Govt Reaffirms Spending Cut

“Today, as we speak, the debt service plus amortisation, when you combine that with compensation, it takes away about 110% of our revenues.”

DEPUTY MINISTER of Finance, John Ampontuah Kumah, has stated that the government will uphold its commitment to cut down on expenditure next year, as captured in the 2023 budget.

According to him, even though there was significant rigidity in the budgeting for the country which made it difficult to cut on spending, the government will embark on a programme of aggressive spending cuts.

Speaking in Parliament during a debate on the 2023 budget, the deputy minister said, “Today, as we speak, the debt service plus amortisation, when you combine that with compensation, it takes away about 110% of our revenues.”

“And we all know that these are matters that the Government cannot do much in terms of cutting down on such expenditures. That is why sometimes, even though it is the objective to cut down on expenditures, we still see high levels of expenditures in the budget and high debt burden which has become unsustainable,” he noted.

He continued, “We announced in the 2022 budget in the aftermath of a cabinet meeting to do at least 30% cut on discretionary expenditures. Mr. Speaker, when you look at the figures that have been reported in this budget, indeed, the government cut down on various expenditure line items.”

“For instance, compensation had a reduction in the expenditure, goods and services, capital expenditure and discretionary expenditures all had reduction,” Dr. Kumah said.

He explained that unfortunately, due to the forex, the government had extra payment on the interest rate which constituted a high component of the debt portfolio, hence, the increment in the overall expenditure of the government in the budget.

The government plans to spend a total of GH¢205,432 million, which is 25.6% of GDP, and it includes compensation (GH¢44,990 million), goods & services (GH¢8,048 million), capital expenditure (GH¢27,694 million), interest payments (GH¢52,550 million), grants to other government units (GH¢30,079 million), and other expenditures (GH¢27,636 million).

The deputy minister continued, “Government was really committed to cutting down on expenditures and all the figures, as reported in this budget, confirm that indeed the government was wishing to cut down on expenditures.”

“Pages 56 and 57 of the 2023 budget and there are about 36 expenditure item lines that the government has considered as expenditure measures to cut down on expenditures,” he pointed out.

 

Minority View

Earlier on, the Ranking Member on the Finance Committee, Dr. Cassiel Ato Baah Forson, had taken a swipe at the government for the increase in the total expenditure figure in the budget.

He claimed that some businesses were moving from Ghana to Ivory Coast, due to “the poor economic conditions we find ourselves in.”

“Our debt is currently unsustainable. Our country is going through sovereign insolvency stress, yet this budget statement, the bulkiest of all budget statements and unfortunately the hopeless one, failed to address the situation,” he argued.

The NDC MP for Ajumako-Enyan-Esiam said the 2023 budget introduces 23 tax measures, contending, “So it is taxation to more taxes as if we don’t care about the people; not from taxation to production.”

He again criticised the government for the reintroduction of road tolls, saying, “This government had informed us through the last budget that they are removing road tolls. Today, if you are to look at page 101 paragraph 468, they are saying they are going to reintroduce road tolls.”

“This is a government that treats policy like socks – policy is not like socks to put it on and take it off when you want. That should not be entertained. When you want to introduce tax policy you think about it,” he asserted.

Source: dailyguidenetwork

 

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