2023 Budget Will Restore Macroeconomic Stability – Govt.

Government is confident that the country’s 2023 Budget will re-set the economy and restore macroeconomic stability.

 To this end, managers of the economy have called for the support of all Ghanaians to enable them to achieve it.

Senior officials of the Ministry of Finance gave the assurance during a webinar on the 2023 budget for members of the Institute of Financial and Economic Journalists (IFEJ) and the Parliamentary Press Corps in Accra.

They explained that their goal is to significantly enhance revenues, significantly cut down the cost of running the government, significantly expand local production, invest more to protect the poor and vulnerable, and and continue expanding access to good roads, education, and health for every Ghanaian everywhere.

Dr Alhassan Iddrisu, a Director at the Ministry of Finance in a presentation said the budget is, therefore, anchored on a seven-point agenda aimed at restoring macro-economic stability and accelerating economic transformation as articulated in the post-COVID-19 Programme for Economic Growth (PC-PEG).

These he mentioned comprise an agenda to: aggressively mobilise domestic revenue; streamline and rationalise expenditures; boost local productive capacity; promote and diversify exports; protect the poor and vulnerable; expand digital and climate-responsive physical infrastructure; and implement structural and public sector reforms.

To achieve these, there are three critical imperatives: successfully negotiating a strong IMF programme; coordinating an equitable debt operation programme; and attracting significant green investments, Dr Iddrisu added.

“This will enable us to generate substantial revenue, create needed fiscal space for the provision of essential public services and facilitate the implementation of the PC-PEG programme to revitalise and transform the economy”.

Initiatives and interventions

The government he noted would undertake actions, initiatives, and interventions under the seven-point agenda such as to aggressively mobilise domestic revenue, by increasing the current VAT rate by 2.5 percent to directly support roads and digitalisation agenda next year.

Dr Iddrisu who took the journalists through the macro-fiscals and outlook of the budget said the government would also fast-track the implementation of the Unified Property Rate Platform programme in 2023; and review the E-Levy Act and more specifically, reduce the headline rate from 1.5% to one percent (1%) of the transaction value as well as the removal of the daily threshold.

Touching on boosting local productive capacity as the second agenda, the director said they would among others: cut the imports of public sector institutions that rely on imports either for inputs or consumption by 50%.

They would support the aggressive production of strategic substitutes, including the list disclosed at the President’s last address to the nation; support large-scale agriculture and agribusiness interventions.

For the third agenda which is “to promote exports”, Dr Iddrisu explained that they would among others: expand productive capacity in the real sector of the economy and actively encourage the consumption of locally produced rice, poultry, vegetable oil and fruit juices, ceramic tiles among others.

To pursue efficiency in Government expenditures, they would among others: implement the government directives on expenditure measures; integrate public procurement approval processes with GIFMIS to ensure that projects approved are aligned with budget allocation.

They would further review key government programmes to efficiency, and ensure value for money; and reflect relevance, promote; review the efficiency of Statutory Funds

On implementing structural and public sector reform, he said the government would among others impose a debt limit on non-concessional financing; undertake major structural reforms in the Public Sector by reviewing the operations of 36 State-owned Enterprises.

To safeguard the social protection programmes, the government would among others expand social protection programmes such as LEAP, School Feeding, and NHIS for the vulnerable and socially excluded.

Outlook for External Sector in 2023 and the Medium Term

According to him, the external sector’s performance in the outlook would depend largely on the quick resolution of the Russia-Ukraine war and the outcome of recession fears in advanced economies. The thrust of the external sector would focus on rebuilding external buffers enough to cover at least three and half months of imports of goods and services to cushion the economy against adverse external shocks, he said.

This would be underpinned by, among others, bilateral support, and strong remittance inflows, Dr Iddrisu added.

Measures to address the exchange rate depreciation

“The Bank of Ghana will continue to monitor inflation developments and respond appropriately to contain price pressures.

Monetary Policy will focus on using the monetary policy rate to, among others, contain inflationary pressures”.

Since August 2022, the Bank of Ghana has successfully been working with the mining firms, international oil companies, and their bankers to purchase all foreign exchange arising from the voluntary repatriation.

Infrastructure

Touching on infrastructure, Dr Alex Amankwah-Poku of the Ministry of Finance noted that works on the La Beach Road Project and the construction of a 3-tier interchange at Nungua Barrier are progressing steadily.

Works on the interchange currently stand at 62 percent. Construction of the Kumasi Lake Roads and Drainage Extension project is almost complete and stands at 97 percent, he said.

Dr Amankwah-Poku was quick to add that work is ongoing on the 17.85 km Ofankor Nsawam dual carriage road which is scheduled to be completed in May 2024.

While the dualisation on the Tema – Aflao and the Tema – Akosombo roads has commenced. Works are ongoing on the rehabilitation of Assin Fosu – Assin Praso road including the dualisation of 1.2km of Assin Fosu township roads into a 4-lane carriageway at is 53 percent, he told the journalists.

Additionally, works on the reconstruction of Bechem Techimantia – Akomadan and Agona Nkwanta – Tarkwa roads are at 21 percent and 7 percent completion, respectively.

Works on Phase II of the Obetsebi Lamptey Circle Interchange and ancillary work is at 71 percent completion. While construction of the Flyover over the Accra-Tema Motorway from the Flower Pot roundabout is 56 percent complete.

Presenting the 2023 budget in Parliament on Tuesday, November 24, 2022, the Finance Minister, Ken Ofori-Atta described it as vital for the restoration of macroeconomic stability.

Source: African Eye Report