Take a second look at 20% expenditure cut for MMDAs – Gov’t told
Finance Lecturer at the University of Ghana Business School, Prof Lord Mensah, has urged the government to take a second look at the 20% cut in expenditure for some Municipal, Metropolitan and District Assemblies, Departments and Agencies [MMDAs].
He noted that some operations of the MMDAs have direct impact on the economy, and so the expenditure cut of the central government should be looked at.
“looking at the various categories on the expenditure side, if you go down to the appendix of the budget, the central government’s expenditure for me needs to be looked at.
“Because if you are cutting expenditure, then insensitive areas like education, health and roads, you might not necessarily look at that place to reduce their budget. However, areas that don’t have direct impact, you may go ahead and cut them. But to say that you are cutting across all the areas, I have a question to that”, he said.
He, however, indicated that the move by the government is good and welcoming.
“The initiative in itself is good, I have been outspoken on the need for government to look at the expenditure side of the budget and how we can contain some expenditure,” he added.
Read: 20% expenditure cut by government in the right direction – Analyst
Government is said to suspend about 20% of budgeted expenditure for 2022.
This is according to the Minister for Finance, Ken Ofori-Atta.
Making the assertion at a press briefing on Wednesday, January 19, the Finance Minister noted the move implies government’s fiscal consolidation agenda is not going to be only revenue-led but also expenditure-focused.
“We are also strengthening expenditure management in 2022 and beyond. To ensure that we match all expenditures to revenue inflows, all expenditure commitments in 2022 will be adjusted to match revenue collection.
“Therefore, in accordance with Section 25 of the Public Financial Management Act (PFMA) law, the quarterly expenditure ceilings of the approved budget will include up to a 20% downward adjustment, beginning in the first quarter of 2022, in commitments across board for all covered entities benefiting from the 2022 Budget, subject to revenue performance,” he remarked.
“This means that our fiscal consolidation agenda is not going to be only revenue-led but also expenditure focused,” he added.
Government’s projected expenditure for 2022, which has already been approved by Parliament is GHS 135.6 billion.
