Gov’t unveils bold measures to rescue economy - The Daily Statesman Newspaper

Cabinet has approved a pay cut of 30 per cent for Ministers and Heads of State-owned Enterprises, effective April 1, 2022, Ken Ofori-Atta, Minister of Finance, announced yesterday.

In addition, there will be a 50 per cent cut on fuel coupon allocations for all political appointees and heads of government institutions, also effective April 1, 2022.

These are part of the measures to reduce government expenditure, as bold attempt is made to tackle the current challenges confronting the economy.

“With immediate effect, government has imposed a complete moratorium on the purchase of imported vehicles for the rest of the year. This will affect all new orders, especially 4-wheel drives. We will ensure that the overall effect is to reduce total vehicle purchases by the public sector by at least 50 percent for the period; again, with immediate effect government has imposed a moratorium on all foreign travels, except pre-approved critical/statutory travels.

“Government will conclude the renegotiation of the Energy Sector IPPs capacity charges by end of Q3-2022 to further reduce excess capacity payments by 20 percent to generate a total savings of GHC1.5 billion; impose a moratorium on establishment of new public sector institutions by end April, 2022 and prioritise ongoing public projects over new projects. This is to enhance the efficient use of limited public funds over the period by finishing ongoing or stalled but approved projects,” he added.

Mr Ofori-Atta disclosed that these are measures put in place to achieve the 7.4 percent deficit target set in the 2022 budget as well as cushion Ghanaians in the face of the global economic unrest.

Fuel mitigation efforts

As part of measures to mitigate the rising price of petroleum products at the pumps, the government has also reduced fuel prices by 15 percent, effective April 1.

This reduction, which will be in place for three months, will witness BOST margin reduced by 2 pesewas per litre, unified petroleum pricing fund margin reduced by 9 pesewas per litre, fuel margin reduced by 1 pesewa per litre and primary distribution margin reduced by 3 pesewas per litre.

“These are expected to reduce the price of petrol by 1.6 percent and diesel by 1.4 percent. We anticipate the measures taken to stabilise the currency will help further stabilise the prices at the pumps,” Mr Ofori-Atta said.

Mr Ofori-Atta was positive that these measures would address the immediate and short-term challenges confronting the country.

“Government remains resolute and committed to entrenching the structural transformation of our economy in the long term. To this end, we are aggressively pursuing key interventions such as 1D1F, GhanaCARES and the YouStart programmes to improve our ability to locally produce more goods and optimise the opportunities AfCFTA offers us,” he said.

Minority MPs

Mr Ofori-Atta expressed concerns about how the Minority in Parliament are contributing to the current economic woes, even though the government had prepared to move the country forward through the Obataampa GhanaCares programme.

He said the Minority’s lack of support for the E-Levy scared investors, and triggered the downgrade of Ghana’s economy by various international rating agencies.

He said it was not expected that “Parliament would approve government’s 2022 budget statement, appropriation, and its expenditure plans and then turn around to vote against one of the key revenue generation measures that was being introduced, the E-levy.”

He added: “The unyielding stance of the Minority in Parliament against the levy gravely affected investor confidence in our capacity to implement our programmes and settle our debts, triggering the downgrading by credit agencies and now leaving the cedi vulnerable as we cannot access the international capital market.”