In May 2022, the current administration implemented E-Fee, which imposed a 1.5% levy on electronic transfers.
The purpose of the tax was to “improve domestic tax mobilization, increase the tax base, and provide everyone a chance to contribute to national development.”
The levy has however not generated the expected results as some who are still against it find ways of dodging its payment.
Revision in budget
Subsequently, the government in its 2023 budget statement disclosed the rate has been revised again from 1.5% to 1%.
This, according to the government, will allow more Ghanaians to use the service.
“Review the E-Levy Act and more specifically, reduce the headline rate from 1.5% to 1% of the transaction value as well as removal of the daily threshold,” Finance Minister, Ken Ofori-Atta said.
“Government should delete it (E-Levy). When something is conceptually wrong and it doesn’t meet certain basic principles of taxation, people have issues with it; even if it’s 0.1% . . . CSOs, Private sector said all that they could say about e-levy but sometimes it is as though somebody wants to do it to demonstrate where power lies,” he intimated.
He further stated that when your policy announcement aligns with the expectation of the market, they pick on it and confidence is generated.
“Taxation is not a hammer where you treat everybody else in the market as a nail . . . you cannot tax your way out of poverty; it’s never done anywhere . . . ” he added.
A recent outburst by outspoken New Patriotic Party(NPP) Member of the Parliament(MP) for Assin Central Constituency Kennedy Ohene Agyapong has lend some credence to assertions that Vice President Dr Mahamudu Bawumia’s role in management of the economy has been thwarted by Finance Minister Ken Ofori-Atta.
Dr. Bawumia has in recent times been accused of failing to demonstrate his economic prowess as Head of the Economic Management Team following the bad performance of the cedi against the dollar among other economic challenges.
However, the onsets of events and significant instances have raised concerns over the efforts of the Vice President in finding solutions to the current economic situation.
It has strongly been asserted that Finance Minister Ken Ofori-Atta is effectively obstructing the Vice President on matters that bother on key economic decisions and actions.
Speaking to party members in Bolgatanga as part of his campaign to be elected flagbearer of the NPP, Kennedy Agyapong lamented the loss of some $12 million as a result of the depreciation of the Ghanaian currency.
“From March this year to August this year, through exchange rate, I have lost $12 million. So today I don’t even count it,” he said to delegates.
The maverick MP stated that he would not have bullied by a Finance Minister if he were in the position of Dr Mahamudu Bawumia.
“If I’m a vice president, how can a finance minister bully me?” He questioned.
This recent outburst has been described by political watchers as grapevine information that points to a worrying situation where it is believed that Ken Ofori Atta as Finance Minister is given priority over the Vice President in decision economic decisions making.
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He claims that the TUC is unsure if this is one of the requirements that the International Monetary Fund (IMF) has set for Ghana’s economic recovery program.
Speaking on Accra-based TV3, Dr Yaw Baah explained, “we still don’t have the details of the IMF conditionality but you will not be wrong if you think this is part of IMF conditions. Since 1965 when Ghana Government started going to IMF, the employment freeze has always been part, of the last one that ended, employment freeze was one but in that case, it was net.
“Net meant that if somebody retires you can replace the person. So, the net freeze is what we need. But this one, we don’t know the details, whether it is the net freeze or total freeze.
“If it is a net freeze then it is like the previous one but if it is a total freeze, it is another ball game altogether. There are 644,000 people on the single spine. Let us assume without admitting that about 5 per cent of them retire yearly.
“If only five percent retire every year, we are talking now about over 30,000 people retiring and if the 30,000 people retire and they don’t replace them it will affect service delivery. If you reduce numbers by over 30,000 and they have not been replaced then your effectiveness in service delivery will be affected.”
According to him, the government will not set up new government agencies in 2023.
The minister while presenting the 2023 budget in Parliament on Thursday, November 24, noted that as the first step toward expenditure rationalisation, the 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.”
Ofori-Atta 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.;
“A freeze on new tax waivers for foreign companies and review of tax exemptions for the 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.”
Finance Minister, Ken Ofori-Atta, has revealed that the country’s home-based carrier, GhanaAirlines, will commence operations in 2023.
While presenting the 2023 budget on November 24, 2022, Mr Ofori-Atta stated that after selecting a strategic partner for the home- based carrier, the government has engaged with the requisite shareholder to smoothly execute the task.
“Mr. Speaker, Shareholders and Partnership Agreements were signed with the selected strategic partner for the home-based carrier, which will be known as GhanaAirlines. The airline is expected to be operationalised in 2023,” he added.
Earlier this year, a report by the country’s regulatory agency for air transportation, Aviation Ghana, indicated that the government would choose its preferred partner out of four airlines.
Ashanti Airlines, JNH Group, Ethiopian Airlines, and EgyptAir were the four major proposals being considered.
However, according to reports, Ashanti Airlines has been chosen as the government’s preferred partner for its new domestic carrier.
The Ashanti Airlines is owned by business moguls, Osei Kwame Despite and his partner, Dr. Ernest Ofori-Sarpong.
Currently, the airline has an Air Carrier Licence (ACL) and is working to secure the acquisition of its air operator certificate (AOC), which enables an operator
to conduct specialised commercial air transport operations.
Ghana has not had a national airline operating international flights since the closure of Ghana Airways in 2004 and Ghana International Airlines in 2010.
Efforts to re-establish a national carrier faced a hurdle despite the signing of many Memorandums of Understanding (MoU) with Ethiopian Airlines and EgyptAir.
As a result, the previous Aviation Ministry, which is now administered by the Ministry of Transport, established a new committee to review all proposals.
GhanaAirlines then GhanaAirways is the national carrier of the Republic of Ghana. The airline has its primary hub at
Kotoka International Airport, in Accra.
It was established in 1958 by the government of Ghana.
John Asiedu Nketia, the general secretary of the NDC, said: “I am not saying perpetually electronic transactions should not be charged in the future…but presently, in such difficult times, it is a mark of insensitivity to apply this tax.
NDC’s Johnson Asiedu Nketia says the introduction of the electronic levy (E-Levy) on mobile money (MoMo) and other digital transactions by the government in the 2022 budget is absolutely “needless”; for now.
He said the recent hardship on Ghanaians with the E-levy introduction will worsen the situation after the government failed to fulfill its heaven-on-earth promises.
To him, perhaps in the future when the economy is stable, the E-levy can be reintroduced.
“E-levy is not needed now, that is my argument. I am not saying perpetually electronic transactions should not be taxed in future….but currently, in such challenging times, it is a mark of insensitivity to impose this tax,” NDC’s General Secretary, John Asiedu Nketia said in an interview with NEAT FM.
E-Levy To Widen Tax Net
Finance Minister Ken Ofori-Atta, last week, announced that the government intends to introduce an electronic transaction levy (e-levy) in the 2022 budget.
He said this was to “widen the tax net and rope in the informal sector”.
Reservations About E-Levy
But several Ghanaians have expressed concern over the proposal.
They said the introduction of the levy in the 2022 Budget would compound the high cost of living in the country.
E-Levy Details
The proposed levy, which will come into effect on 1 February 2022, is a charge of 1.75% of the value of electronic transactions.
It covers mobile money payments, bank transfers, merchant payments, and inward remittances. The originator of the transactions will bear the charge except for inward remittances, which will be borne by the recipient. There is an exemption for transactions up to GH¢100 ($16) per day.
According to the finance minister, the total digital transactions for 2020 were estimated to be over GH¢500 billion (about $81 billion) compared to GH¢78 billion ($12.5 billion) in 2016. The huge growth in just five years.
Difficult Times Currently
However, the move has been criticized by many people, with some saying levies were taking all their earnings and making the cost of living very high.
The NDC, together with some opposition parties, appear to be in that bracket.
The Ghana National Chamber of Commerce and Industry (GNCCI) has described the government’s decision to increase Value Added Tax (VAT) by 2.5% in the 2023 Budget as insensitive.
“For me, it was insensitive for the VAT to have been increased in these times,” the chief executive of GNCCI, Mark Badu Aboagye, told sit-in host of The Asaase Breakfast Show Benjamin Offei-Addo on Monday (28 November).
“In our submission to the Finance Minister before the 2023 budget was read, we made it clear that an increase in any tax will be suicidal in respect to the current state of affairs,” he added.
Increment
Value added tax (VAT) is expected to increase by 2.5 percentage points, the Minister for Finance, Ken Ofori-Atta, has announced last week.
The standard rate of VAT is 12.5%, except for supplies for a wholesaler or retailer of goods, which are taxed at a total flat rate of 3%.
Ofori-Atta said the proposal to increase the rate forms part of the government’s seven-point agenda to revitalise Ghana’s economy.
Presenting the 2023 Budget Statement in Parliament on Thursday (24 November 2022), the minister said that the increase in the VAT rate by 2.5 percentage points is “to directly support our roads and digitalisation agenda”.
He also announced that the government will undertake major structural reforms in the public sector.
Ofori-Atta said the government is determined to change Ghana’s fortunes and he admitted that the country has been going through difficulty.
“The government is determined to change the negative narrative and rebuild for a better future,” the minister said.
The minority in parliament has raised concerns over seeming failure of the Finance Minister, Ken Ofori-Atta to make an appearance for the 2023 budget debate.
At the time the Speaker gave the guidelines for the commencement of the debate, the Deputy Minority Whip, Ibrahim Ahmed said there was a need for him to be present in the chamber as he needs to take note of their input.
“Mr Speaker, conspicuously missing on the floor is the mover of the motion and it Is not for nothing that the constitution says the finance minister can lay the budget on the floor on behalf of the president. So, you can’t just move the motion and remain there. It is appropriate that the minister must be here, Mr Speaker if he is not ready to do the job, he should let the house know. He must be here to hear our input.”
Ranking Member of the Finance Committee, Ato Forson said this is becoming quite characteristic of the finance minister. He therefore urged that the house should not debate on the budget until their input is considered by the finance minister.
Speaking on the matter, the majority leader said the constitution does not provide any where that the economic policy and the budget statement should be submitted to this house by the Minister of Finance.
Osei Kyei-Mensah-Bonsu also said that the president can choose any minister to lay the budget before the house and the minister is not obligated to speak to it.
He however stated that the finance minister had given prior notice that he would be absent from the country but indicated the availability of the two-deputy ministers to take note of suggestions.
In order to restore macroeconomic stability and other issues, Ghana is now negotiating with the International Monetary Fund for an economic support program.
As negotiations draw to a close, Speaker Bagbin stated that the government must do well to make sure that public support its commitment to addressing the present economic issues.
Addressing journalists in Ho-Volta region over the weekend, Alban Bagbin called on the Finance Ministry in particular to demonstrate transparency in all its activities and dealings.
“The absence of openness and transparency can lead to suspicion and a profound sense of despair and hopelessness. It is in this regard that I call on the Minister of Finance to muster the courage to be candid, open and to speak truth to power,” he said.
“Don’t come and repeat what we have been told already, we know it. Give us policy alternatives,” Alban Bagbin added.
Meanwhile, the Finance Minister, Ken Ofori-Atta, has come under a lot of backlash and pressure from both within and outside his party, the New Patriotic Party (NPP), to either resign or be sacked by President Nana Addo Dankwa Akufo-Addo over his handling of the economy.
Ghana is however hoping to secure some US$3 billion under an Extended Credit Facility from the IMF once an agreement can be reached.
Economist Joe Jackson has stated that the government of Ghana missed an opportunity to deal with the nation’s debt and economic crisis through the 2023 budget statement and economic policy.
Reacting to the details of the budget presented to parliament by the Minister for Finance, Ken Ofori-Atta, on Thursday, November 24, 2022, Mr Jackson said in an interview with Joy News that the government failed to apply sound judgment in preparing the budget.
According to the economist, the government ignored key ministries with the capability of pursuing the nation’s economic recovery by starving them of funding while allocating significant funds to some agencies with questionable usefulness.
“I’ll be honest just this evening I got what I thought was a reliable version of the tables and I started looking through, some of the numbers just don’t make sense to me. Why is there 80billion still there for the Cathedral? Forgive me, I don’t know. Why is there a contingency vote of 1.4 billion?
“The office of government machinery, I don’t care where you came from, why is it at 1.4billion? Guess what? Ministry of Food and Agric, do you know how much we’re giving them? 1.2billion. Do you know how much we’re spending on free SHS? 2.9billion. The Council of State is receiving more money than the Food and Agric Ministry,” he said.
He noted that the government missed an opportunity on both fronts to bridge the trust gap between the citizenry and the markets in the 2023 budget.
“The point is this, we want reassurance, we want to believe that this government can even carry the rest of the country with the austerity budget it has to impose. We want to believe somebody is trying to bridge the trust gap between the government and the public. That can be done when you trim down and all of us feel that you’re taking the pain as much as we have to take the pain,” he said.
The government of Ghana is hoping to rescue the country’s challenging economy through several policies outlined in the 2023 budget.
Only a handful of Members of Parliament (MPs) on the majority side showed up in Parliament for the post-budget hearing yesterday, November 29, 2022.
When the Speaker announced the rules for the debate to begin, only 21 members of parliament were present on the majority side of the house.
Although the majority had initially posited that they would not join in the debate due to the gross mismanagement of the economy by the Finance Minister, Ken Ofori-Atta, they showed up during the budget hearing.
However, the reason for their absence is unknown. The Finance Minister on November 24, 2022, presented the 2023 Budget Statement and Economic policy.
Contained in it were measures towards “expenditure rationalisation,” which include a ban on the use of V8/V6 vehicles, limited budgetary allocation for the purchase of vehicles, a 50% slash in fuel allocations to Political Appointees and heads of MDAs, MMDAs, and SOEs, etc.
The electronic transaction levy (e-levy) rate as well as its threshold have all also been reviewed, with effect from January 2023.
The presentation is in accordance with Article 179 of the 1992 Constitution and Section 21 of the Public Financial Management Act, 2016 (Act 921).
The government is optimistic that the new measures contained in the budget will bring the economy back to life.
Before choosing, names including Akwaaba Airlines, Black Star Airlines, and Kente Airlines were suggested in an effort to choose a name that would be appropriate, reflect Ghana’s culture, and benefit the company.
But when presenting the 2023 budget to the legislature on November 24, 2022, Finance Minister Ken Ofori-Atta announced, “Mr. Speaker, Shareholders and Partnership Agreements were signed with the selected Strategic Partner for the Home-Based Carrier which would be known as “GhanaAirlines.”
“The airline is expected to be operationalised in 2023,” Ken Ofori-Atta added.
Although the finance minister did not provide further details about the potential partners and shareholders, it has been reported that Ashanti Airlines has been selected as the preferred choice to partner government for its new home-based carrier.
At the moment, Ashanti Airlines has secured its Air Carrier License (ACL) and is seeking to complete the issuance of its Air Operator Certificate (AOC) which authorizes an operator to undertake specified commercial air transport operations.
Since the collapse of Ghana Airways in 2004 and the subsequent collapse of Ghana International Airlines in 2010, Ghana has been without a national airline for international flight operations.
Despite the signing of several MoUs with Ethiopian Airlines and EgyptAir, moves to re-establish a national carrier hit a snag and this led to the establishment of a new committee to vet all proposals under the former Aviation Ministry, which is now being run by the Ministry of Transport.
The proposed 2.5 percent increase in the Value Added Tax (VAT) rate has been criticized by the Alliance for Social Equity and Public Accountability (ASEPA) as being in opposition to measures taken to fight inflation, particularly the central bank’s monetary policy interventions.
The Value Added Tax rate would increase by 2.5 percent from 12.5 percent to 15 percent, according to Ken Ofori-Atta, Minister of Finance, who made the announcement last Thursday when presenting the 2023 Budget Statement and Economic Policy on the floor of parliament.
The Executive Director of ASEPA, Thompson Mensah, stated that this will not only cause difficulties for consumers but also perhaps plunge the nation into a recession during a press conference on the 2023 budget in Accra.
“As part of the 2023 budget, government wants to increase VAT by 2.5 percent – taking the total VAT value to 21.90 percent. Inflation is currently at 40.4 percent, Producer Price Index sits at 61.7 percent. The 2.5 percent, increase in VAT will skyrocket prices even further in such a precarious situation, which will fuel inflation to unprecedented levels,” he said.
“In response to the skyrocketed inflation in 2023, the central bank will automatically increase the policy rate to curb inflation. This will worsen the cost of borrowing in 2023. People will not be able to borrow due to the high-interest costs; those who will be able to borrow risk falling into a debt trap; and nonperforming loans (NPL) sitting on the books of banks will skyrocket, leading this country into a recession.
“Every economist wonders why at this very stage of a national crisis, wherein inflation is over the roof, government’s response is to increase a consumption tax like VAT. But the contradiction is that while the central bank is working hard using monetary policy tools like the policy rate to curb inflation, the finance ministry is on the other hand fuelling inflation,” he said.
He suggested that instead of increasing VAT, which will pose more difficulties to the citizenry, government must maintain the old rate and channel its efforts to reducing the hardship.
He added that government should be circumspect about its policy decision and not retrogress efforts that are already in place to rescue the country.
“Now the Ministry of Finance’s own policy is contradicting and undermining the central bank’s monetary policy efforts,” he said.
Members of Parliament will today, November 29, 2022, begin debate on the 2023 budget statement presented by the Minister of Finance, Ken Ofori-Atta last week.
Portions of the budget have been met with opposition as industry players lament the impact it will have on their businesses and livelihood.
The government intends for the 2023 budget to focus on strategies to restore and stabilise the macroeconomy, build resilience, and promote inclusive growth and value creation.
The budget statement featured updates on Ghana’s engagement with the International Monetary Fund for a $3 billion programme, the macro-fiscal performance of the economy; the YouStart initiative under the Ghana CARES Programme; climate action strategies; fiscal measures and debt management strategies to ensure fiscal and debt sustainability and promote growth.
Among the new policies proposed in the budget, which are likely to be implemented under an IMF programme, will be a freeze on public sector employment and new tax measures as the government moves to cut down expenditure and boost revenue.
The freeze on employment has already courted criticism from the Minority in Parliament and the Trade Union Congress.
Among the notable proposals, the Electronic Transfer Levy headline rate is to be reduced to 1 percent, Value Added Tax will be increased from 12.5 percent to 15 percent, the benchmark discount policy is to be fully phased out in 2023 and an additional income tax bracket of 35 percent is to be introduced.
Ken Ofori-Atta, Minister of Finance, disclosed in the 2023 budget statement that Ghana’s public debt has increased by GH₵93 billion ($6.53 billion at the current rate) due to the depreciation of the Ghanaian cedi since the beginning of 2022.
According to him, the said amount is twice more than the anticipated US$3 billion bailout Ghana is seeking from the International Monetary Fund (IMF).
In the 2023 budget statement, he said the cedi has depreciated by 53.8% and 54.2% against the dollar as of October 2022 and November 2022.
The depreciation is due to the fact that the country cannot access the International Capital Market due to the continuous credit rating downgrades. The tightening of domestic financing conditions and the increasing cost of borrowing has also contributed to further depreciation.
Ofori-Atta added that there has been a high demand for forex to finance the import bill, including the import of crude, and the financing of electricity has worsened the performance of the cedi and led to the high depreciation.
“Ghana’s import bill, the budget stated, exceeds US$10 billion annually. Considering the low foreign earnings, it has been difficult to meet the import requirements including crude oil and petroleum products of about US$400m (GH₵4.80 billion) a month. The Ministry of Finance also requires about US$1.0 billion per year to finance the lights in homes and workplaces,” he said.
“For us at the Ministry of Finance, the depreciation of the cedi seriously affects our ability to effectively manage our debt. Indeed, our stock of debt has increased by GH¢93 billion this year alone due to the depreciation of the cedi at the beginning of 2022,” the Finance Minister added.
Ghana is seeking a three-year Extended Credit Facility (ECF) programme of $3bn at the International Monetary Fund. This means that this potential bailout cannot even finance the debt accumulated as a result of the depreciation of the Ghanaian cedi.
The Secretary General of the Trades Union Congress (TUC) Dr Yaw Baah has said that net freeze on employment into the public sector is better than total embargo.
He explained that net freeze is when retirees are replaced when they exit. This, he said, allows productivity and efficiency to go on.
Total freeze on the other hand, he added, is when the retirees are not replaced neither are new employees recruited. That will be detrimental to productivity hence, they do not want that to happen.
Speaking in an interview with TV3’s Daniel Opoku on the sidelines of a post budget analyses forum held by the TUC in Accra on Monday November 28, Dr Yaw Baah said “we still don’t have the details of the IMF conditionality but you will not be wrong if you think this is part of IMF conditions. Since 1965 when Ghana Government started going to IMF, employment freeze has always been part, in the last one that ended, employment freeze was one but in that case it was net.
“Net meant that if somebody retires you can replace the person. So the net freeze is what we need. But this one, we don’t know the details, whether it is the net freeze or total freeze.
“If it is a net freeze then it is like the previous one but if it is a total freeze it is another ball game all together. There are 644,000 people on the single spine. Let us assume without admitting that about 5 per cent of them retire yearly.
“If only five percent retire every year, we are talking now about over 30,000 people retiring and if the 30,000 people retire and they don’t replace them it will affect service delivery. If you reduce numbers by over 30,000 and they are not replaced then your effectiveness in service delivery will be affected.”
The Minister of Finance Ken Ofori-Atta announced in the 2023 budget 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.;
“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.”
He claimed that he was astounded by the minister’s ability to find his way and read the budget.
“The fact that Ken Ofori-Atta was reading the budget caught me completely off guard.
I had previously claimed that Ken Ofori-ability Atta’s to understand the budget would rank among the seven wonders of the world.
It is very astounding how he has been able to negotiate his way through, in any jurisdiction, he shouldn’t be the one reading the budget,” he is quoted as saying by 3news.com.
The Minister of Finance, Ken Ofori-Atta, was in parliament to fulfill his constitutional mandate by presenting the government budget to the House.
The presentation was in accordance with Article 179 of the 1992 Constitution and section 21 of the Public Financial Management Act, 2016 (Act 921).
Ken Ofori-Atta has also come under a lot of backlash and pressure from both within and outside his party, the New Patriotic Party (NPP), to either resign or be sacked by President Nana Addo Dankwa Akufo-Addo.
But the President had asked members of the NPP to allow the Minister to present the 2023 budget and also conclude negotiations with the International Monetary Fund.
Government bans the use of V8, V6 vehicles except for cross-country travel.
The 2023 budget statement, which was given by the minister of finance, Ken Ofori-Atta, will be the subject of debate among members of parliament (MPs) starting on Tuesday, November 29, 2022.
The introduction of a 2.5% VAT and plans to examine the 1.5% electronic charge have already sparked public debates about certain budgetary provisions.
The new tax law has been challenged by businesses, and the reduction of the transaction threshold has drawn criticism from mobile money users.
The Deputy Majority Leader, describing how the debate would proceed, indicated that “on November 29, 2022, it’s expected that the debate will focus on Finance, Agriculture, Trade and Industry, and Wednesday Communications, Energy, Roads, Works, Housing, Sanitation and Environment and Thursday, December 1, it will be Health, Youth and Sports, Education, Tourism, Culture and Chieftaincy.”
The Finance Minister, Ken Ofori- Atta on November 24, 2022, presented the 2023 budget statement in Parliament.
During his presentation, Mr Ofori-Atta announced some measures to reduce public expenditure in 2023
Among other things, the government has banned public officials from using V8s/V6s for cross-country travel.
Ken Ofori-Atta also announced a hiring freeze for civil and public servants and suspended non-critical projects.
Despite measures put in place by the Akufo-Addo-led government to salvage the dwindling economy, Ghana’s economic growth is expected to take a further downturn.
Presenting the 2023 budget on the floor of Parliament, the Finance Minister, Ken Ofori-Atta, disclosed that the country’s economic growth is expected to slow down by 2.8% in 2023.
A slower growth rate will likely expose Ghana’s vulnerable economy to a further decline.
The country is currently experiencing inflationary pressures and an exchange rate depreciation, resulting in a higher cost of living.
On top of this economic meltdown, Ghana’s Finance Minister revealed that the country is at high risk of debt distress.
Addressing lawmakers during his presentation dubbed “NKABOM” to wit, unity, Ken Ofori-Atta stated that “the current debt sustainability analysis conducted reveals that Ghana is now considered to be at high risk of debt distress.”
He, however, added that the government was determined to resolve the daunting economic challenges facing the nation.
Mr Ofori-Atta intimated that his government will soon reach an agreement with the International Monetary Fund (IMF) for a suitable relief package.
He said, “in the immediate term, we will work towards securing an agreement with the International Monetary Fund, execute the debt exchange programme, improve the management of foreign exchange, and support our local productive capacity for food security.”
Meanwhile, the government has announced some measures to reduce public expenditure in 2023
Among other things, the government has banned public officials from using V8s/V6s for cross-country travel.
Ken Ofori-Atta also announced a hiring freeze for civil and public servants and suspended non-critical projects.
He, thus, called for the support of the public, stating that “this is the time to rebuild, not to destroy and tear down. Let us work together for our collective benefit.”
He said that Ghana’s spiraling debt levels were due to the Finance Minister, Ken Ofori.
“This finance minister is just interested in borrowing money on the bond market since it benefits him indirectly, you know what they are interested in.
In terms of borrowing all these Eurobonds, his company is at the bottom.
He has borrowed $9 billion from the market over the course of four years, and Data Bank profits from each bond he issues through sales of real estate and other assets, according to Mahama.
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NDC flagbearer, John Dramani Mahama, has taken a swipe once again at the Finance Minister, Ken Ofori-Atta over what he describes as unnecessary borrowing.
The Finance Minister, he said, is only interested in borrowing money from the bond market because he benefits from it indirectly. He asserted that Ken Ofori-Atta’s Data Bank has been used as the special purpose vehicle for any governmental contract.
Mahama said Ken Ofori-Atta has borrowed an amount of $9 billion in 4 years.
In an interview with veteran journalist, Kwesi Pratt Jnr in Tamale Saturday, the NDC flagbearer said “This finance minister, you know what they are interested in, all he’s interested in is going on the bond market and borrowing because he benefits from it indirectly. His company is at the bottom of borrowing all these Eurobonds. He’s borrowed 9 billion dollars from the market in 4 years and for every bond he floats, Data Bank makes money out of it through properties and other things.”
Comparing events as they happened under his tenure to current trends under the Akufo-Addo government, Mahama claimed the NDC did not borrow a penny to finance the 2016 budget.
“By the time we left office in 2016, we financed the budget from our own revenues. We didn’t borrow GHC1 from the Central Bank. The first time in Ghana’s history. Everything! we financed the budget within 2016, we did zero central bank financing,” he said.
The minority in parliament has urged the government to seriously consider further lowering the e-levy rate to 0.5 percent and establishing a daily tax-free threshold of 300 cedis in order to gain their support.
Minority leader, Haruna Iddrisu, who made this appeal, noted that the minority caucus will vigorously advocate for the reduction in parliament.
Presenting the 2023 budget on Thursday, November 24, 2022, Finance Minister Ken Ofori-Atta announced that the government was reducing the e-levy rate
from 1.5 percent to 1 percent and removing the 100 cedis tax-free daily threshold.
That means any amount transferred is taxable. The Minority Leader, Haruna Iddrisu during the inaugural ceremony of the post Budget in Ho stated that such a review will worsen the hardship on the average Ghanaian.
Thus, he urged the government to reconsider the newly proposed rate and reduce it to a 0.5%“We will subject it to a further critical and thorough discussions
as a caucus but without going into the scenarios, as you look at your scenarios, consider for say of 0.5% at a threshold of ¢300 as compared to what you have admitted of 1%”.
Mr Haruna noted that his party had not yet made up its mind regarding the suggested increase of the VAT rate by 2.5 percent.
However, he cautioned that this can have a negative impact on businesses.
But according to Finance Minister Ken Ofori-Atta, the government’s inability to access the global market has made the measures crucial for raising domestic revenue.
He believes that these taxation policies are essential for saving Ghana’s economy from total collapse.
The Finance Minister has called on the MPs to rally their support for the measures suggested, so they can be passed on time. “It has become more urgent to
mobilise some domestic revenue as our access to the international market has been largely closed and our debt levels increased”,
Finance Minister, Ken Ofori- Atta had said on Thursday, November 24, during the 2023 budget presentation. The electronic transfer levy, popularly known as e-levy, was introduced in May 2022.
Ghana’s e-levy is a 1.5 per cent tax on the transfer amount of electronic transactions. The objective is to improve tax revenues by tapping into fast-growing digital financial services.
Speaker of Parliament, Alban Bagbin believes that Finance Minister Ken Ofori-Atta will take a cue from the ordeal suffered over the past few weeks.
Between a censure motion from the Minority and a decision by the Majority to kick him out of office, Mr Bagbin is sure that Ken Ofori-Atta has picked lessons for the future.
Ghana is currently at the doors of the International Monetary Fund (IMF) for a possible $3 billion bailout amidst intensifying hardship, skyrocketing fuel prices, a rising cost of living and a depreciating cedi.
Ghanaians are reeling under this condition and have been calling for a pragmatic solution.
The Minority MPs insist that Ken Ofori-Atta, in this regard, has lost his grip on the country’s economy and must be axed.
Beyond that, majority of NPP MPs in the House are pushing for his removal, triggering crunch-time interventions from the party caucus and President Akufo-Addo.
With all these developments, the Speaker says Ken Ofori-Atta has learnt in a hard and unprecedented way.
“As he sits here, he has learned a bitter lesson. It is uncommon to come across members of your own party rise up in Parliament against your own minister. It’s uncommon,” he said on Sunday .
Members of Parliament will this week debate the 2023 budget statement presented last week and the Speaker of Parliament has a warning for government.
He cautioned government against using sheer bravado to push through their revenue measures, instead he thinks dialogue with the opposition may yield a common ground.
The Speaker says anything other than this will lead to acrimony and conflicts which will not augur well for the economy.
Meanwhile, the House awaits the report from the committee that probed the motion to subject Mr Ofori-Atta to a vote of censure.
The Economic and Organised Crime Office (EOCO) has recovered GH¢27.55 million as at September 2022, according to Finance Minister Ken Ofori-Atta.
The minister made this known after he presented the 2023 budget in Parliament on Thursday, November 24.
According to him, the 27.55 million out of which “GH¢11.14 million [is] direct recovery into the Consolidated Fund and GH¢16.41 million [is] indirect recovery to other institutions,” was recovered from the proceeds of crime in the country.
Mr Ofori-Atta further mentioned that the aforementioned amount recovered by EOCO this year is twice the amount retrieved between 2019 and 2021.
EOCO in 2019 recovered GH¢4,301,262.79, and in 2020 and 2021, GH¢4,365,129.69 and GH¢6,142,984.01 respectively.
Lauding the organisation for the good work done, the Finance Minister mentioned that EOCO has so far investigated about 490 cases.
Out of the 490 cases, 19 are being prosecuted at various courts in the country.
He also pointed out that “the Office secured one court conviction, and five cases were dismissed. In addition, the Office carried out 55 sensitisation programmes on cybercrimes, 55 on gaming, and three outreach programmes on human trafficking and irregularmigration.”
Mr Ofori Atta is anticipating that EOCO, in 2023, will investigate 450 cases, out of which over 50 cases will be prosecuted.
In the same year, he says, the organisation plans to carry out 60 sensitisation programmes on cybercrimes, 55 on gaming, and five outreach programmes.
Functions of EOCO The Economic and Organised Crime Office (EOCO) was established in 2010 to lead Ghana’s efforts against the increasing challenges of economic and organised crime.
It is responsible for preventing, detecting, and investigating crimes such as money laundering, human trafficking, illegal cyber activity, and tax fraud.
With the authority of the Attorney General, EOCO is mandated to prosecute these offences and confiscate or recover the proceeds of crime.
Residents in the Shama District of Western Region have bemoaned the lack of effective measures in the budget statement to address the socio-economic hardships facing Ghanaians.
According to them, the 2.5 percent Value Added Tax (VAT) announced in the 2023 budget would further aggravate the sufferings of Ghanaians.
Speaking in an interview with the Ghana News Agency (GNA), the people expressed their disappointment with the 2023 budget as it did not show any commitment from the government to ensure drastic reduction of petroleum prices.
Madam Atta Panyin, a petty trader and Auntie Adjoa, a shop owner at Inchaban and Shama Junction markets respectively noted that the unstable prices of petroleum products had negatively affected their businesses.
They explained that manufacturers and producers had no choice than to increase the prices of their commodities and items due to the unrestrained increase of fuel prices.
They noted that the unfortunate situation had made some of the traders who contracted loans to finance their businesses unable to service them while other businesses had collapsed, affecting the livelihood of many people.
Mr. Esuah, Coufie, a retired civil servant, took a swipe at the government for not detailing concrete measures in the budget to help tackle the unemployment issues.
He said a freeze on employment in the public sector would contribute to a high unemployment rate in the country.
Also, some drivers who ply Takoradi – Cape-Coast-Accra Road said there was nothing new in the budget to boost the confidence of the general public.
The drivers appealed to the government to consider measures to help reduce petroleum prices to help save their businesses from collapse.
A renowned labour consultant has accused the finance minister of creating needless fear and panic among the teeming unemployed with his freeze on all government employment as contained in the Thursday budget statement to the Legislature
Mr Antwi Boasiako Sekyere said what the minister said was not apt.
He explained that there cannot be a freeze on employment when every year people retire and need to be replaced.
“Every year, scores of people are needed to fill vacant positions in the teaching sector as well as the nursing sector and the security sector,” he explained.
The former Deputy Minister for Manpower and Labour Relations in the National Democratic Congress (NDC) argued against the minister’s claims while speaking in an interview on the Accra 100.5 FM’s midday news on Friday, November 25, 2022.
He said what will be at play with Ghana getting a deal from the International Monetary Fund (IMF) is the employment in some of the State-Owned Enterprises (SOEs), adding that some of these SOEs have as many as three deputies who draw salaries and allowances from the consolidated fund.
He said the IMF will not allow this to happen as part of the austerity measures when a deal is reached with the fund.
“Under NDC, we went for an IMF deal but recruited to fill positions but the New Patriotic Party in opposition accused the government of not employing because of the IMF deal when they know that was not the case,” he said.
To reduce public expenditure, the government has put a freeze on recruitment in the public sector beginning next year, 2023.
This is part of some 13 measures announced by the Finance Minister Ken Ofori-Atta in the 2023 budget statement presented in Parliament on Thursday, 24 November 2022.
These measures according to the finance minister are cabinet directives.
The 13 measures are listed below:
1. All MDAs, MMDAs and 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 systems, and fuel depots. Accordingly, 50% of the previous year’s (2022) budget allocation for fuel shall be earmarked for official business pertaining to MDAs, MMDAs and SOES;
2. 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;
3. Limited budgetary allocation for the purchase of vehicles. For the avoidance of doubt, purchase of new vehicles shall be restricted to locally assembled vehicles;
4. Only essential official foreign travel across government including SOEs shall be allowed. No official foreign travel shall be allowed for board members. 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;
5. As far as possible, meetings and workshops should be done within the official environment or government facilities;
6. 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;
7. Reduction of expenditure on appointments including salary freezes together with suspension of certain allowances like housing, utilities and clothing, etc.;
8. A freeze on new tax waivers for foreign companies and review of tax exemptions for free zone, mining, oil and gas companies;
9. A hiring freeze for civil and public servants
10. No new government agencies shall be established in 2023;
11. There shall be no hampers for 2022;
12. There shall be no printing of diaries, notepads, calendars and other promotional merchandise by MDAs, MMDAs and SOEs for 2024;
13. All non-critical projects must be suspended for 2023 Financi
The review of the Electronic Transaction Levy (E-Levy) was received with disappointment by some Cape Coast residents in the Central Region, and they renewed their requests for the government to rescind the policy entirely.
They bemoaned that the already shaky economy would not be improved by the proposed revision of the revenue collection policy.
The E-Levy was implemented by the government in 2022 as part of efforts to boost revenue. It is a 1.5 percent deduction from a set list of electronic transactions with a daily threshold of 100 Cedis.
In view of this, Finance Minister Ken Ofori-Atta, while presenting the 2023 budget in Parliament on Thursday, November 24, announced a reduction in the rate of the policy from 1.5 percent to one percent without the threshold.
The review, among other fiscal and austerity measures, is targeted at salvaging the country’s southbound economy.
This means that subject to approval by Parliament, Ghanaians will pay E-Levy of one percent on all affected forms of transactions despite the amount involved.
Speaking to some citizens on the development, they expressed disappointment at the policy and questioned the sensitivity of government to their plights.
Madam Abigail Mensah, a trader at the Kotokuraba Market, said she did not want the policy in any form and that it must be scrapped off immediately.
“Already, we can barely afford to feed ourselves and our families and the best government can do is to push us off the cliff with taxes?” she queried with a visibly livid expression.
Comparing the E-levy in its current form to the proposed review, Madam Lordina Ackah, also a trader, preferred it to be left untouched because the percentage removed was an insult.
In an interesting twist, another market woman, Madam Gertrude Dadzie who also called for the levy to be scrapped, suggesting that the government found better means of easing the plight of Ghanaians.
A taxi driver, Mr Francis Awotwe, called on the government to cancel the E-Levy and bring back the tollbooths.
Lamenting the hardship in the economy, he said he made nothing from his taxi business because every money he made went into buying fuel.
“I buy a gallon of petrol for more than 80 Cedis and I do not make up to 300 Cedis in a day. How much do I give my car owner and how much do I take home to cater for my family?” he retorted.
“In spite of this, the government still wants to take away the small money I send to my poor old mother in the village.”
Meanwhile, some mobile money vendors have said the development would collapse their businesses even further.
Mr Nii Armah Tagoe indicated to the Ghana News Agency that his average daily profit of 80 Cedis had dropped to 20 Cedis since the introduction of the levy.
He said even though transactions conducted were not affected by E-Levy, customers’ activities had dropped significantly due to the lack of proper education on the policy.
“We have not made any profit since the E-Levy came and the trend now is that many people no more do withdrawals and deposits than money transfer.
“The review is worse, and it is going to kill us more,” he added.
Another vendor, Mr Ahmed Yussif, said he did not expect any significant effect on his business, adding that the impact, if any, would be felt after a month.
During the announcement of this year’s economic policy, the Minister of Finance, Ken Ofori Atta, declared that the budget is dubbed “Nkabom” in order to breathe some new life into the economy.
As stated in the Post-COVID-19 Programme for Economic Growth (PC-PEG), this agenda is “anchored on a seven-point agenda with the goal of restoring macroeconomic stability and driving our economic transformation.”
He talked about protecting the poor and vulnerable as the fifth measure while expanding digital and climate-responsive physical infrastructure for the implementation of structural and public sector reforms.
This he stressed will enable “us to generate substantial revenue, create needed fiscal space for the provision of essential public services and facilitate the implementation of the PC-PEG programme to revitalise and transform the economy”.
The fact that the current administration has cut the contentious Electronic Transfer Levy (E-levy), according to deputy finance minister Dr. John Kumah, shows that they are a receptive government.
The fact that the rate was lowered to 1%, he remarked, “shows that we are a listening government.”
E-levy
The Ghc100 daily threshold has been eliminated, which has resulted in the e-levy rate dropping from 1.5% to 1%, according to Finance Minister Ken Ofori Atta, who presented the 2023 budget statement.
“Review the E-Levy Act and more specifically, reduce the headline rate from 1.5% to 1% of the transaction value as well as removal of the daily threshold,” Ken Ofori-Atta said.
It may be recalled that the government introduced “this to enhance domestic tax mobilization and expand the tax base and provide an opportunity for everyone to contribute towards national development”. However, according to government the estimated money to be accrued as far as the levy is concerned, has not been reached.
John Kumah Speaks
Speaking on Joy Newsfile programme, Saturday, John Kumah who doubles as the Member of Parliament for Ejisu constituency claims: “we still have challenges because not all operators channel their system through the common platform that has been created. So a lot of compliance issues…but having reduced the rate to 1% means that we are a listening government.”
According to him, “per the data I have seen, there is some 60% growth in terms of the usage of MoMo and its impacts on the revenue we are generating under e-levy”.
Speaking to Starr Business, Courage Boti said that the government’s proposed policies necessitate a more stringent finance arrangement from the populace.
“It has always been coming and just a confirmation for me that we all in our individual capacity must tighten our finances properly. Because we will have to pay our due to the government and then the economic conditions.
“We will want to achieve some stability steadily into the market forecast, which I am a bit aligned with most of them that inflation will reduce. With all other things being equal the currency should begin to stabilize once there is a balance of payment report. There will be a growth in the debt stock as there is some adjustment along the way,” Mr. Boti explained.
“But on a personal level VAT increasing by 2.5 percent from the 12.5 percent, we are now paying about 15 percent really that is a cost to us consumers. That is something we will have to deal with in addition to all the higher pricing we are facing., Mr. Boti stated.
He added that in the situation Ghanaians find themselves their financial position will definitely increase.
In his presentation of the 2023 Budget Statement and Economic Policy to parliament, Finance Minister Ken Ofori-Atta disclosed this.
In particular, he added, “we will review the E-Levy Act and cut the headline rate from 1.5 percent to 1 percent of the transaction amount as well as remove the daily threshold.”
The move, he also said, is in response to proposals government has received for a review of the levy.
“Government has consistently indicated its intention to improve the revenue collection effort by leveraging technology to enhance tax administration, identify and register taxable persons, and improve tax compliance.
“Government has received several proposals for a review of the Electronic Transfer Levy, and is working closely with all stakeholders to evaluate the levy’s impact in order to decide on the next line of action – which will include a revision of the various exclusions.
“As a first step, however, the headline rate will be reduced to 1 percent of the transaction value alongside removal of the daily threshold,” he said.
As other means to aggressively mobilise domestic revenue, Mr. Ofori-Atta also announced “an increase in the VAT rate by 2.5 percent to directly support our roads and digitalisation agenda; and Fast-tracking implementation of the Unified Property Rate Platform programme in 2023.
Parliament, on Tuesday, March 29, 2022, passed the Electronic Levy bill. The E-levy was introduced by government in the 2022 Budget, with the objective of broadening the country’s tax base by imposing the levy on electronic transfers to enhance government’s drive for revenue mobilisation.
The International Monetary Fund (IMF), the Debt Exchange Programme through aggressive tax mobilisation, the development of local export capability, and the Social Protection Programme to offer a safety net for the underprivileged are some of these programmes.
He stated that the administration thought the action would reduce the nation’s debt to a manageable level.
He said the government was building local capacity for exports by improving agricultural produce through the creation of conducive environment for farmers to thrive.
Providing a safety net and social protection programmes for the poor were major projects to be enhanced by increasing the current beneficiaries of the Livelihood Empowerment Against Poverty (LEAP) at 320,000 to 450,000 with a corresponding increase in their GH¢45 monthly payments to Ghc95 bi-monthly, he said.
The LEAP provides cash transfers to very poor people, particularly in households with orphans or vulnerable children, the elderly, and people with extreme disabilities.
Other social protection programmes would also be reviewed to ensure efficiency, including increment in the school feeding rates for caterers, Mr Kumah said.
“Government is committed to expanding coverage to all 2,500,000 extremely poor individuals as estimated by the Ghana Living Standards Survey (GLSS 7) by 2024,” he quoted from the Budget Statement.
He said the expansion of the programme would have a long-lasting impact on the development of the human resource base of the country and improve living standards of the vulnerable.
Established in 2008, the LEAP aimed to support the poorest families in Ghana to better meet their basic needs, prioritise health, enrol children in school and improve their attendance, increase savings, work and invest more to pull themselves out of poverty.
Currently, it supports 1.5 million extremely poor Ghanaians from 344,023 households across the country while providing support for the elderly aged 65 and above, and the severely disabled.
In an interview with Don Kwabena Prah on Happy98.9 FM’s “Epa Hoa Daben” socio-political talk show, he alleged that individuals with first grade in accounting or financing will appreciate the intensity of the cedi depreciation due to demerit decisions by the Minister.
“We must be told that even a first-degree holder in accounting or financing knows better that his bad decisions brought the cedi here and not because the citizens are dumb,” he stressed.
“What disgusts me most is the Chiefs and Ministers being paid with taxpayers’ money appearing to support him, we say we do not want him and you’ve left your work there to support him,” he bemoaned.
“If we had leaders who were responsive, the president would have demoted them. You leave your work to support Ken Ofori-Atta at the expense of the country, with the country’s car, fuel and salaries. This should tell you the calibre of people we have elected, very bad appalling and insulting to the Ghanaian intelligent” he added.
Commercial farmers and small-holder farmers can purchase traditional agriculture insurance and index-based weather insurance products from GAIP.
According to Mr. Ofori-Atta, who presented the budget for 2023, qualified farmers will receive an estimated $400 million in agricultural insurance in 2023.
The presentation of the budget in parliament is in pursuance of the Public Financial Management Act, 2016 (Act 921).
The current strains on the local currency and high food costs, according to finance minister Ken Ofori-Atta, support the GhanaCARES program’s current focus on enhancing the private sector’s export and productive potential.
He said that an economic enclave project is being pursued to this end, with the goal of supporting the cultivation of up to 110,000 acres of land in the Greater Accra, Ashanti, Central, Savanna, and Oti areas.
The plan, according to Mr. Ofori-Atta, “seeks to expand our production and productivity in the rice, tomato, maize, vegetables, and poultry” sectors, which he detailed in his presentation of the 2023 budget to parliament on Thursday, November 24, 2022.
It is being led and coordinated by the Millennium Development Authority (MiDA) in collaboration with other government institutions such as the Ministry of Food and Agriculture (MoFA), Ministry of Energy, Ghana Irrigation Development Authority (GIDA), 48 Engineers Regiment of the Ghana Armed Forces (GAF) under the Ministry of Defence, the National Entrepreneurial and Innovation Programme (NEIP) and the National Service Secretariat (NSS).
Mr Ofori-Atta said “consistent with the private sector-led approach, the programme will engage interested private sector actors to expand agricultural production and processing in the Asutuare-Tsopoli economic enclave area based on a partnership framework”.
The same approach, he noted, will be adopted for the lands secured in the Ashanti, Central, Savanna and Oti regions.
In addition to the enclave project, Ofori-Atta said the GhanaCARES programme, “in 2023, will continue to offer catalytic support by working with DBG to provide funding to interested and targeted farmers; supporting MoFA to adopt and deploy the farmer registration database for the farmer input subsidy programme to enhance efficiency; supporting the Ministry of Communication and Digitalisation (MoCD) to establish a tech hub to improve knowledge in technology and innovation by the youth, in collaboration with the University of Ghana ensuring the operationalisation of the foundry under a sustainable private sector management framework.”
“Providing interest rate subsidies and direct financing, including supporting prioritised sectors in the rural economy through the ARB Apex Bank and its network of banks, as agreed under the AfDB-supported Post-COVID Skills and Productivity Enhancement Project,” he added.
“Nobody in his or her right state of mind will gloat if the country’s economy collapses,” he posited.
“We won’t be here if the minister had earlier admitted his guilt of running the economy down,” he stressed.
The finance minister last Thursday in parliament revealed that the ministry of finance has conducted a Debt Sustainability Analysis (DSA) based on Ghana’s macroeconomic outlook and analysed the country’s capacity to finance its policy objectives and service its debts.
He said: “The sustainability of our debt has been continuously affected by the negative impact of exchange rate depreciation, particularly on external debt, as well as the crystallisation of significant contingent liabilities in recent years.”
The current debt sustainability analysis conducted, Mr Ofori-Atta noted, reveals that “Ghana is now considered to be in high risk of debt distress.”
“Mr Speaker, despite the heightened debt levels, the government remains committed to ensuring that debt is brought to sustainable levels over the medium to long term,” he indicated.
To this end, Mr Ofori-Atta announced: “We will implement a debt exchange programme to address the challenges identified in the portfolio in collaboration with all relevant stakeholders including the Ghanaian public, investor community and development partners.”
Furthermore, he said the government will continue to strengthen its oversight of all SoEs, in particular, the financial and energy sectors.
Senior Research Fellow at Kumasi Technical University Dr. Smart Sarpong has urged Ghanaians, especially the youth, not to be alarmed or alarmed by the declaration of a ban on hiring civil officials beginning in January 2023.
On Thursday, November 24, the 2023 budget statement and economic policy were presented to Parliament by Ken Ofori-Atta, the finance minister.
“A ban on new tax waivers for foreign corporations and a reassessment of tax exemptions for free zone, mining, oil, and gas industries; A hiring freeze for civil and public officials,” the minister declared.
There won’t be any new government organisations created in 2023, and there won’t be any hampers in 2022.
He admonished the youth to challenge themselves to break their dependence on public employment and develop an attitude of entrepreneurship.
“People use a lot of excuses to avoid work. Let’s change the narrative around this time they say there is a freeze. It means you have to get out of laziness and get something doing. Maybe, by the time we get out from the freeze, we would have had more entrepreneurs, more self-employed people; [every danger that comes] for me, every threat should come along with an opportunity that we all must ensure we take over . . . there will always be job available for those who are ready,” he advised.
“Let the youth of this Republic become creative,” he added.
GUTA claims that this clearly violates the commitment the government made to interested parties during the budget hearings.
According to GUTA, the administration made it plain at the aforementioned discussions that the 2023 budget will not include a tax increase.
On Friday, November 25, 2022, Mr. Benjamin Yeboah, the Director of Welfare at GUTA, indicated the association’s dissatisfaction with the raise during an interview with Emmanuel Quarshie, the host of Ghana Yensom morning show on Accra 100.5 FM.
“As an association, we have some challenges with compliance with the VAT.
“And we have raised it with Ghana Revenue Authority (GRA) and we were thinking there was going to be some reduction to enable more people to comply.
“We understood that the government will look at the implementation as well as the compliance rather than increment of the tax,” he bemoaned.
The government has announced that the Value Added Tax (VAT) rate has been increased from 12.5% to 15%.
The 2.5% hike was announced by Finance Minister Ken Ofori-Atta when he presented the 2023 budget to parliament on Thursday, 24 November 2022.
According to him, the rate hike is expected to yield GH¢2.70 billion in revenue to fund road infrastructure development.
“Mr. Speaker, the demand for roads has become the cry of many communities in the country.
“Unfortunately, with the current economic difficulties and the absence of a dedicated source of funding for road construction, it is difficult to meet these demands.
“In that regard, we are proposing the implementation of new revenue measures.
“The major one is an increase in the VAT rate by 2.5 percentage points,” he told parliament.
“As stated in the Budget Speech by the Honourable Minister for Finance, Ken Ofori-Atta, the Government of Ghana is contemplating a debt operation aimed at alleviating the pressures on the national budget and restoring debt sustainability. This would also open up financing streams and provide needed balance of payment support from the Fund.
“Details of the different layers of a debt operation, including the terms of principal payments and interest on the public debt, are still being discussed, taking into account principles of debt sustainability and international best practices,” parts of the statement read.
Addressing the nation on measures being taken by the government to rescue the economy on Sunday, October 31, Akufo-Addo said: “I also want to assure all Ghanaians that no individual or institutional investor, including pension funds, in government treasury bills or instruments will lose their money, as a result of our ongoing IMF negotiations.
“There will be no “haircuts”, so I urge all of you to ignore the false rumours, just as, in the banking sector cleanup, government ensured that the 4.6 million depositors affected by the exercise did not lose their deposits.”
He cautioned, “those who make it a habit of publishing falsehoods, which result in panic in the system, I say to them that the relevant state agencies will act against such persons”.
But the Minister of Information, Kojo Oppong Nkrumah, later came out to explain Akufo-Addo’s assurances that there will be no haircut, cover only principals.
“My understanding is that no principals will be touched. No principals will have a haircut. The debt sustainability strategy is yet to be announced in full.
“When they are done with the rest of the strategy, and they come out and do a full announcement, we will have clarity on the form that the debt restructuring will take,” the information minister said.
He stated that in order to ensure compliance, this will be enforced with assistance from the Ghana Audit Service and Internal Audit Agency, and in exchange, the government will promote the manufacture of strategic substitutes.
He further added that large-scale agriculture and agribusiness interventions will be supported through the Development Bank Ghana and ADB Bank.
The move to make the country an import substitution and export-oriented one becomes necessary as the currency has been on its knees – suffering sharp depreciation partly due to high dependence on importation, which exceeds US$10billion annually.
“Ghana’s heavy dependence on imports places tremendous pressure on the cedi, creating an unfavourable balance of payments position. On average, Ghana’s import bill exceeds US$10billion annually and is accounted for by a diverse range of items including iron, steel, aluminum, sugar, rice, fish, poultry, palm oil, cement, fertiliser, pharmaceuticals, toilet-rolls, toothpicks, fruit-juices, etc.,” the minister indicated.
He added that: “Currently, the country has capacity to locally produce items which account for about 45 percent of the value of its annual imports. These include rice, fish, sugar, poultry, cement, pharmaceuticals, jute bags and computers, etc.
“To this end, government will target these products for import substitution by supporting the private sector through partnerships with existing and prospective businesses – to expand, rehabilitate and establish manufacturing plants targetted at producing these selected items.”
Also, to promote exports it will expand productive capacity in the economy’s real sector and actively encourage consumption of locally produced rice, poultry, vegetable oil, fruit-juices and ceramic tiles among others.
Domestic revenue
Indicating that the 2023 budget will focus on government’s resolve to structurally transform the economy, Ken Ofori-Atta said it has become more urgent to mobilise domestic revenue – especially since the country’s access to the international capital market is largely closed.
He said government will take the hard, unpopular but necessary decisions to build back better and emerge stronger by leveraging domestic revenue.
“We urgently need to restore debt sustainability/macro-economic stability and grow the economy,” he said, adding that measures are underway to improve revenue collection efforts by leveraging technology to enhance tax administration, identify and register taxable persons, and improve tax compliance.
According to the budget, domestic revenue for the period amounted to GH¢64.6billion (10.9 percent of GDP), falling below the target of GH¢66.5billion (11.2 percent of GDP) by 2.9 percent. The outturn however represented a year-on-year growth of 34 percent, and constituted 98.8 percent of total revenue and grants.
On Thursday, November 24, the 2023 budget statement and economic policy were presented to Parliament by Ken Ofori-Atta, the finance minister.
“A ban on new tax waivers for foreign corporations and a reassessment of tax exemptions for free zone, mining, oil, and gas industries; A hiring freeze for civil and public officials,” the minister declared.
There won’t be any new government organizations created in 2023, and there won’t be any hampers in 2022.
He admonished the youth to challenge themselves to break their dependence on public employment and develop an attitude of entrepreneurship.
“People use a lot of excuses to avoid work. Let’s change the narrative around this time they say there is a freeze. It means you have to get out of laziness and get something doing. Maybe, by the time we get out from the freeze, we would have had more entrepreneurs, more self-employed people; [every danger that comes] for me, every threat should come along with an opportunity that we all must ensure we take over . . . there will always be job available for those who are ready,” he advised.
“Let the youth of this Republic become creative,” he added.
He said so on November 24, 2022, following the unveiling of the 2023 budget by Finance Minister Ken Ofori-Atta.
For the fiscal year 2023, the finance minister also unveiled a number of measures to reduce spending.
But addressing journalists after the presentation, Adongo said, “For an economy where people are struggling to make ends meet, an economy where people’s businesses are collapsing, an economy where families are struggling to keep their families together, you have a government that says I’ll still put my hands in your pocket and put twice as much as I took in 2022. Even if your businesses are dying, I’ll take 120% more than I did last year.”
According to Adongo, instead of the government reducing its expenditure, it has increased its expenditure which will further exacerbate the current economic conditions.
“Yet when you look at the expenditure, the minister is moving from 109 billion this year to 205 billion,” he said.
The government introduced 13 expenditure-cut measures as listed below in its 2023 budget statement.
1. All MDAs, MMDAs, and 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 systems, and fuel depots. Accordingly, 50% of the previous year’s (2022) budget allocation for fuel shall be earmarked for official business pertaining to MDAs, MMDAs, and SOES;
2. 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;
3. Limited budgetary allocation for the purchase of vehicles. For the avoidance of doubt, the purchase of new vehicles shall be restricted to locally assembled vehicles;
4. Only essential official foreign travel across government including SOEs shall be allowed. No official foreign travel shall be allowed for board members. Accordingly, all government institutions should submit a travel plan for the year 2023, by mid-December for all expected travels to the Chief of Staff;
5. As far as possible, meetings and workshops should be done within the official environment or government facilities;
6. 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;
7. Reduction of expenditure on appointments including salary freezes together with suspension of certain allowances like housing, utilities, and clothing, etc.;
8. A freeze on new tax waivers for foreign companies and review of tax exemptions for the free zone, mining, oil, and gas companies;
9. A hiring freeze for civil and public servants;
10. No new government agencies shall be established in 2023;
11. There shall be no hampers for 2022;
12. There shall be no printing of diaries, notepads, calendars, and other promotional merchandise by MDAs, MMDAs, and SOEs for 2024;
13. All non-critical projects must be suspended for the 2023 Financial year
The International Monetary Fund (IMF), the Debt Exchange Programme through aggressive tax mobilization, the development of local export capability, and the Social Protection Programme to offer a safety net for the underprivileged are some of these programs.
He stated that the administration thought the action would reduce the
Commenting on the 2023 Budget Statement and Economic Policy presented by Ken Ofori-Atta, the Finance Minister, to Parliament on Thursday, John Kumah said: “The government is going on an aggressive revenue mobilisation path thereby raising VAT by 2.5 percent and bringing the E-levy down from 1.5 percent to 1 percent.”
The property rate tax is also ready for implementation to support the Debt Exchange Programme.
Providing a safety net and social protection programmes for the poor were major projects to be enhanced by increasing the current beneficiaries of the Livelihood Empowerment Against Poverty (LEAP) at 320,000 to 450,000 with a corresponding increase in their GH¢45 monthly payments to Ghc95 bi-monthly, he said.
The LEAP provides cash transfers to very poor people, particularly in households with orphans or vulnerable children, the elderly, and people with extreme disabilities.
Other social protection programmes would also be reviewed to ensure efficiency, including increment in the school feeding rates for caterers, Mr Kumah said.
“Government is committed to expanding coverage to all 2,500,000 extremely poor individuals as estimated by the Ghana Living Standards Survey (GLSS 7) by 2024,” he quoted from the Budget Statement.
He said the expansion of the programme would have a long-lasting impact on the development of the human resource base of the country and improve living standards of the vulnerable.
Established in 2008, the LEAP aimed to support the poorest families in Ghana to better meet their basic needs, prioritise health, enrol children in school and improve their attendance, increase savings, work and invest more to pull themselves out of poverty.
Currently, it supports 1.5 million extremely poor Ghanaians from 344,023 households across the country while providing support for the elderly aged 65 and above, and the severely disabled.
The worst finance minister in the history of the nation’s financial administration, according to him, was Ken Ofori-Atta.
“He has done nothing; he is the worst financial manager in the history of the nation. He is not helpful, and I view that as being courteous to all citizens, he said.
In an interview with Don Kwabena Prah on Happy98.9 FM’s “Epa Hoa Daben” socio-political talk show, he alleged that individuals with first grade in accounting or financing will appreciate the intensity of the cedi depreciation due to demerit decisions by the Minister.
“We must be told that even a first-degree holder in accounting or financing knows better that his bad decisions brought the cedi here and not because the citizens are dumb,” he stressed.
He indicated that the presence of traditional elders and government leaders to support him during his censure made the situation disgusting and unconscionable.
“What disgusts me most is the Chiefs and Ministers being paid with taxpayers’ money appearing to support him, we say we do not want him and you’ve left your work there to support him,” he bemoaned.
“If we had leaders who were responsive, the president would have demoted them. You leave your work to support Ken Ofori-Atta at the expense of the country, with the country’s car, fuel and salaries. This should tell you the calibre of people we have elected, very bad appalling and insulting to the Ghanaian intelligent” he added.
The 8-member Ad-hoc Committee set up by Parliament to investigate the minority’s censure motion against the Finance Minister, Ken Ofori- Atta, has laid its report before the House.
This comes a week after the committee concluded its work. The chairman of the committee, Speaker Alban Bagbin, gave the committee a seven-day ultimatum
to present their findings for debate in the House.
Samuel Okudzeto Ablakwa, a member of the committee, expressed dissatisfaction with the slow pace of dealing with the committee’s report and making
a final decision on the Finance Minister.
He said, “I was unhappy about the laissez-faire attitude… the heart of this issue is that Article 82 has been triggered. It says that during the
debate, the minister facing a vote of censure must be heard, and that has been done. I thought that in the business statement for next week it would have been specifically and clearly programmed so that we would have a day set aside for the debate”.
His view is that the longer the Finance Minister remains in office, the greater the hardships Ghanaians will suffer.
“Every single day that Dr Ofori Atta continues to stay and operate from the Finance Ministry, we see more
downgrades, inflation begins to get through the roof, the cost of living crisis is becoming debate more unbearable, nothing new except the imposition of taxes” the MP emphasized.
Mr Ablakwa believes that once the minister has been heard as stipulated by Article 82, “it is now time for a full-blown debate, and most importantly, the Ghanaian people are looking up to us,” adding that this assignment must be completed so “Ghanaians can know where their MPs stand.”
The North Tongue MP also invited NPP MPs to join them in removing the Finance Minister, warning that if Mr Ofori-Atta remained in office, MPs would have abdicated their responsibility.
“I hope that we meet the two-thirds threshold if only our colleagues on the other side will just show some principles and consistency…” he
said.
“To the extent that he doesn’t want to resign and the President does not want to dismiss him, the onus is on us MPs and I do hope that my colleagues will value public opinion, will respect the will of the people and will remember that it is the Ghanaian people who elected us and brought us here, and we must at all times reflect what they expect,” Mr Ablakwa added.
There have been calls for Ken Ofori-Atta to step down as finance minister, but he has stated that given the current economic climate, now is not the time to do so.
Ghanaians received assurances from the finance minister that the local economy would soon normalize.
Speaking on the floor of parliament on Thursday, November 24, 2022, Ken Ofori-Atta said, “Mr. Speaker, let us not squander the opportunity to turn around, and reset our economy and create a bright medium-term for our country and its people. This is the time to rebuild, not to destroy and tear down. Let us work together for our collective benefit as is said in Nehemiah 2:18, with unity of purpose, service to the Republic, and the abiding grace of God.”
” Mr. Speaker, I repeat, Mr. Speaker, N) fiaa n) baa hi,” he added.
The presentation of the budget in parliament is in pursuance of the Public Financial Management Act, 2016 (Act 921).
This allows the Finance Minister to review the budget statement and economic policy of the government and supplementary estimates for the 2023 financial year.
North Tongu Member of Parliament Samuel Okudzeto Ablakwa has said that the government has finally done what is right regarding the National Cathedral project by capturing a specific allocation of GHS80million in the 2023 Budget for approval.
Prior to the budget presentation, the Finance Minister Ken Ofori-Atta had denied allegation that he withdrew funds from the Contingency Fund for the National Cathedral project.
He told the 8-member ad hoc committee that was investigating the allegations made against him by the Minority, that it was rather funds from the Contingency Vote that were used for the project.
The Contingency Fund and the Contingency Vote, he said, were two different things altogether which should not be confused.
“I did not withdraw funds from the Contingency Fund for National Cathedral,” he told the committee on Friday November 18.
He added “The withdrawals were lawfully done from the Contingency Vote and not from the Contingency Fund as alleged by the proponents.”
In a tweet, after the 2023 budget presentation on Thursday November 24, Mr Ablakwa said “After all the lawlessness, deception and dishonesty about the National Cathedral being a Contingency Project; the Akufo-Addo/Bawumia/Ofori-Atta govt has finally been forced to do what is right by capturing a specific allocation of GHS80million in the 2023 Budget for approval.”
The 8-member ad-hoc committee that probed allegations in a censure motion brought against Finance Minister, Ken Ofori Atta, has presented its report to Parliament.
This comes after the committee’s request for more time from the Speaker of Parliament, Alban Bagbin to finalise its report after the conclusion of public hearings last Friday.
The committee probed allegations of unconstitutional withdrawal of funds from the consolidated fund for the National Cathedral project, gross mismanagement of the economy, and financial recklessnesses leading to the collapse of the Ghana Cedi as the basis for a censure motion against the Finance Minister by the Minority in Parliament.
The Committee although was unable to conclude its work within the seven-day period offered by the Speaker, it has presented its report to the plenary with the Chairman of the Committee expected to move the motion for a debate on it.
On October 25, 2022, the Minority in Parliament filed a censure motion against the Finance Minister, Ken Ofori-Atta.
This occurred at the same time that the Majority MPs, numbering around 80, held a press conference to demand the removal of the Finance Minister and the then Minister of State in charge of Finance at the Ministry of Finance, Charles Adu Boahen, for their inability to manage the economy.
However, the NPP MPs failed to support the NDC MPs in their quest.
According to them, although they want the Finance Minister out, they would do that on their own terms.
They insisted that the Minority had their own parochial interest.
Samuel Okudzeto Ablakwa, a representative for North Tongu, has questioned the government’s intention to raise the Value-Added Tax (VAT).
On Thursday, November 24, 2022, the Finance Minister, Ken Ofori-Atta, announced an increase in the VAT rate for the next year presenting the 2023 Budget Statement and Economic Policy in parliament.
But reacting to the announcement in a Facebook post, the opposition MP wondered how the current event is occurring under the presidency of Nana Addo Dankwa Akufo-Addo, who led a protest against VAT when it was introduced in 1995.
“Who could ever have imagined or predicted that Nana Addo Dankwa Akufo-Addo who led the fatal 1995 Kumepreko demonstration against the introduction of VAT under President Rawlings which tragically claimed the lives of Ahunu Ahonga & 5 others would today be increasing VAT by 2.5%,” he wondered.
The increase in VAT will enable the government to raise money to finance initiatives like road development, according to the minister of finance.
“Mr. Speaker, the demand for roads has become the cry of many communities in the country. Unfortunately, with the current economic difficulties and the absence of dedicated source of funding for road construction, it is difficult to meet these demands. In that regard we are proposing the implementation of new revenue measures. The major one is an increase in the VAT rate by 2.5 percentage points,” the minister said.
In 1995, Nana Akufo-Addo and other members of the New Patriotic Party led what is described as Ghana’s largest demonstration in history.
Five protesters were killed during a protest against the then-government of Jerry John Rawlings’ decision to introduce VAT. Unidentified assailants fired into the crowd of protestors.
It has come to light that the Akufo-Addo-led government has spent a colossal amount of GH¢339,003,064.86 for the construction of the National Cathedral as of March 31, 2022.
This was contained in a document from the Ministry of Finance to the parliamentary ad hoc committee after it made a request for the total amount spent on the National Cathedral while probing a censure motion against Mr Ofori-Atta.
Complying with the directive, the Finance Minister gave a detailed breakdown of the amount of money disbursed for the construction of the edifice.
In a document dated November 21, 2022, payment for the national cathedral project can be dated as far back as 2019, when an amount of GH¢445,000 was paid to enable advance mobilisation for consultation work on the design of the edifice.
On February 10, 2022, the government released GH¢ 32,070,103.02 for the payment of consulting services with respect to the design of the National Cathedral.
Again, GH¢ 80,525,461.84 was disbursed for a similar purpose on March 5, 2021.
The ministry confirmed that, in total, an amount of GH¢113,040,654.86 has been paid to the consulting firm for the construction of the cathedral, Sir David Adjaye and Associates in 2021.
The Ministry also stated that the latest amount spent was ¢25million in March 2022, which was the Government of Ghana’s contribution to the construction of the Cathedral.
Honorary Vice President of IMANI Africa, Bright Simons, has described the amount of money paid to Sir David Adjaye & Associates Ltd for the National Cathedral project as monstrous.
He argued that the amount paid to the aforementioned company is more than the accepted standard of architectural fee, thus breaching the Ghana Institute of Architecture fee structure.
He has called for a probe into the money paid to the company.
Contradiction of money spent on National Cathedral construction
The amount spent so far on the construction of the National Cathedralhas been a subject of controversy.
Per checks by The Independent Ghana, there have been some discrepancies in the report by the Auditor-General and the Finance Ministry.
The amount pumped into the construction of the National Cathedral in 2021 alone was GH¢ 313,558,064.86, per data provided by the Ministry.
However, the Auditor-General’s report with regard to the Controller and Accountant-General’s financial statements of government operations noted that GH¢142,762,500 was spent on the edifice as of December 2021.
National Cathedral State or Private owned?
The state-of-the-art project is in fulfilment of a pledge President Akufo-Addomade to God before winning the 2016 elections.
As part of efforts to redeem his promise, the government demolished the houses of judges for the construction of the project.
Initially, the project was dubbed as a privately owned entity in which the government was to provide 10% as seed money and provision of land, while the rest of the funding was to be provided by the Church and Ghanaians.
However, Member of Parliament for North Tongu, Samuel Okudzeto Ablakwa, disclosed that the project has been funded with taxpayer money.
Mr Ablakwa accused the Finance Minister of “unconstitutional withdrawals from the Consolidated Fund in blatant contravention of Article 78 of the 1992 Constitution, supposedly for the construction of the President’s Cathedral.”
Amid public scrutiny, the government made a U-turn, describing the cathedral as a state-owned project.
According to Mr Ken Ofori-Atta, the project does not belong to President Akufo-Addo.
“National Cathedral is 100 percent owned by the state and is not the president’s cathedral as described by the proponents,” he said when he appeared before the Ad hoc Committee hearing the censure motion against him last Friday.
Commenting on the allegation leveled against him, he insisted that he breached no law in releasing funds for the National Cathedral project.
He added that the monies that have been disbursed for use in the project were from the contingency vault and not the contingency fund, as purported by the minority group.
He explained that, “ There is a difference between Contingency Fund and Contingency Vault. The Contingency Fund, the Proponents refer to, is what is covered under the Constitution, specifically under article 177. This constitutes money voted by Parliament, and advances from this must be authorised by the Parliamentary Finance Committee.”
On the other hand, the contingency vault, he said, “is a line under the other government obligation vault, which is approved by the Finance Committee and passed as part of the annual Appropriation Act passed by Parliament,” he added.
“In preparing the Annual Budget, provisions are made in the contingency vote to cater for such expenditures. As a Finance Minister, I am fully aware of the approval of the procedures for use of the Contingency Fund and have not breached its requirements,” he continued.
Ken Ofori-Atta said, “Through technology, therefore, we can find a means of ensuring that everybody contributes to this national reconstruction [economic recovery] that we have to do and recognise that this is the moment in our history, and to tackle these issues. Will it be uncomfortable? Of course, it will be uncomfortable. But where is the shared burden for us to move across? he asked.
“So, I listen to social media and then I look at the statistics. Since we brought the national ID [Identification Card] to the Ghana Revenue Authority, I can find some 60,000 of the people who live in my nice neighbourhood [Labone, Cantonments etc.] – accountants doctors, lawyers – who always blame the informal sector- masons etc. And these 60,000 people are paying nothing and they have been able to convince you that E-Levy is bad because it’s a tax on tax etc”, he added.
READ FULL STORY OF THE FINANCE MINISTER KEN OFORI ATTA BELOW
He said he’s amazed at how these professionals have been able to convince the informal sector to ‘reject’ the newly introduced e-levy in the 2022 budget.
Speaking at the TUC Economic Dialogue on the 2022 budget, Ken Ofori-Atta said, the introduction of the 1.75% levy on all electronic devices is a way to get everyone to contribute their quota towards the recovery of the local economy.
He said about 60,000 professionals have been highlighted in the Ghana Revenue Authority (GRA) as persons who do not pay tax.
Ken Ofori-Atta said, “Through technology, therefore, we can find a means of ensuring that everybody contributes to this national reconstruction [economic recovery] that we have to do and recognise that this is the moment in our history, and to tackle these issues. Will it be uncomfortable? Of course, it will be uncomfortable. But where is the shared burden for us to move across? he asked.
“So, I listen to social media and then I look at the statistics. Since we brought the national ID [Identification Card] to the Ghana Revenue Authority, I can find some 60,000 of the people who live in my nice neighbourhood [Labone, Cantonments etc.] – accountants doctors, lawyers – who always blame the informal sector- masons etc. And these 60,000 people are paying nothing and they have been able to convince you that E-Levy is bad because it’s a tax on tax etc”, he added.
On November 17, 2021, Finance Minister, Ken Ofori-Atta, during the 2022 budget reading in parliament, announced the introduction of 1.75% tax on all electronic transactions.
According to him, this new directive forms part of strategies to widen the country’s tax net.
He added that the 1.75% tax is also to enhance financial inclusion and protect the vulnerable in the country.
Though this e-levy has received public backlash, the Finance Minister, Ken Ofori-Atta, has said government will find a way to win the cooperation of the Minority in parliament to accept the e-levy.
This comes after the Finance Minister stated that Ghana will implement a debt swap program due to the country’s unsustainable levels of debt during the introduction of the 2023 budget.
However, the Ministry stated in a related announcement on November 25, 2022, that no decision has been taken.
“As stated in the Budget Speech by the Honourable Minister for Finance, Ken Ofori-Atta, the Government of Ghana is contemplating a debt operation aimed at alleviating the pressures on the national budget and restoring debt sustainability. This would also open up financing streams and provide a needed balance of payment support from the Fund,” a part of the statement read.
Meanwhile the Deputy Minister of Finance, Abena Osei-Asare noted that treasury bills will not be affected by any debt restructuring measure the government will adopt.
“The Government of Ghana reiterates its commitment to rolling out a lasting solution to the current economic challenges, with the ultimate goal of restoring macroeconomic stability and anchoring debt sustainability,” the statement concluded.
