Gov’t to save GHS 3.5bn in newly outlined expenditure cutting measures – Ken Ofori-Atta
Government is expected to save a total of GHS 3.5bn from the newly outlined expenditure cutting measures in the face of the current economic crisis.
This is according to the Minister for Finance, Ken Ofori-Atta.
Making the revelation at a press briefing on Thursday, March 24, 2022, Mr Ofori-Atta averred the expenditure cuts are to help government attain the 7.4% fiscal deficit target set for 2022.
According to the Minister, the outlined expenditure cutting measures will significantly improve the macroeconomic conditions of the country and restore confidence in the economy.
Adding that, government is optimistic that the economy will grow bigger this year as the expenditure measures will address both the immediate and medium-term challenges facing the economy.
Below are the various expenditure cutting measures announced by the Finance Minister:
- 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;
- A 50% cut in fuel coupon allocations for all political appointees and Heads of government institutions, including SOEs, effective 1st April 2022;
- 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.
- 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;
- Government will conclude the renegotiation of the Energy Sector IPPs capacity charges by end of Q3-2022 to further reduce excess capacity payments by 20% to generate a total savings of GHS1.5 billion;
- Impose a moratorium on establishment of new public sector institutions by end April, 2022;
- Prioritise 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;
- Reduce expenditure on all meetings and conferences by 50%, effective immediately;
- Cabinet approved that Ministers and the Heads of SOEs to contribute 30 percent of their salaries from April to December 2022 to the Consolidated Fund
- Pursue a comprehensive re-profiling strategies to reduce the interest expense burden on the fiscal; and
- liaise with Organised Labour and Employers Association to implement with immediate effect, the measures captured in the Kwahu Declaration of the 2022 National Labour 13 Conference, including reforms towards addressing salary inequities / inequalities (e.g. Article 71 Office Holders), the weak link between pay to productivity and the sustainability of the payroll
