Minister of Finance, Ken Ofori-Atta, will today, Monday, July 29, 2019 seek Parliament’s approval to spend additional revenue realised.
This will be in addition to the Mid-Year Review that the minister is required to present to Parliament under the Public Financial Management Act.
Disclosing this to journalists in Accra, Deputy Minister of Finance, Kwaku Kwarteng, assured that the supplementary budget would not result in the budget deficit being compromised or open the “floodgates” and spend outside what has been earmarked in the 2019 budget.
He said government would use this additional revenue that has come in to finance some crucial initiatives in some sectors of the economy.
There are fears that seeking approval for additional expenditure will result in the budget deficit getting out of hand.
But the deputy minister argued that the government had learnt its lessons and would not go about spending in any way that would trouble the economy.
“We are seeking approval to spend in very important sectors that would rather put the economy on a strong footing” and would not, in any way, affect or impact negatively on the budget deficit.”
…You saw 2012 over expenditure and its impact on the economy and how today we are still feeling the impact,” he recounted.
He noted further that the government would not do anything that would hurt the economy for the sake of elections.
Mr Kwarteng explained the additional spending was very strategic and would not in any way be targeted at spending to win next year’s elections.
“There is no need for us to spend out of budget because of elections because we don’t want to go back to what happened in 2012,” he said.
The deputy finance minister also disclosed that there would indeed be some cuts in expenditure or what can be described as “re-alignment” expenditure or moving funds to some very important sectors.
He added that “we may also see some movement in allocations that are aimed at promoting growth and creating jobs as outlined in the 2019 Budget.”
“This is not necessarily to say that we just want to manage the deficit but rather aimed at achieving some strategic objective of the government.”
“It’s our commitment to live within our means as government,” he said.
He also revealed that the Mid-Year Review and Supplementary Budget would help deal with the expensive power contracts that were putting a lot of pressure on the government’s finances.
The Governor of the Bank of Ghana, Dr Ernest Addison, recently said that paying these contracts which were “structured in dollars” was putting a lot of pressure on the Bank of Ghana’s reserves.
But, Mr Kwarteng maintained that the finance minister would come up with some policy measures to help contain this challenge.
He added that there were some legacy issues that Mr Ofori-Atta would want to take some tough measures to correct.
“As a government, we are putting in place measures to deal with some of these things and we are committed to solving and never again would we procure stuff we don’t need,” he said.
He, however, noted that there would be some interventions in the sector as well.
The Public Financial Management Act actually requires the finance minister to appear before Parliament by July 31, to update the House on how the economy has performed.
The presentation would afford the minister the opportunity to brief the House on how the economy has fared over the last six months and tell Parliament what should be expected for the next half of the year.
It would also offer the minister the chance to review some of the macro-economic targets that were outlined in the 2019 budget.
Story: Franklin ASARE-DONKOH
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