Government’s fiscal measures not sufficient to address economic challenges – Seth Terkper
Former Minister for Finance, Seth Terkper, has revealed that the new fiscal measures announced by the Finance Minister Ken Ofori-Atta, are not sufficient to address the economic challenges facing the country at the moment.
Mr Ofori-Atta announced on Thursday, March 24, that with immediate effect, the government has imposed a complete moratorium on the purchase of imported vehicles for the rest of the year.
He said this will affect all new orders, especially 4-wheel drives.
“With immediate effect, Government has imposed a complete moratorium on the purchase of imported vehicles for the rest of the year. This 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,” he said.
“Again, with immediate effect Government has imposed a moratorium on all foreign travels, except pre-approved critical/statutory travels; Government will conclude on-going measures to eliminate “ghost” workers from the Government payroll by end December 2022;
“Discretionary spending is to be further cut by an additional 10%. The Ministry of Finance is currently meeting with MDAs to review their spending plans for the rest of the three (3) quarters to achieve the discretionary expenditure cuts; ii. these times call for very efficient use of energy resources.
“In line with this, there will be a 50% cut in fuel coupon allocations for all political appointees and Heads of government institutions, including SOEs, effective 1st April 2022,” he added.
Read: Climate risks could cost $3.9bn damage to Ghana’s transport sector – Report
However, in reacting to these measures in an interview, Mr Terkper said, “I do not think we have addressed sufficiently the short-term problems that we have. What are those problems?
“First of all, the budget is tight, the revenue is covering two items and is still not enough – compensation and interest. That means that every single item including parts of the interest and compensation on wages is being financed from loans. That includes recurrent expenditure, it includes capital expenditure, it incudes arrears which we have just been told is about 5 per cent of GDP from authoritative source that is the World Bank, and it includes repayment of past loans that we have taken.”
For his part, an Economist, Dr Adu Sarkodie, said the new measures place government in a position that show that they are listening to the concerns raised especially regarding the E-levy.
“It is more of IMF programme on a shadows because of the expenditure containment approach that they are trying to introduce,” he said.
Dr Adu Sakordie added that, “There are two or three things that he touched that is to restore confidence. Remember that they went to the townhall meeting to be able to pass the E-levy. Most of the people who have spoken against the E-levy are actually telling you their frustration to the expenditure by government.
“So you can see the posture of government now. It is to say they have listened to Ghanaians and these are the things they have done to show that they share the concerns with them, that they are also part of the difficulty that we find ourselves in and also to restore confidence in the international community. These are measures that if we had gone to the IMF they would have given to us.”
