Finance Minister, Mr Ken Ofori-Atta says the government will realign public expenditure to suit the one district, one factory (ODOF) programme to kick-start moves to create jobs.
He said even though ongoing audit of the country’s fiscal accounts had revealed a large deficit arising out of factors, including revenue shortfalls, the government’s focus in this year’s budget would be to generate jobs, while continuing fiscal consolidation efforts.
Addressing some journalists from the domestic and international press in his office in Accra last Sunday, Mr Ofori-Atta, a seasoned investment banker, said: “The commitment to do those promises is not something we are going to step back from.”
When pressed for timelines, he said although it was early days yet to determine how many of the promises could be redeemed in a single year, the government was confident that it would deliver on all the promises within four years.
“It really becomes the issue: ‘How much can you do in a year?’ But as to our clarity that we will be able to do it over the four years, we are very comfortable about that,” he stated.
Mr Ofori-Atta said while the government would be disciplined in its expenditure, it would create the space for the private sector to thrive and create jobs.
“You cannot win a sweeping mandate of this nature, where the cry out there is for jobs, and have a budget that does not seem to address that. So we will do that and we have to get creative at it,” he stated.
Tax cuts
The New Patriotic Party (NPP) government has pledged to cut taxes, especially what it calls the ‘nuisance taxes’. But the government has uncovered a tall list of arrears and huge deficits on both the current and fiscal accounts. This makes revenue availability to execute those promises a major concern to be addressed, alongside executing those ambitious promises.
The Finance Minister confirmed that some level of ‘nuisance taxes’ certainly would be dealt with, but did not provide timelines.
It is on record that the NPP government of 2001 to 2008 reduced corporate taxes from 32 to 25 per cent. The minister said that yielded a net turnout of over five per cent of Gross Domestic Product (GDP).
“Therefore, philosophically, the government is committed to transforming taxes from being punitive to a production generating environment,” Mr Ofori-Atta said, adding: “It is the right thing to do and so we will do it.”
He expressed the belief that more people would comply with taxes which were not pernicious, a situation which should increase revenues from taxes.
Revenue collection
The government has initiated moves to have a single national identification system in place by the end of this year.
The Finance Minister said that exercise, together with the e-government policy, would provide more information on citizens and inform how to get them to participate in discharging their civic responsibilities.
He said the Finance Ministry would work closely with the Ghana Revenue Authority (GRA) to generate more revenue through efficiency, while the government also took steps to ensure value for money in expenditure.
“We think we’ll increase the revenue base to be able to do our policies such as the ODOF and the $1 million per constituency programme. Capital expenditures should also be realigned to suit these programmes. It’s a lot more about efficiency and prudent use of proceeds,” he stated.
Relationship with China
The government, led by the Ministry of Finance, met with the Chinese Embassy for the second time yesterday.
The discussions, according to the Finance Minister, had centred on how to strengthen Ghana-China relations and how China could support the new direction that the country had taken.
The $3-billion China Development Bank (CDB) loan that Ghana was pursuing a few years ago would also feature in the discussions, he said.
Ghana managed to draw about $1 billion from the CDB loan, which was used to finance the Atuabo Gas Processing Plant to process natural gas.
Optimism
Mr Ofori-Atta expressed optimism about the economic outlook and was confident that the government would achieve a lot by the end of the year.
“There will be a sense of hope, optimism and economic freedom by the end of the year that will engender the growth that we expect,” he said.
Although the government has discovered large arrears in the fiscal and current accounts, giving rise to what economists call a double-digit deficit, the minister was hopeful the government would find some hidden treasure — oil revenue, for instance, would increase.
“But really the discipline of not overspending and ensuring that we get the revenue that we deserve will go a long way in ensuring that we achieve our targets,” he added.
Mr Ofori-Atta also called for the creation of an environment of care, especially among civil-public servants, about managing and spending the country’s resources prudently.
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