Ofori-Atta Outlines 12 Expenditure Cut Measures To Mitigate Economic Challenges

Ofori-Atta Outlines 12 Expenditure Cut Measures To Mitigate Economic Challenges

  • Finance Minister today outlined some measures to reduce government spending as the economic challenges rage on
  • He told journalists at a press briefing that the government remained committed to improving the economy
  • Among other things, he disclosed that discretionary spending has been cut further by 10% aside from an earlier 20% cut

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Finance Minister, Ken Ofori-Atta, has outlined a raft of measures to reduce government spending as part of a general plan to mitigate the economic challenges.

At a press briefing today, Thursday, March 24, 2022, to outline strategies approved at a recent cabinet retreat to save the economy, the Finance Minister said the government has resolved to cut spending by 10% aside from an earlier 20% cut.

Ofori-Atta and market woman
Ken Ofori-Atta (L) and a fish seller in a Ghanaian market. Source: Getty Images
Source: Getty Images

The following are the 12 expenditure cut measures outlined by the Minister during his address:

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1. Additional 10% cut in discretionary spending aside from an earlier 20% cut, bringing the total to 30%.

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The Minister said his outfit was currently meeting with MDAs to review their spending plans to achieve the discretionary expenditure cuts for the rest of the three quarters.

According to the Minister, these measures will achieve the 7.4% deficit target set in the 2022 budget.

2. A 50% cut in fuel coupon allocations for all political appointees and Heads of government institutions, including SOEs, effective 1st April 2022.

The Minister said this would enable the efficient use of energy resources.

3. A complete moratorium on the purchase of imported vehicles for the rest of the year with immediate effect.

"This will affect all new orders, especially four-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," he said.

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4. Imposition of moratorium on all foreign travels, except pre-approved critical/statutory travels.

5. Government will conclude ongoing measures to eliminate “ghost” workers from the Government payroll by end of December 2022.

6. Conclude the renegotiation of the Energy Sector IPPs capacity charges by the end of Q3-2022 to further reduce excess capacity payments by 20% to generate a total savings of GH¢1.5 billion;

7. A moratorium on the establishment of new public sector institutions by end of April 2022.

8. 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," the Ken Ofori-Atta.

9. Reduce expenditure on all meetings and conferences by 50%, effective immediately.

10. Ministers and the Heads of SOEs to contribute 30% of their salaries from April to December 2022 to the Consolidated Fund.

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"We would like to thank the Council of State for their leadership in complimenting the Government on this policy," he said.

11. Pursue a comprehensive re-profiling strategy to reduce the interest expense burden on the fiscal.

12. Liaise with Organised Labour and Employers Association to implement with immediate effect the measures captured in the Kwahu Declaration of the 2022 National Labour 13 Conference, including reforms towards addressing salary inequities/inequalities (e.g. Article 71 Office Holders), the weak link between pay to productivity and the sustainability of the payroll.

Minority’s Strong Opposition To E-Levy Bad For Investor Confidence – Ofori-Atta Laments

The Finance Minister, Ken Ofori-Atta, has cautioned against the strong opposition by the Minority Members in Parliament on the E-Levy, warning that it is bad for investor confidence in the economy.

At a press briefing on Thursday, March 24, 2022, to outline the measures taken by the government to mitigate the current economic challenges, Mr Ofori-Atta said the Minority’s opposition was also affecting the government’s efforts to implement critical programmes.

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The passage of the controversial E-Levy remains a major sticky point in Parliament as the Minority and Majority take a hardline on the tax proposal.

Source: YEN.com.gh

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