Budget signals time for all-inclusive sacrifices
Last Friday, President Nana Addo Dankwa Akufo-Addo, through the caretaker Finance Minister and Minister of Parliamentary Affairs, Mr Osei Kyei-Mensah-Bonsu, laid before Parliament comprehensive estimates of the income and expenditure of the government for this year.
It was christened: ‘Wonya Wohie’ Budget, literally meaning ‘We are moving forward Budget’, and the President sought to use it to chart a path for prosperity for all citizens, as jobs will be created, the ailing economy restored to growth after it has been ravaged by the novel COVID-19 pandemic which has almost brought all sectors of the economy, particularly tourism, hospitality, industry and manufacturing, to their knees.
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For instance, the government was clear with its agenda to stimulate business activities by giving some rebate to sectors heavily hit by the global pandemic, such as the tourism and hospitality sector. The transport sector was not left out.
There was a clear agenda to continue with infrastructure projectss such as the continuous construction of roads, by declaring another year of roads, build more hospitals under Agenda 111, where more than 100 hospitals will be constructed in districts and municipalities where there are none.
Also worth mentioning is the building of schools, among many others.
The Daily Graphic is particularly excited about infrastructure projects, especially roads, coupled with the intention to continue with the implementation of its flagship programmes, such as Planting for Food and Jobs, One-District, One-Factory, One-Village, One-Dam, because, obviously, these are some of the many ways by which the government intends to stimulate the economy and create jobs for the masses of the people.
Through all these, the government is seeking approval from the House to spend some GH¢113.750 billion, equivalent to 26.2 per cent of the country’s gross domestic product (GDP), in the 2021 fiscal year.
Based on the estimates for total revenue and grants and total expenditure, 2021 fiscal operations will result in an overall fiscal deficit of GH¢41.298 billion, equivalent to 9.5 per cent of GDP. As to how this will be financed, the government is clear in saying that financing the fiscal deficit will come from both domestic and foreign sources.
For instance, net domestic financing will amount to GH¢25.424 billion (5.9 per cent of GDP), while net foreign financing will amount to GH¢15.870 billion (3.7 per cent of GDP) and will include a planned international capital market programme to raise up to $5 billion, of which $1.5 billion will be used to support the implementation of the 2021 budget and the rest for liability management.
These notwithstanding, the government was also clear when it announced new taxes and marginally increased a couple.
The new taxes are a COVID-19 Health Levy and a Sanitation and Pollution Levy. It signalled a review of the road toll, details of which will be laid before the House later in the year, as well as a review of the Energy Sector Recovery Levy.
There is also an increase in the National Health Insurance Levy and the Value Added tax (VAT Rate).
Much as these increases in taxes have been received with mixed reactions, we would want to urge calm and allow ourselves to put our shoulders to the wheel to support the government revive the economy.
The new taxes will hurt our pockets, but it is also equally paramount to note that considering the high debt-to-GDP ratio, which is now hovering above 75 per cent, and a budget deficit of over 11 per cent, the time has come for drastic measures to keep the economy afloat.
As a paper, while we urge calm on the part of the citizenry, we would also appeal to the government to lead by example by tightening its belt. The open show of opulence and lavish lifestyle by some government appointees must end to enable the people to come along.
We would also want the government to take the fight against corruption in the country a notch higher to ensure that while the people are squeezed, the money does not end up in the pockets of a few.
We would also want to see a situation where domestic revenue generation is stepped up now, that Ghana cards will now be used as tax identification numbers (TINs).
We have no doubt that, should this be done, the period of hardship and sacrifices shall pass and the economy will bounce back onto the path of accelerated growth.
Once again, we are looking forward to a healthy and dispassionate debate, devoid of partisanship, and the eventual passage of the budget to enable the government to start spending and implementing its laudable programmes in the good interest of all.
