Gov’t to rationalise 20% of expenditure in 2022 Budget

The government plans to cut 20 percent of its spending in the 2022 Budget, according to Finance Minister Ken Ofori Atta.

The government’s entire expenditure for 2022 has already been approved by Parliament, but in order to maintain fiscal discipline, Cabinet has opted to decrease spending by up to 20 percent.

Addressing the media on Wednesday, Mr Ofori-Atta said the expenditure management by the government was expected to continue from this year and beyond, in the midst of the global impact of covid-19 on economies.

“To ensure that the government matches all expenditure to revenue inflows, all expenditure commitments in 2022 will be adjusted to match revenue collection,” the Finance Minister announced.

“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 percent 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.

The Minister said that this means that Ghana’s fiscal consolidation agenda is going to be primarily driven by the expenditure side with support from additional revenue. In this regard, projected revenues in the 2022 budget will only be spent when they materialise.

Following the impact of the pandemic on the economy, the latest bold step adds to government’s announced fiscal consolidation strategies, which includes a focus on more internal revenue generation.

The government’s projected expenditure for 2022, which has already been approved by Parliament, is GHC135.6 billion.

Public sensitisation

In addition, the Minister told journalists that government appointees were beginning a nationwide public awareness campaign on the need for the controversial e-levy to be implemented.

Officials, including himself, would personally engage the citizenry on the many policies and programmes for which the government will spend the tax funds.

He stated that the government is persuaded of the importance of the e-levy and how it incorporates the concept of burden-sharing for Ghana’s development.

“Beginning Thursday (yesterday), a team comprising myself, colleague ministers and other key members of government will embark on a public engagement and sensitisation campaign across the country. We intend to communicate clearly on the proposed mechanics of the e-levy, 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 Ghana Beyond Aid,” he said.

Mr. Ofori-Atta further stressed that some preliminary public engagements show that many people are not against the e-levy, but only want accountability on the use of the money.