By Ernest Addo
As Ghanaians reel under harsh economic conditions occasioned by the on-going Russia-Ukraine war, Government has introduced some far-reaching spending cuts targeted to rake in some 3.5 billion Ghana cedis.
Also, Government would conclude the renegotiation of the Energy Sector IPPs capacity charges by end of third quarter (Q3-2022), to further reduce excess capacity payments by 20% to generate total savings of GHS1.5 billion.
The minister of finance and economic planning, Ken Ofori Atta, fielding questions after announcing the austerity measures, yesterday, at the Conference room of the finance ministry, however assured, that the spending cuts would affect only political appointees and not all civil servants.
“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; …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,” Ken Ofori Atta disclosed.
The minister more so, allayed fears that the free Senior High School policy could be affected by the austerity measures intimating that “Let me say this, President Nana Addo Dankwa Akufo-Addo has absolutely no intention to roll back on a major policy like Free SHS. We see education as the best enabler for sustainable economic growth and transformation and will do more to improve on it for it to serve more and better our children.
24. All of these measures are aimed at ensuring that we achieve the 7.4% deficit target set in the 2022 budget.”
Read below all the new measures announced by government:
- The government plans to cut discretionary spending by an additional 10 percent. The Ministry of Finance is meeting with Ministries, Departments and Agencies to review spending plans for the rest of the year.
- There will be a 50 percent cut in fuel coupon allocation for all political appointees and heads of government institutions to ensure efficient use of energy resources. This measure is effective April 1, 2022. Fuel coupons normally account for over GHS 60 million, according to the Finance Minister.
- The suspension of the purchase of imported vehicles for 2022 to reduce total vehicle purchases for the year. This will affect all new orders, especially Four-wheel drives.
- The suspension of all foreign travels except pre-approved statutory travels or critical travels.
- The government plans to conclude measures to eliminate ghost workers from the government payroll by the end of 2022.
- The government hopes to conclude renegotiations of the Independent Power Producer capacity charges by the end of the third quarter of 2022 to further reduce capacity payments by 20 percent to generate total savings of GHS1.5 billion.
- Moratorium on the establishment of new public sector institutions by the end of April 2022
- Prioritise ongoing projects over new projects to enhance the efficient use of limited public funds by finishing ongoing or stalled projects
- The reduction of expenditure on all meetings and conferences by 50 percent.
- Pursue reprofiling strategies to reduce the interest expense burden on the fiscal.
- The government also plans to liaise with organised labour to implement measures in the Kwahu declaration of the 2022 National Labour Conference. These include reforms towards addressing salary inequities.
- Ministers and the Heads of SOEs will also be contributing 30 percent of their salaries from April to December 2022 to the Consolidated Fund.
