The Country Advisor for the Centre for Tax Analysis in Developing Countries (TaxDev), Dr. Abdul Malik Iddrisu, has urged the government to come clear on the specific amount of each expenditure item that is going to be affected by the announced expenditure-cut measures for the 2022 fiscal year.
Dr. Abdul Malik Iddrisu said the government must make it clear to the citizens that these are the current figures of the discretionary expenditure portfolio and that “we’re reducing it from this to this, and these are the items that are going to be affected”.
“What discretionary expenditures? What numbers are we speaking about? I think we need that clarity to be able to make this point, whether we are embarking on a contractionary fiscal policy or not. Otherwise, it’s so vague, it really doesn’t help with the issues because at the end of the day, people want to be able to assess what you’ve done. How are they going to do the assessment? So, it’s good for us to have some indicators on hand, see their level today and then their level tomorrow, and based on that, we can say that we actually did embark on some expenditure cut on item A, B, and C”.
Dr. Abdul Malik Iddrisu
Dr. Abdul Malik told the Vaultz news that it’s good to announce such a thing, but thinks the government should have gone a bit further, to be more specific, in terms of which expenditure items that are going to be cut. He emphasized that “we need that and that’s the only way you can be able to make proper sense of the policies that they rolled out. Without that, it is difficult for you to have a clear sense of what is happening”.
Need to cut waste in government spending
The Tax Policy Analyst also lamented the waste in spending by some government officials, saying he doesn’t see the usefulness of some of these spending because there’s, “a lot of misbehavior when it comes to spending on the public side”.
“You have people who actually draw on the taxpayers’ money on daily basis for running their vehicles; they go and pick fuel for free. Are we going to stop that? We’re going to see a 50% reduction in the coupon that is given out; how will you match that? How much is going to be spent on fuel coupons and how much are we going to bring it to? So we need that clarity. When you tell me that you are going to reduce fuel coupons by 50% and I do not have access to that information, I cannot be able to do an assessment of what you have done.
“So, basically, what I’m saying is that, we need a benchmark. What is the current rate of spending? Or how much are we slashing it by? What will be the spending after the announcement? So that people can be able to pick those numbers and make sense out of them. Otherwise, it’s more like a loose play and people just go out there and say anything and nobody is actually watching or monitoring what they are doing”.
Dr. Abdul Malik Iddrisu
Dr. Abdul Malik said bringing some clarity on the measures announced by the government is very important because “that’s the only way we can build credibility in public policy announcements”.
The Tax Policy Analyst was commenting on the impacts of the measures announced by the government on March 24, 2022 to mitigate the economic difficulties facing the country as a result of recent global and domestic conditions.
Finance Minister, Hon. Ken Ofori-Atta, announcing the measures, said the developments within the global and domestic economies have manifested in rising fuel prices, rising inflation and cost of living, exchange rate depreciation, rising interest rate, and revenue mobilization challenges.
Some of the announced measures include a 50% cut in fuel coupon allocations for all political appointees and heads of government institutions; imposition of a complete moratorium on the purchase of imported vehicles for the rest of the year; imposition of a moratorium on establishment of new public sector institutions by End-April, 2022; and a reduction in expenditure on all meetings and conferences by 50% with immediate effect. Government also announced additional cut on discretionary expenditures for the 2022 fiscal year by 10%. Tax Tax Tax
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