit of nine per cent would be achieved by the end of the year.

He said that if this does not happened the market would react sharply and this would have serious effect on the economy as borrowing cost would begin to rise sharply.

At the end of 2012 government recorded a deficit of nearly 12 per cent with a target of reducing the deficit to nine per cent and to six per cent over the medium-term.

This according to government would be achieved through fiscal consolidation which would focus on improved financial management including debt management and improved revenue collection.

The country’s large fiscal deficit in 2012 was the subject of criticism by the international investor community when country went on an international roadshow to raise one billion dollar euro bond for various development projects.

This year’s budget statement must therefore address the various challenges facing the economy.

But the deputy Managing Director of the International Monetary Fund (IMF) Naoyuki Shinohara stated in an earlier interview that managing a huge budget deficit cannot be done within a year period.

Under the medium-term, government hopes to complete wage negotiations before the annual budget is presented to Parliament while it will also adjust prices of petroleum products to full cost recovery.

To meet its infrastructure needs, government intends under the medium-term seek partnership with the private sector for infrastructure developments via Public-Private Partnership.

It is also the intention of government to focus on self-financing projects to improve on the operations of State Owned Enterprises to borrow on their balance sheets without  government guarantees.

Government plans to also improve its revenue collection and mobilisation through the introduction of various reforms. Tax revenue which stood around 12.4 per cent of GDP at the end of 2006, increased to 16.3 per cent  of GDP  in 2012 with a projection of improve revenue  through the elimination  of unwarranted  import tax exemptions.

But to Dr Abbey the issue of the wages should be the central thing government should be able to handle in this year’s budget statement and cited a few institutions which still have ‘ghost names’ on their payroll.

The 2014 budget statement is likely to focus on programmes that would enhance the country's economic growth, while strengthening economic gains.  Another initiative that government wants to implement is fusing spending plans of various ministries and agencies into results and achievable target.

This means that the every government department would from next year be asked to show what it has done with funds disbursed before new allocations are made for the next quarter. The initiative is part of a broader policy programme to ensure that government gets value for money and check its rising expenses