According to data from the Ministry of Finance, a total of GH17.7 billion (or 4.6 percent of GDP) has been spent since 2020 to combat the COVID-19 pandemic.
Addressing Parliament on the State of the Nation, President Nana Akufo-Addo stated that the economic devastation of COVID has been exacerbated since the beginning of this year by Russia’s invasion of Ukraine, which has worsened the global economic outlook.
“We in Ghana have not been spared from this development, and the consequences are being felt in rising living costs at our markets and at fuel stations,” he added.
In addition, the President stated that “the terrible events in Ukraine have a direct impact on our lives here in Ghana.” Russia accounts for 30% of our wheat flour and fertilizer imports. 60% of iron rods and other metal sheets are imported from Ukraine, and nearly 20% of Ghana’s manganese is shipped to Ukraine.”
“The bombs may be dropping on cities half a world away, but they are hitting our pockets here in Ghana,” he said again. Nonetheless, unlike in other parts of the world, we were able to ensure that fuel supplies were not disrupted.”
President Akufo-Addo, on the other hand, stated that the fiscal measures announced by Finance Minister Ken Ofori-Atta are intended to demonstrate that “we are aware that we are in difficult times, and we are addressing the situation.” The austerity measures imposed on members of the Executive have been developed in this context.”
Some of the measures announced by the Finance Minister to address rising expenditure include a 10% increase in discretionary spending; a 50% reduction in fuel coupon allocations for all political appointees and heads of government institutions, including SOEs, effective 1 April 2022; a complete moratorium on the purchase of imported vehicles for the rest of the year; and a moratorium on all foreign travel, except pre-approved critical/statutory travel.
Others reduce spending on all meetings and conferences by half, effective immediately; pursue comprehensive re-profiling strategies to reduce the fiscal burden of interest expense; and so on.
In terms of revenue, the Finance Minister stated that the government will begin implementing and collecting the revised Property Rate by the end of April 2022; implement the E-VAT/E-Commerce/E-Gaming initiatives by the end of April 2022; and implement the E-VAT/E-Commerce/E-Gaming initiatives by the end of April 2022. By July 2022,
compel Parliament to expedite the passage of the E-Levy Bill, Tax Exemptions Bill, and Fees and Charges Bill; and prioritize the Revenue Assurance, Compliance, and Enforcement (RACE) Program to plug revenue leakages, particularly at ports and the infamous fuel bunkering and small scale mining exporters cabal.
Mr. Ofori-Atta also announced a 15 pesewas per litre reduction in margins in the petroleum price build-up, effective April 1st, 2022, as a relief to Ghanaians.
Source: Joynews
