Ken Ofori-Atta
The Minister of Finance, Ken Ofori-Atta, yesterday announced specific expenditure cuts by the government to help address the current economic challenges facing the country.
Among the list is a 50 per cent reduction of fuel allocation coupons for all government appointees, including heads of government institutions, and State Owned Enterprises (SOEs), starting April 1, 2022.
This, he said, would ensure efficient use of energy resources and save the country about GH¢50m annually.
Touching on other measures to help restore the country’s economy at a press conference in Accra, Mr. Ofori-Atta said, “With immediate effect, government has imposed a complete moratorium on the purchase of imported vehicles for the rest of the year,” adding, “This will affect all new orders, especially 4-wheel drives.”
He explained that the moratorium on the purchase of imported vehicles is expected to reduce, by at least 50 per cent, the total vehicle purchases by the public sector.
Similarly, he added that the government has also imposed a moratorium on all foreign travels, except pre-approved critical or statutory travels with immediate effect, and restricted the establishment of new public sector institutions by the end of April, 2022.
“The government also intends to reduce expenditure on all meetings and conferences by 50%, effective immediately,” he stated.
Fiscal Deficit
Listing additional measures targeted at ensuring the achievement of the fiscal deficit target of 7.4% of GDP in 2022, Mr. Ofori-Atta said the government will introduce an additional 10% cut in discretionary spending.
He noted that the Ministry of Finance is currently meeting with MDAs to review their spending plans for the rest of the three (3) quarters to achieve the discretionary expenditure cuts.
This cut is expected to complement the ongoing 20 per cent expenditure cut, as part of fiscal stabilisation and debt sustainability measures being undertaken by the government.
Mr. Ofori-Atta observed that the government will pursue a comprehensive re-profiling strategy to reduce the interest expense burden on the economy.
“We will liaise with Organised Labour and Employers Association to implement with immediate effect, the measures captured in the Kwahu Declaration of the 2022 National Labour Conference, including reforms towards addressing salary inequities/inequalities (e.g. Article 71 Office Holders), the weak link between pay to productivity and the sustainability of the payroll,” he intimated.
Other Measures
Furthermore, the sector minster indicated that the government will conclude ongoing measures to eliminate “ghost” workers from the government’s payroll by end of December 2022.
“The government will conclude the renegotiation of the energy sector IPPs capacity charges by end of Q3-2022, to further reduce excess capacity payments by 20% to generate a total savings of GH¢1.5 billion, and will prioritise ongoing public projects over new projects. This is to enhance the efficient use of limited public funds over the period by finishing ongoing or stalled but approved projects,” he said.
Mr. Ofori-Atta noted that already cabinet has approved that ministers and the heads of SOEs should contribute 30 per cent of their salaries from April to December 2022, to the Consolidated Fund.
“All of these measures are aimed at ensuring that we achieve the 7.4% deficit target set in the 2022 budget,” he said.
BY Jamila Akweley Okertchiri