MINORITY in Parliament has given government two conditions to fulfill before Finance Minister, Ken Ofori Atta, appears before the House tomorrow to present the 2018 Budget.
According to them, in the 2017 original and Mid-Year review budgets, the finance minister made two major “back-pass” changes to Ghana’s fiscal regime which need to be corrected.
According to the minority, the first was the addition of “pipeline” expenditures that the erstwhile National Democratic Congress (NDC) administration compiled, under the Ghana Integrated Financial Management Information System (GIFMIS) reforms to shift to accrual accounting to the deficit.
This, the minority expects the minister of finance to continue the process and add the equivalent amount to the Appropriation Act.
Addressing a breakfast meeting with stakeholders on 2018 budget in Accra yesterday, Minority spokesperson on Finance, Mr Cassiel Ato Forson, said the second condition they would want government, through the finance ministry, to meet was that the minister should include the full estimates for the December 2017 debt service commitments in the Appropriation for 2017 and not revert to the Financial Administration Regulations (FAR) basis with appropriate amendments in the Finance Bill.
Mr Forson explained that in the Mid-year Review, the Governor (of BoG) clearly reopened the books to allow interest paid in January 2017 to be given another “backpass” to December 2016, in violation of the “cut-off” rules under the FAR which he noted was still in force, long after passage of the Public Finance Management Act (PFMA).
He predicted that there will be severe austerity equivalent to that of 1983 in Ghana next year because of government’s poor management of the economy over the last 11 months.
He maintained that the government has failed in delivering on the many promises it made during the 2016 election.
Mr Forson cited the reduction in taxes, which was promised by then candidate Akufo-Addo as one of the promises yet to see the light of day.
Rather than reducing taxes on importation, Mr Forson said the three per cent VAT flat rate scheme introduced by the government has led to importers now having to pay 20 per cent tax on their imports.
“This vindicates the position as Minority when the three per cent rate was introduced, but which unfortunately was ignored by the managers of the Ghanaian economy,” he said.
According to him, importers were also complaining about the astronomical increase in duty payments at the country’s ports since the government took over.
Mr Forson said it was important for government to use the opportunity during the budget presentation to address these concerns as failure to do so will worsen the business climate, especially at the time that Ghana has slipped 12 places on the World Bank’s Ease of doing business report.
“The deterioration is most unfortunate because around the same time last year under the NDC government, Ghana moved up 13 places on the same index and was adjudged the best place to do business in West Africa ahead of Nigeria and Cote d’Ivoire,” Mr Forson reiterated.
On the country’s debt, he wondered why the vice president and finance minister were yet to render an apology to Ghanaians for promising not to borrow but seem to be doing worse than the previous administration.
According to him, the country’s debt has ballooned alarmingly within the first 11 months of the Akufo-Addo-led administration, a situation which is surprising, especially when they touted their abilities to prevent this from happening.
Story: Franklin Asare-Donkoh