[contextly_sidebar id=”OeH8Cs4lKwxTmI1RXRHYX5vvPmlmLO8U”]He argues that government will also be compelled to resort to cutting down on some critical expenditure to make up for the shortfall.

“It appears that the Minister seems to have shifted the debate to the middle because he is the one who is going to face reality… how do you finance free SHS, how do you finance the one million US dollars for the constituencies?” Seth Terkper quizzed.

He added, “We are told that some monies will be taken from the District Assemblies; the very ones that are going to be losing their revenue base. So they are very hard choices and it’s up to the Minister of Finance in consultation with the President and cabinet to show reality.”

Finance Minister, Ken Ofori Atta during the budget presentation on Thursday, announced that about eight taxes that will be abolished whilst four others will be reviewed.

The taxes to be abolished include the 1 percent special import levy, and the 17.5% VAT on financial services and domestic air tickets.

The move has been met with excitement from the beneficiary sectors. But Seth Terkper told Citi Business News government may suffer severe challenges considering some risks that confront the economy.

Some of the factors that the former finance minister alluded to include; falling crude oil prices, low revenue mobilization, among others.

“We are in the race with Kenya and others by African standards, and the NPP government can up its game. But some of these are regional so it means that the economy even if it doesn’t make 7%, it’s going to double around 6% from the 3% margin it is currently. With luck, the coming on-board of the TEN Fields, and the possibility of fixing the FPSO Kwame Nkrumah and commencement by Sankofa towards the end of the year should rake in forex and exports will shoot up.”

Other taxes that are up to be abolished are; 17.5% VAT/NHIL on selected imported medicines that are not produced locally, 17.5% VAT/NHIL on domestic airline tickets, 5% VAT on real estate cost, and  Duty on imported spare parts.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post Gov’t may reduce expenditure over tax cuts – Terkper appeared first on Citi 97.3 FM - Relevant Radio. Always.

Addressing the press today [Thursday], the Chairman of Parliament’s Finance Committee, Dr. Assibey Yeboah, speaking on behalf of the Majority, warned that if figures were not reconciled with the right data from the previous government, the country could be sanctioned by the IMF.

[contextly_sidebar id=”Coc56d37gTTPYUFbBEfrRYznrD04J7kO”]He cited an instance in 2000 when Ghana was fined $39 million by the IMF.

This press conference was in response to the Minority’s attempts to downplay claims by the Vice President, Dr. Mahamudu Bawumia, that the previous government failed to account for GHc 7 billion they spent while in office.

The Minority explained that, the fund was used for part of the contract database and outstanding commitment, and did not constitute the conventional definition of arrears.

The Minority explained that, the Ghc 7 billion that the Vice President Dr. Bawumia is talking about “is as a result of a major initiative or reform on government contracts and expenditure, which is part of the GIFMIS project that the new administration is expected to continue implementing. The framework is also covered in the new Public Financial Management (PFM) Act, under the Budget Responsibility provisions.”

Dr. Assibey Yeboah, however, surmised that the previous government may not have been forthright with the IMF.

“On the face of the reality that the arrears date back to 2014, then it will suggest that when the previous administration entered into negotiations with the IMF, full disclosure of data was not made available to the fund.”

“Again, on account that arrears for 2015 and 2016 were not fully disclosed, that raises further questions on the integrity of data that we have been churning out over the past eight years.”

Implications for 2016 deficit

Dr. Assibey Yeboah highlighted the implications for the year 2016, noting that, already deficit projected for 2016 is hovering around 8.5 to 9.5 percent of GDP, according to the Bank of Ghana and the Ministry of Finance.

“These new uncovered arrears could put the overall budget deficit at 10 to 11 percent of GDP… For an economy like ours, the current deficit numbers show that in 2016 alone, our expenditures far outweighed our revenues by as much as $4 billion.”

“There is an admission by the minority that the GHc 7 billion expenditure which had been kept out of the purview of the books of government constitutes rare expenditures that have been taken.”

IMF could clear up matter

Given the ongoing implementation of the extended credit facility, Dr. Assibey Yeboah is of the view that the IMF stands in a better position to make some of these issues clear.

“As to whether this represents a breach of the ECF programme conditionality, we will know by next week when the mission chief is expected to brief donors on his findings.”

“Under the programme, the government is not allowed to accumulate arrears. This may yet represent another serious breach of the programme and if care is not taken, punitive actions could be taken against Ghana,” he said.

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post NDC’s GHc7 bn expenditure was hidden from IMF – Majority reveals appeared first on Citi 97.3 FM - Relevant Radio. Always.

The Minority in a statement today [Wednesday], expressed its displeasure with the Vice President’s revelation, describing it as most “unfortunate.”

[contextly_sidebar id=”RYfWWDCsOzwNsUWPxXjB3W9wgCGiuR9q”]“We are displeased by the tendency of the Vice President to rush with information to the public and the media particularly the structural measures and reforms without taking time to understand the rational for the reforms and initiatives.”

The Minority explained that, the Ghc 7 billion that the Vice President Dr. Bawumia is talking about “is as a result of a major initiative or reform on government contracts and expenditure, which is part of the GIFMIS project that the new administration is expected to continue implementing. The framework is also covered in the new Public Financial Management (PFM) Act, under the Budget Responsibility provisions.”

The Minority explained that, the fund was used for “part of the contract database and outstanding commitment, and does not constitute conventional definition of arrears. The government is obliged to incorporate the commitments, as a first charge on the Ministries, Departments, and Agencies (MDA’s) budget 2017.”

What did Bawumia say?

The Vice President, Dr. Mahamudu Bawumia, on Tuesday revealed that an amount of GHC 7 Billion spent by the previous National Democratic Congress (NDC) government, had not been accounted for.

Speaking on the topic: The Role of Integrity and Transparency in Accelerating Ghana’s Development at the launch of the Ghana Corporate Governance Initiative in Accra on Tuesday, Dr. Bawumia said the current government discovered this while interrogating data on the previous government’s expenditure.

Dr. Bawumia added that, the previous government failed to disclose this backlog of expenditure.

“In preparing for this year’s Budget for example, we have been very surprised by the fiscal data, the data on our expenditure and our revenue. As we interrogated the data, we realized to our shock that, expenditure amounting to 7 billion cedis was made by the previous government, but never disclosed. These come from 2014, 2015 and 2016, so where have they been hiding all these years? How are you supposed to manage an economy with faulty data? And so we have to emphasize that, getting the data right is really very key because it throws the entire budget into disarray because you are going into 2017 and suddenly you are told by the way that there is 7 billion you have to pay next year that you did not anticipate. This is the reality.”

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By: Marian Ansah/citifmonline.com/Ghana
Follow @EfeAnsah

The post Bawumia goofed on GHC 7 billion expenditure claim – Minority appeared first on Citi 97.3 FM - Relevant Radio. Always.

Speaking on the topic: The Role of Integrity and Transparency in Accelerating Ghana’s Development at the launch of the Ghana Corporate Governance Initiative in Accra on Tuesday, Dr. Bawumia said the current government discovered this while interrogating data on the previous government’s expenditure.

Dr. Bawumia added that, the previous government failed to disclose this backlog of expenditure.

“In preparing for this year’s Budget for example, we have been very surprised by the fiscal data, the data on our expenditure and our revenue. As we interrogated the data, we realized to our shock that, expenditure amounting to 7 billion cedis was made by the previous government, but never disclosed. These come from 2014, 2015 and 2016, so where have they been hiding all these years?How are you supposed to manage an economy with faulty data? And so we have to emphasize that, getting the data right is really very key because it throws the entire budget into disarray because you are going into 2017 and suddenly you are told by the way that there is 7 billion you have to pay next year that you did not anticipate. This is the reality.”

He was however quick to add that, the current government is taking measures to resolve these challenges, saying “We have been less than a month in office, but we have taken some steps to accelerate the implementation of some measures that will ensure accountability, transparency and integrity in governance. There is a lot more to do” he stated.

The Vice President is the Head of Government’s economic Management team, and is working with the Finance Ministry to prepare the next budget, which is to be presented in March.

National Identification

While reiterating government’s commitment to addressing the issues of National identification, he noted that a credible national database is essential to formalizing the economy, and enhancing economic development,.

Dr. Bawumia also stressed the importance of a national address system, which he said will improve the ease of doing business and reduce opaqueness in the economy.

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By: Marian Ansah/citifmonline.com/Ghana
Follow @EfeAnsah

The post Gh¢7billion expenditure under NDC unaccounted for – Bawumia appeared first on Citi 97.3 FM - Relevant Radio. Always.