2024 Budget, discipline, discipline, discipline
The Minister of Finance, Ken Ofori-Atta, last Wednesday presented the 2024 Budget to Parliament, seeking an approval to raise GH¢176.4 billion and spend GH¢226.7 billion for the 2024 fiscal year.
A number of measures, including tax and non-tax areas that will aid in achieving the targets set out in the budget were announced.
The measures include zero-rating Value Added Tax for some imported products and intermediary goods to close distortions in the tax structure.
Other measures are geared towards encouraging local production of some specific items, including pharmaceuticals and sanitary pads.
The budget also proposes a framework under the existing Public Financial Management Act, 2016 (Act 921) to govern the mobilisation and management of non-tax revenue.
Mr Ofori-Atta said the Ministry of Finance would also collaborate with the Ministry of Works and Housing and the Controller and Accountant General’s Department (CAGD) to streamline and ensure efficient management of rent deductions from occupants of government accommodation.
Most importantly, the government wants to ensure efficiency of institutions, particularly those involved in the collection of taxes.
This is to ensure that tax revenue increases without raising rates or introducing new levies, the minister stated in the budget.
However, what is difficult to track is expenditure cuts.
Those announced were mostly expression of intentions without the concrete actions tied to them.
For instance, the budget proposes the amendment of the Fiscal Responsibility Act, 2018 to enhance budget credibility, underpin lasting fiscal discipline and improve fiscal policy oversight.
Such a move will take some time to complete, perhaps longer than one budget cycle.
Among other administrative measures, it also proposes a centralised inventory of all ongoing and planned public investment projects to strengthen budget credibility, exercise commitment control and prevent accumulation of spending arrears.
Although the government, prior to the budget, was very heavy on expenditure rationalisation, it is not clear where the axe fell on the expenditure side.
The targeted revenue equivalent to 16.8 per cent of Gross Domestic Product (GDP) and expenditure amounting to 21.6 per cent of GDP the minister seeks approval for leaves a gap (deficit) of GH¢50.1 billion, equivalent to 4.8 per cent of GDP.
It continues to beg the question how the deficit will be closed, given the closure of the international capital market and the ambitious front-loaded targets the country must meet to trigger grants and support from development partners.
Achieving the targets, indeed, requires some serious expenditure cuts.
That notwithstanding, the Daily Graphic welcomes the reduction and rationalisation of some taxes and efforts to promote local industries and protect the fledgling ones.
This shows that the government, indeed, listened to suggestions and the cries of the people.
Hopefully, such initiatives will put the local industries in a better position to expand and drive economic growth.
The emphasis, the paper believes, should now be on implementation.
Every plan and budget worth their salt are as good as their implementation.
This is where the Daily Graphic wants to entreat the government, its agencies and all stakeholders to put their shoulders to the wheel and implement this all-important strategy to the letter.
For now, the country does not have an all-inclusive economic plan which has the alignment of all political parties.
This means policies are pursued based on the ideology of the party in power, which informs its economic policy choices.
It is therefore crucial that all citizens support the policy choices of the administration in power as much as possible since the citizens have deferred the power to do so to the political party in government.
There can be disagreements over the choices and methods of implementation, but the Daily Graphic enjoins all to support the policy measures to guarantee their success.
We will continue to play our part by highlighting issues in the public domain and bringing feedback from the people to the government.
It is in our place to bring everybody on board to sing harmoniously from the same hymn sheet, so as to enable the country to achieve its set goals.
To exit the crisis the country finds itself in requires discipline from all quarters, but most importantly from the government.
That is what will be required the most next year.
The Daily Graphic believes hard work and discipline must be at the centre of everything the government does in the 2024 fiscal year.