The Minister for Finance, Ken Ofori-Atta, declared that the opposition by the Minority on the passage of the E-Levy is for partly contributing to the current economic woes.
He said the minority’s lack of support for the E-levy has scared investors.
Addressing the public on the decisions taken by the government towards reviving the economy, the Minister said the government did not anticipate the decision of the minority and so their decision not to support the levy threw its plans off-balance.
“[We didn’t expect] that parliament would approve government’s 2022 budget statement, appropriation, and its expenditure plans and then turn around to vote against one of the key revenue generation measures that were being introduced, the E-levy. The unyielding stance of the minority in parliament against the levy gravely affected investor confidence in our capacity to implement our programs and settle our debts, triggering the downgrading by credit agencies and now leaving the cedi vulnerable as we cannot access the international capital market,” he said.
He also disclosed that the war between Ukraine and Russia also disturbed its plans of recovery of the economy as it among other things led to an exponential increase in the cost of crude and food produce including wheat.
Meanwhile, he has announced spending cuts in some sectors of the economy.
These new measures will be in addition to the ongoing 20 percent expenditure cut as part of fiscal stabilization and debt sustainability measures.
He said the move is to help the country achieve the 7.4% deficit target set in the 2022 budget is met.
Find below the new measures announced by the government
The government plans to cut discretionary spending by an additional 10 percent. The Ministry of Finance is meeting with Ministries, Departments and Agencies to review spending plans for the rest of the year.
There will be a 50 percent cut in fuel coupon allocation for all political appointees and heads of government institutions to ensure efficient use of energy resources. This measure is effective February 1, 2022. Fuel coupons normally account for over GHS 60 million, according to the Finance Minister.
The suspension of the purchase of imported vehicles for 2022 to reduce total vehicle purchases for the year. This will affect all new orders, especially Four-wheel drives.
The suspension of all foreign travels except pre-approved statutory travels or critical travels.
The government plans to conclude measures to eliminate ghost workers from the government payroll by the end of 2022.
The government hopes to conclude renegotiations of the Independent Power Producer capacity charges by the end of the third quarter of 2022 to further reduce capacity payments by 20 percent to generate total savings of GHS1.5 billion.
Moratorium on the establishment of new public sector institutions by the end of April 2022
Prioritise ongoing projects over new projects to enhance the efficient use of limited public funds by finishing ongoing or stalled projects
The reduction of expenditure on all meetings and conferences by 50 percent.
Pursue reprofiling strategies to reduce the interest expense burden on the fiscal.
The government also plans to liaise with organised labour to implement measures in the Kwahu declaration of the 2022 National Labour Conference. These include reforms towards addressing salary inequities.
Ministers and the Heads of SOEs will also be contributing 30 percent of their salaries from April to December 2022 to the Consolidated Fund.