2022 budget flawed, says analyst
Energy expert and Executive Director of the Institute for Energy Policy and Research, Kwadwo Poku, has said the 2022 budget is flawed.
According to him, this is because of government’s projection of raking in some Ghs 100.5 billion in total revenue and grants for 2022.
Speaking in an interview on Kessben television and monitored by NorvanReports, Mr Poku noted that never has government been able to attain its revenue targets or go beyond raking in total revenue and grants of GHS 55 billion, but however thinks it can attain a revenue target of GHS 100.5 billion.
“The Finance Ministry is a problem, when we say the Finance Ministry people think it’s the Minister that’s the problem, but no, the technocrats and the civil servants at Finance Ministry are the problem.
“In the whole of 2019 and 2020, the total revenue and grants we have received as a nation is not more than GHS 55bn. Now someone tells you that last year -2020- we programmed something like GHS 70bn as revenue but we had Ghs 47bn, the year before we had GHS 37bn which is the 2019 budget, so it was GHS 10bn better, this year when reading the budget the Finance Minister said government got GHS 47 bn.
“But the the Finance Minister comes to make the budget presentation and says total revenue and grants for 2022 is GHS 100.5 bn and nobody says anything about it.
“It is the E-Levy we are fighting over, but the fundamental principle of the budget is flawed because you haven’t raked in GHS 55bn before, so how do you collect GHS 100bn and then project an expenditure of GHS 137 billion.
“Meanwhile, the total revenue you have ever collected in the country plus grants is GHS 55bn. It’s a fundamental problem and Parliament must talk about this. What I want to point out is that government has never met its target 100%, it’s always misses its target.
“It was unable to meet its target for last year meanwhile it has set GHS 100.5 bn for this year and I blame the technocrats because they are the ones that put the document together and not the Finance Minister.
“Whether its NDC or NPP, when you come as the Finance Minister they show certain things to and you just follow.
“All the monies to be used to pay debts is GHS 28bn and this is on the website of the Bank of Ghana, so if you tell me that your expenditure is GHS 137bn, my brother you are lying to us.
“So all the projects the Finance Minister has put in the budget, goovernment can’t do them all because it’s earn and spend, if the government doesn’t get the money it can’t spend.
“But the biggest problem is that when they make the budget that way, contractors who have heard of such projects in the budget, they keep putting pressure on the Ministry and then they bring this finance and that finance and by the time we realize we have plenty debts.
“And if we continue to do that, it is the cedi we are killing, because of the revenue you get, government can’t rake in more than GHS 70bn and if it indeed wants to do all the GHS 137bn projects, then government will have to borrow Ghs 64bn, why?,” he remarked.
2022 Budget: Total revenue, expenditure pegged at Ghs 100.5 bn and Ghs 137.5 bn
Minister for Finance, Ken Ofori-Atta, in the presentation of the 2022 Budget Statement announced government’s plan to raise total revenue [comprising grants] in excess of Ghs 100.5 billion for the 2022 fiscal year.
The projected revenue representing 20% of GDP, marks an increment from the projected outturn of GH¢70.3 billion, equivalent to 16.0 percent of GDP for 2021. Domestic Revenue is estimated at GH¢99.5 billion and represents an annual growth of 44.0 percent over the projected outturn for 2021.
“The increase in domestic revenue by 44 percent is as a result of the impact of a major progressive tax policy, complemented by improvements in tax compliance and reforms in revenue administration that we have outlined in this budget,” stated the Minister.
With regards to projected expenditure for the 2022 fiscal year, the Minister noted, total expenditure (including payments for the clearance of arrears) is projected
at GH¢137.5 billion, equivalent to 27.4 percent of GDP.
The expenditure estimate for the 2022 fiscal year represents a growth of 23.2 percent above the projected outturn of GH¢111.6 billion, equivalent to 25.3 percent of GDP for 2021.
key drivers of expenditure growth, the Minister disclosed include capital expenditure, funding of key government flagship programmes, wage bill, and interest payments.