- March 30, 2022
- Posted by: Amos Ekow Coffie
- Category: Economics
Data available from the Ministry of Finance indicates that an amount of GH¢17.7 billion (or 4.6% of GDP) has been spent in containing the COVID-19 pandemic since 2020.
Addressing Parliament on the State of the Nation, President Nana Akufo-Addo said the economic devastation of COVID has since the beginning of this year, been further aggravated by the Russian invasion of Ukraine, which has worsened the economic outlook of the entire world.
“We, in Ghana, have not escaped this development, and the consequences are being felt in rising living costs at our markets and at fuel stations”, he added.
Furthermore, the President said “the terrible events in Ukraine have a direct impact on our lives here in Ghana. 30% of our wheat flour and fertiliser imports come from Russia. 60% of iron rods and other metal sheets are imported from Ukraine, and almost twenty percent 20% of Ghana’s manganese is shipped to Ukraine.”
Again, he said “the bombs might be dropping on cities half a world away but they are hitting our pockets here in Ghana. Even so, we have managed to ensure that fuel supplies have not been disrupted, unlike in several other parts of the world”.
President Akufo-Addo, however, pointed out that, the fiscal measures announced by the Minister for Finance, Ken Ofori-Atta, are meant to demonstrate that “we are aware that we are in difficult times, and we are addressing the situation. The belt-tightening measures being set for members of the Executive have been elaborated within this context.”
Some of the measures to address the rising expenditure announced by the Finance Minister are 10% additional discretionary spending cut; 50% cut in fuel coupon allocations for all political appointees and Heads of government institutions, including SOEs, effective 1st April 2022; a complete moratorium on the purchase of imported vehicles for the rest of the year and moratorium on all foreign travels, except pre-approved critical/statutory travels.
The others reduce expenditure on all meetings and conferences by 50%, effective immediately; the pursue a comprehensive re-profiling strategies to reduce the interest expense burden on the fiscal; amongst others.
For revenue measures, the Finance Minister said government will begin the implementation and collection of the revised Property Rate by end of April 2022; implement the E-VAT/E-Commerce/E-Gaming initiatives by end of April 2022; roll out the simplified tax filing mobile application for all eligible taxpayers by July 2022; impress upon Parliament to fast track the passage of the E-Levy Bill, Tax Exemptions Bill, and Fees and Charges Bill; and prioritise the Revenue Assurance, Compliance, and Enforcement (RACE) Programme to plug revenue leakages especially at the ports and the infamous fuel bunkering and small scale mining exporters cabal.
Mr. Ofori-Atta also announced reduction in margins in the petroleum price build-up by a total of 15 pesewas per litre with effect from April 1st, 2022, as reliefs to Ghanaians.