Beginning in the first quarter of 2022, the government will suspend about 20% of budgeted expenditure for the year, Ken Ofori-Atta, the Minister for Finance has said.
The minister said the move will mean that the fiscal consolidation agenda of the government is not going to be only revenue-led but also expenditure-focused.
Taking his turn at the Information Minister’s regular press briefing Wednesday 19 January 2022 Ofori-Atta said, “We are also strengthening expenditure management in 2022 and beyond. To ensure that we match all expenditures to revenue inflows, all expenditure commitments in 2022 will be adjusted to match revenue collection.
“Therefore, in accordance with Section 25 of the Public Financial Management Act (PFMA) law, the quarterly expenditure ceilings of the approved budget will include up to a 20% downward adjustment, beginning in the first quarter of 2022, in commitments across board for all covered entities benefiting from the 2022 Budget, subject to revenue performance.”
He added, “This means that our fiscal consolidation agenda is not going to be only revenue-led but also expenditure focused.”
Investment in infrastructure
Ofori-Atta observed that the inability to share the burden and generate enough revenue had negatively affected the growth of the country compared to its neighbours within the sub-region.
“We intend to communicate clearly on the proposed mechanics of the E-Levy [and] its potential benefits to the people of Ghana within the spirit of burden-sharing that must guide us in our development efforts as we move to Ghana Beyond Aid,” Ofori-Atta said
He added, “We have invested less in infrastructure. Between 1961 to 2020, Ghana’s average Gross Fixed Capital Formation Ratio was 17%, compared to 25% in sub-Saharan Africa. Moreover, between 2017 and now our tax to GDP has hovered between 11% to 13% compared to our peers who are between 16% to 20%.”
Ofori-Atta reiterated the government’s commitment to implementing a coherent strategy that would provide opportunities for all Ghanaians through increased resource mobilisation, prudent expenditure management, job creation and skills training.
