2023 budget: Ghana’s economy is in ICU – Ato Forson

The Finance Minister Ken Ofori-Atta only presented grammar in the 2023 budget statement he delivered , Member of Parliament for Ajumako-Enyan-Esiam Dr Cassiel Ato Forson has said.

According to him, the Finance Minister only informed Ghanaians that the economy is currently in the intensive care unit (ICU), an indication that if care is not taken it will die.

He referred to the decision to freeze hiring and also the increment in the Value Added Tax (VAT) as some of the reasons the economy is about to die.

“The Finance Minister only gave Ghanaians grammar. He has informed us that the economy is in ICU…the dose they gave to us today if care is not taken the economy will die.

“There is going to be a freeze on employment but unemployment is in excess of 50 percent,” he told journalists after the budget presentation.

The Finance proposed in the 2023 budget presentation an increment in the Value Added Tax (VAT) by 2.5 per cent.

The standard VAT rate is 12.5%, except for supplies of a wholesaler or retailer of goods, which are taxed at a total flat rate of 3%.

The proposal to increase the rate forms part of the seven point agenda to revitalize the economy, the Finance Minister told Parliament on Thursday November 24.

The seven-point agenda is ‘Aggressively mobilize domestic revenue; Streamline and rationalise expenditures; Boost local productive capacity; Promote and diversify exports; Protect the poor and vulnerable; Expand digital and climate-responsive physical infrastructure; and Implement structural and public sector reforms.’

He also announced that the government will undertake major structural reforms in the public sector.

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He also announced a freeze on employment into the civil and public service.

He also said there shall be no new government agencies established in 2023.

He said these while presenting the budget in Parliament on Thursday November 23.

Mr Ofori-Atta said as a first step toward expenditure rationalisation, government has approved a number of directives which takes effect from January, 2023.

These are “All Ministries, Departments and Agencies (MDAs), Metropolitan, Municipal and District Assemblies (MMDAs) and State-Owned-Enterprises (SOEs) are directed to reduce fuel allocations to Political Appointees and heads of MDAs, MMDAs and SOEs by 50%. This directive applies to all methods of fuel allocation including coupons, electronic cards, chit system, and fuel depots. Accordingly, 50% of the previous years (2022) budget allocation for fuel shall be earmarked for official business pertaining to MDAs, MMDAs and SOEs;

“A ban on the use of V8s/V6s or its equivalent except for cross country travel. All
government vehicles would be registered with GV green number plates from
January 2023; Limited budgetary allocation for the purchase of vehicles. For the avoidance of doubt, purchase of new vehicles shall be restricted to locally assembled vehicles;

“Only essential official foreign travel across government including SOEs shall be
allowed. No official foreign travel shall be allowed for board members.”

The Finance Minister added “Accordingly, all government institutions should submit a travel plan for the year 2023 by mid-December of all expected travels to the Chief of Staff;  As far as possible, meetings and workshops should be done within the official environment or government facilities; Government sponsored external training and Staff Development activities at the Office of the President, Ministries and SOEs must be put on hold for the 2023 financial year; Reduction of expenditure on appointments including salary freezes together with suspension of certain allowances like housing, utilities and clothing, etc.;

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“A freeze on new tax waivers for foreign companies and review of tax exemptions for free zone, mining, oil and gas companies; A hiring freeze for civil and public servants, No new government agencies shall be established in 2023; There shall be no hampers for 2022;  There shall be no printing of diaries, notepads, calendars and other promotional, merchandise by MDAs, MMDAs and SOEs for 2024;  All non-critical project must be suspended for 2023 Financial year.”

By Laud Nartey|3news.com|Ghana