Finance Minister Ken Ofori-Atta
The Minister of Finance, Ken Ofori-Atta, has urged the Majority and Minority sides of Parliament to work in unison with the Executive to ensure effective implementation of the 2022 Budget Statement and Economic Policy of the government.
Addressing a press conference yesterday, he drew attention to the consequences of not passing the Appropriation Bill in time to enable the government to implement the budget.
“This would imply that from 1st January, 2022, for Government to continue to work, we will need to obtain parliamentary approval to spend in advance of appropriation. Other than that, the entire Government would have to ‘shut down’, which would mean, to name a few, no salaries for the almost 700,000 public sector workers, including nurses, doctors, teachers, personnel of the security services; no government services and other expenditure, including payment of contractors; uncertainties in the business environment; and pressure on the currency leading to currency depreciation.
“Furthermore, we would have incurred devastating damage to our fiscal consolidation programme, debt sustainability and International Capital Markets credibility,” Mr Ofori-Atta explained.
Minority concerns
On the concerns raised by the Minority Caucus, as the grounds for the stiff opposition to the budget, the Finance Minister disclosed that he had written, on behalf of the President, to the Speaker of Parliament providing details of modifications to the document. He said that is a “response to emerging concerns by all stakeholders, including the Minority.”
“With regards to Agyapa Royalties Ltd, we shall amend paragraphs 442 and 443 to take out references to mineral royalties collateralisation. It is important to note that any reference to Agyapa was for informational purposes, and as such was not reflected in the fiscal framework,” he disclosed.
“In respect of the unfortunate tidal waves, which rendered about 3,000 people homeless in Keta, we shall make the necessary budgetary allocations of at least GHS10 million to complete the Feasibility and Engineering studies for the coastal communities adversely affected.
“We will broaden the scope of the study to consider a more comprehensive solution to protect Ghana’s 540 Km of coastline, including the 149 Km between Aflao and Prampram,” the Finance Minister added.
“Relating to the Aker Energy transaction, we shall amend paragraph 829 of the 2022 Budget on the acquisition of a stake from Aker Energy and AGM Petroleum by GNPC, to reflect the resolution of Parliament dated 6th July, 2021, that ‘the terms and conditions of the loan for the acquisition of the shares shall be brought to Parliament for consideration pursuant to Article 181 of the Constitution,” he stated.
With regard to concerns raised about the benchmark values, he said the government “shall avert any hardships to importers and consumers while safeguarding the interest of local manufacturing industries to secure and expand jobs for our people.”
Mr Ofori-Atta explained that this “administrative exercise, which reviewed 43 out of 81 line items, has the objective to promote local manufacturing and the 1D1F policy, including the assembling of vehicles.”
He said it is critical to note that “this adjustment affects only 11.4% of the total CIF value, of which 50% is for vehicles,” adding “from our analysis, “the potential increase in retail prices should be relatively insignificant and therefore inflation should be muted”.
YouStart, E-Levy
The Minister of Finance further explained that the YouStart policy would also support the country’s accomplished traders with appropriate training and access to capital to become manufacturers “in order to expand the industrial base of our society and our import substitution strategy, in line with our Ghana Beyond Aid agenda.”
He said the government would work with the relevant committees of Parliament “to reflect these modifications in the 2022 Budget, as is the usual practice, before the Appropriation Bill is passed.”
He added that any other concerns, which may emerge, “shall be addressed during the discussions of the estimates by the Committees, as has been the tradition”.
On the most controversial matter of the E-levy, Mr Ofori-Atta said, “having regard to its serious fiscal
implications”, the government would continue its consultations with the Minority Caucus in Parliament and other relevant stakeholders, “with a view to achieving consensus and reverting to the House in the shortest possible time”.
Bright prospects
He gave the assurance the government remains committed to addressing the challenges the country faces as well as sustaining its recovery from the impact of the Covid-19 pandemic “within our fiscal consolidation and debt sustainability”.
“We have a very competent team managing the economy and the prospects are bright. I believe that this Budget sets us on a path of irreversible transformation: from dependence on the State to individual enterprise; from generation of job seekers to a generation of job creators; and from a place of inertia and uncertainty to enterprise, innovation and progress for all,” he stated.
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