The former Finance Minister Hon. Seth E. Terkper has expressed a worrying concern about the manner in which the debate on Electronic Levy (e-Levy), as captured in the 2022 budget, appears to have swallowed up all other serious discussions and debate on other areas of the budget.
He said, it’s important that whiles the two factions in the push for discussions on the e-levy, they equally should not lose focus on debate on other critical areas of the economy such as the unsustainable Deficit, Borrowing and Public Debt.
They should also be mindful of the fact that the clock is ticking to end of December 31st 2021. At this point all authorization for payment from the consolidated fund will cease.
This will result in the committee of Parliament rushing the debate of sector report or in the extreme, government will shut down.
Speaking in an interview with The New Crusading Guide to elicit his views on the ‘Hanging Budget’ Mr. Terkper stated that it looks as if all other economic factors or indicators in the budget 2022 are fine and hence the little attention but the reality is that the e-levy is only one and a small quantitative part of the many fiscal challenges this government is having to grapple with.
He said, it is feeble to assume that the frenzy over the e-levy will contribute anything significant to taking the economy out of the quagmire from 2022 on our home grown terms or through an IMF Program.
Mr. Terkper indicated that the e-levy is expected to rake-in about Gh¢6.9b which forms part of the ambitious government target of a Gh¢100.4b in total revenue vis-à-vis an expected 2022 deficit of Gh¢37.5b or even a Gh¢47b or close to GHc50b without the IMF SDR flows of about Gh¢4.5b.
“On these basis, you are however reminded that 2022 will be the third year running that despite ambitious revenue targets, support for COVID-19, total revenue has not ben able to cover compensation and interest”, he indicated.
He said, “today it’s difficult for Ghana to access Capital Market and yet we have to raise Gh¢40b OR MORE to finance recurrent expenditure, arrears, exceptional expenses (i.e bailout) and debt repayment (amortization). These are the key issues facing the nation which should go to the core or the heart of the debate of our economy in the House.”
On the issue of the ballooning debt stock, the former Finance Minister stated that there was no need to belabor the point because multilaterals, bilaterals/DPS, Rating Agencies, Market Analyst and Ghanaian citizens have sounded enough alarm already.
He added that the deficit, borrowing would and debt is not just about revenue or taxes.They are primarily about the level of expenditures which is another desirable debate that must take place.
