Franklin Cudjoe, Founding President and Chief Executive Officer of IMANI Centre for Policy and Education has iterated that the country is currently in a very difficult situation saddled with huge public debt stock.
As a result, he beckoned government to reduce the budget allocated to the Office of Government machinery by 25 percent. The IMANI Boss, thus, requested a little sacrifice from the government itself so as to reduce planned expenditure for 2022 to create space for the expansion of key infrastructural projects in the country.
“Admittedly, we are in the hardest of times with a debt overhang so perilous that girding our collective loins seems inescapable. The Minority should continue discussing with government, but charity begins with the government- at least reduce the budget to the office of government machinery by 25%. It can help build a few school blocks. Carpe diem!” .
Franklin Cudjoe
The total budget appropriated for the office of government machinery for 2022 is GH¢3,047,900,000 of which Compensation of Employees is projected at GH¢751,769,000. Procurement of Goods and Services will amount to GH¢1,195,944,000 while capital expenditure consumes GH¢1,100,187,000. A reduction by 25% as proposed by the IMANI Boss will amount to GH¢761,975,000 reducing the total budget to GH¢228,5925,000 for 2022.
Need for burden sharing
On December 6, 2021, Finance Minister, Ken Ofori-Atta told Parliament that “raising the required revenue will require sacrifice and burden sharing by all of us. Government on its part shall continue to rationalize expenditures, protect the public purse, whilst ensuring the efficient use of taxpayer contributions and value for money”.
With this commitment from government, it will be proper if efforts to reduce the wage bill starts with the government reducing its size and expenditure on its machinery in addition to cutting back on waste and corruption.
Mr. Cudjoe who was commenting on the Modifications to the Government’s 2022 Budget Statement and Economic policy presented to Parliament by the Minister of Finance, Ken Ofori-Atta on December 6, 2021, pointed out some positives which he thinks, signal some hope but not too impressed with some aspects, particularly, the e-levy.
“I have read the Finance Minister’s statement on the 2022 budget. The part on Agyapa and Aker deals are a good first step to dealing with the vexed issues. We will watch the space. I had hoped there would be an emphatic statement on the E-levy, beyond consultation with the Minority and a clarification on agency fees for collecting same”.
Franklin Cudjoe
Still commenting on the 2022 budget statement, Mr. Cudjoe made some suggestions regarding some of the sensitive issues in the 2022 budget that sparked public outcry. “How about 0.75% E-levy instead of 1.75%, a $3bn value for 49% royalties in Agyapa instead of govt’s projected $1bn (based on present value calculation of gold prices)?”, he quizzed.
Improving domestic revenue mobilization
Commenting on the E-levy, Mr. Ofori-Atta told Parliament that considering its serious fiscal implications, government will continue its consultations with the minority to come to a consensus. The Finance Minister, who is trying to convince the legislature to approve the 2022 budget emphasized that the President’s goal is to raise adequate domestic revenue by expanding the tax net in order to tackle boldly and creatively the important issues of job creation, infrastructure delivery and debt sustainability.
Mr. Ofori-Atta presented the 2022 Budget Statement and Economic Policy to Parliament on 17th November 2021 to parliament. However, the budget attracted outrages from the minority in Parliament, Faith Based Organizations, Unions, Employers, Students, CSOS, and the General Public; and this called for a review.
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