Finance Minister Ken Ofori-Atta says government envisages saving about GH¢3.5billion from its new expenditure cuts, as it aims to achieve the 2022 fiscal deficit target of 7.4 percent of gross domestic product (GDP).
This follows a Cabinet retreat last Saturday to discuss immediate measures government wants to implement to alleviate economic challenges the country is going through
At a press briefing yesterday, Mr. Ofori-Atta outlined that the GH¢3.5billion savings can be made through some new expenditure-cut measures which include an additional 10 percent cut of discretionary spending; a 50 percent cut in fuel coupon allocations for all political appointees and heads of government institutions, including SOEs, effective April 1, 2022; as well as a cut of 30 percent from salaries of ministers and the heads of SOEs from April to December 2022 to be lodged in the Consolidated Fund.
“Cabinet approved that ministers and the heads of SOEs should contribute 30 percent of their salaries from April to December 2022 to the Consolidated Fund. We would like to thank the Council of State for their leadership in complementing government on this policy,” Mr. Ofori-Atta said.
“The Ministry of Finance is currently meeting with MDAs to review their spending plans for the remaining three (3) quarters to achieve the discretionary expenditure cuts,” he further mentioned.
Also, there is an imposition of a complete moratorium on the purchase of imported vehicles for the rest of the year. This, the minister said, 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.”
In addition, Mr. Ofori-Atta indicated that there will be an immediate imposition of a moratorium on all foreign travel, except pre-approved critical/statutory travel.
Other measures in line with expenditure cuts include concluding renegotiation of the Energy Sector IPPs’ capacity charges by end of Q3-2022 to further reduce excess capacity payments by 20 percent and generate a total savings of GH¢1.5billion.
Government intends to also impose a moratorium on the establishment of new public sector institutions by the end of April 2022 – while prioritising 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.
Mr. Ofori-Atta further indicated a reduction in expenditure on all meetings and conferences by 50 percent with immediate effect.
There will be further engagement with Organised Labour and Employers Association to implement, with immediate effect, measures captured in the Kwahu Declaration of the 2022 National Labour Conference – including reforms toward addressing salary inequities/inequalities, such as the Article 71 Office Holders; the weak link between pay to productivity and sustainability of the payroll.
Again, government will conclude ongoing measures to eliminate ‘ghost’ workers from the payroll by end December 2022.
He, however, dismissed assertions that the Free SHS will be reviewed.
“Let me say this, President Nana Akufo-Addo has absolutely no intention to roll back a major policy like Free SHS. We see education as the best enabler for sustainable economic growth and transformation, and will do more to improve on it for it to serve more and better our children,” he emphasised.
These new initiatives come after government announced in January that it will immediately implement a 20 percent expenditure cut as part of fiscal stabilisation and debt sustainability measures.