He said the programs including the flagship Free SHS program, National Health Insurance Scheme, Planting for Food and Jobs among others, will be provided with the needed financial resources to ensure that they achieve the desired results.

[contextly_sidebar id=”GQDBPYS86UfXtw0t0u7zIsYEpwT4hUvg”]Presenting the government’s mid-year budget review to Parliament on Monday, Mr. Ofori Atta said despite the government’s plan ensure fiscal discipline and prudent spending, it is committed to growing the economy through its various social intervention projects.

“Mr. Speaker, despite the measures being taken to ensure that we maintain fiscal discipline, the government remains strongly committed to growing the economy and delivering services to our people through strategic allocation and efficient use of resources.”

“Our flagship programmes such as the Free SHS, NHIS, School Feeding, LEAP, Planting for Food and Jobs etc… will be protected,” he said.

The New Patriotic Party government secured the mandate to govern the country on the back of a number of social intervention programs including the Free Senior High School, Planting for Food and Jobs among others.

The Free SHS policy, which is expected to take off from September, will ensure government pays tuition among other fees for all students in public Senior High Schools for their three-year stay in school.

It is expected that the program will increase access to quality education and as well as reduce the rate of senior high school drop-outs due to nonpayment of fees.

The planting for food and jobs program, which was announced earlier this year by the Minister for Agriculture, Dr. Afriyie Akoto, is aimed at revolutionizing the country’s agricultural sector and creating jobs.

As part of the program, government will provide farm inputs, fertilizer, and improved seeds among other resources to boost agricultural production.

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By: Jonas Nyabor/citifmonline.com/Ghana

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According to the Minority, the House lacked the quorum at the time of the budget approval.

In a Citi News interview, the Minority Chief Whip, Muntaka Mubarak, accused the Speaker of Parliament, Mike Ocquaye of exhibiting bias in the matter.

“What he [Speaker] did was very unfortunate, and we are considering whether we should not come with a substantive motion about the conduct of the Speaker,” Mr. Mubarak said.

“With the greatest respect to him… what he did was wrong. He abused the Minority which was just not fair. We are going into a caucus meeting to determine whether we can come using our rules.”

The Minority Chief Whip also suggested that, Majority MPs were not serious about government business.

“If they knew they were going to approve their policy, by 10:00am, all the 169 Majority MPs should have been here. We should not have been struggling over the numbers,” he stated.

The passing of the budget took place after the Minister of Finance, Ken Ofori-Atta, presented four Bills to Parliament for the proposed tax cuts in the 2017 budget.

The bills presented were; the Income Tax (Amendment) Bill, Special Petroleum Tax (Amendment) Bill, Special Import (Amendment) Bill and Customs and Excise (Petroleum Taxes and the Petroleum Related Levies (Repeal) Bill.

The 2017 budget is seeking to abolish and review 15 key taxes, but the proposed tax cuts can only take effect after it has received parliamentary approval through amendment of existing Bills.

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

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About half of the allocation will go into employee compensation with the least amount, representing GHc 56 million earmarked for capital expenditure.

The allocation also indicates that the Health Ministry was able to retain almost GHc 1 billion of its internally generated funds.

The Infographic below breaks down the full allocation to the Health Ministry.

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Mr. Cudjoe, speaking on The Big Issue on Citi FM, said the seeming lack of a policy document has contributed to uncertainties about the timelines, source of funding and scope of the policy.

[contextly_sidebar id=”DiFdCnAIS5emIzpPJgfRK2HXabeUl71d”]He opined that, “the challenge of the conceptualization of policy and its implementation has always been a problem in this part of our world for both major political parties. I kept asking myself, where is the green paper on free SHS because it has been eight years since 2008 [when the policy was first trumpeted].”

“Some of the challenges we are dealing with right now point to the fact that, because there hasn’t been any clearly written policy that will guide the Free SHS policy, like most other policies, there is a reason we seem to be going back and forth.”

Funding of Free SHS

There has been uncertainty about how the New Patriotic Party’s major policy would be funded, with a controversy emanating from indications government would draw on the Heritage fund, among other sources.

But the free SHS programme, scheduled to take off from September 2017, will be financed from the Annual Budget Funding Amount (ABFA), the Minister of Finance, Mr. Ken Ofori-Atta said during the 2017 budget statement.

It will cost government GHc 400 million to implement the free SHS programme for the 2017/2018 academic year.

Also on the Big Issue, a Senior Lecturer of Public Sector Accountancy and Finance at the Accra Technical University, Dr. Ibrahim Zubairu, described the policy as a repackaged programme akin to the progressively free Senior High School education that was introduced by the Mahama administration.

This is a claim that the National Democratic Congress Minority has also made leading to it to tag the government’s promises as a “monumental deception”.

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

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According to them, the cuts in the sources of revenue for the government and the failure to appreciate fully the challenges that may confront the economic management style of the new government will affect the Akufo-Addo government’s choice of production over taxation.

Government announced its intentions to cut the budget deficit and improve revenue performance in 2017, aside the review and scraping of taxes and levies during its first budget statement.

But speaking to the media, the Deputy Minority Leader, James Avedzi, said the Finance Minister will be running back to Parliament with a downward review of its ambitious and unachievable targets during the mid-year budget review.

“They have the opportunity to come and review the targets in the mid-year. They indicated that in four months time they will come for a mid-year review. I was even teasing them on the floor saying, how can you present a budget in March and in July, and you are coming for a review. We know they cannot attain those targets in terms of revenue that they want to collect,” Mr. Avedzi opined.

The Deputy Minority Leader also downplayed the significance of abolishing import duty taxes on spare parts, as he explained that government had relinquished the stake it had it their trade.

“What they have done is to give money to the traders at Abbosey Okai market because who among us will know the components of the percentage price of spare parts we buy? We do not know. They will import these parts. They will not pay tax and they will sell at the price they want. We don’t have any mechanism to check them,” Mr. Avedzi stated.

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

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According to him, the New Patriotic Party government has ostensibly hoodwinked Ghanaians by ignoring some major promises, and instead fulfilling insignificant ones.

[contextly_sidebar id=”mPQZlu60uDPyKkI3cn3v2i61Bbnuef7K”]The 2017 budget heralded the abolition and review of some 12 key taxes in the aviation, finance and real estate industries, aimed at providing a friendly environment for businesses in the country.

Most notably, taxes on head porters ‘Kayayei’, and duties on imported spare parts were abolished to the glee of stakeholders.

Vice President, Dr. Mahamudu Bawumia, defended the budget saying it gave Ghanaians, a new sense of hope, as the components of the budget indicated government’s commitment to realizing all the promises it made to Ghanaians during the 2016 election campaign period.

Insignificant taxes removed, reviewed 

But speaking on Citi TV’s Politicos to Citi News’ Umaru Sanda Amadu, Mr. Kwetey maintained that, government had run away from its promises to remove or review more impactful taxes, like the energy sector levy, or the reduction in corporate income tax as promised ahead of the 2016 elections.

“There is something called running away from the camel and taking care of the insects. What it means is that, if there are big things you need to deal with, you can run away from the big things and do away with the insignificant one in order to deceive the people,” he explained.

“If you add them [taxes reviewed or abolished] in terms of value, they don’t even amount to the reduction of corporate income tax from 25 to 20 percent, let alone anywhere near the energy sector levy.”

Mr. Kwetey reminded Ghanaians that, President Nana Akufo-Addo assured the Association of Ghana Industries (AGI) he was going to abolish the energy sector levy, and he told the country he was going to reduce corporate income tax from 25 to 20.

“These are clear and explicit statements that he made. You don’t come and look for a reduction of levies that when you put them together, amount to very little. That is like deceiving the country. He has come to treat a little wound in order to make you feel like they have done something about it. That is what you call subterfuge and that is why calling it 419 is appropriate”

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

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He explained that, government would be setting a precedent that will be at odds with the New Patriotic Party government’s efforts at decentralization, by allowing Parliament to quash bye-laws enacted at the local level.

[contextly_sidebar id=”1PCwNXeu7HWD9fLy59uyZcpYkAytJceG”]In Accra, the Accra Metropolitan Assembly (AMA) levied kayayei 50 pesewas for operating in major markets in the metropolis, but the Akufo-Addo government, via its maiden budget, abolished this, and other tolls imposed on the head porters who make a living by carting goods on their heads for customers in markets.

Speaking on Eyewitness News, Mr. Avedzi noted that, “by this act, it means that whatever is done at the district level. We can use the power of parliament to quash it. Are we decentralizing the power to the people or we are re-centralizing the power?”

He suggested that, local government should be allowed to scrap laws it had enacted instead of being sidestepped by the central government.

“This is a resolution of the local government, a resolution of the AMA or the KMA. It is for them to go back and reverse it. If you want them to reverse it, go and tell them that, go and do your resolution and remove it. Don’t go and do a public announcement in Parliament saying you have abolished the tax,” Mr. Avedzi insisted.

Government right to intervene

The New Patriotic Party (NPP)  Member of Parliament for Obuasi West Constituency, Kwaku Kwarteng, however, said government was well within its right to intervene if it felt local assemblies were imposing strenuous levies.

“The suggestion that the local assemblies can make any decision and charge levies and central government is helpless in the context of the current legal arrangement, is false,” he asserted in a retort to Mr. Avedzi.

“Government has a responsibility to look at the circumstances of every section of society and make specific directives in respect of their welfare. We are not saying that nobody should pay these levies. In respect of a particular kind of business, we are saying that they should not.”

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

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The Minority contends that, the budget statement was silent on a number of promises on education, with the implementation of Free Senior High School education taking centre stage.

[contextly_sidebar id=”NuoxbprsRnnUJhgJVBCzahtu3d6nnyqh”]Addressing a press conference, the Minority leader, Haruna Iddrisu, said “we are now aware that they are only targeting new entrants to senior high schools and not every student. That raises questions of equity, it raises questions of fairness, aside the fact they are going to disappoint the youngsters.”

“The budget is also completely silent on the President’s promise that all day students will be fed. We wanted to find a space in the budget on how this free feeding will be provided in addition.”

Mr. Iddrisu said the budget also vindicated the Mahama administration’s position that the “most viable approach to Free SHS was “the gradual approach under the progressively free senior high school programme, which was introduced in the 2015/2016 academic year.”

He added that, given the indications from the budget, “what the NPP has proposed in the budget is progressively free senior school under a different name. We find this to be an iniquity and unacceptable.”

Financing needed for other educational sectors

Mr. Iddrisu stressed that, the lifeblood of education in Ghana was largely funded from allocations from the Ghana Education Trust Fund (GETFund).

But according to the Minority Leader, this was likely to suffer, given government’s announcement that the existing legislation that dictates the estimation of grants to government units like the GETFund, were being reviewed with intent to constrain them to a ceiling of 25 percent of tax revenues.

He said government must be reminded that, education goes beyond just the second cycle as all levels of education require adequate financing.

“So even as they [government] are struggling to cap, re-allocate and redistribute, they should be mindful that all structures of education benefit from the allocation to the GETFund.”

“We hasten to add that, even the free senior high school programme in its current state will not survive if adequate provision is not made to accommodate the massive increases in enrollment expected, in view of the decision to merge senior high school education with basic education. This is more so when no clear provision has been made in the budget for the continuation of the Community Day Senior High school started  by the Mahama administration.”

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

The post Budget exposed NPP’s ‘monumental deception’ – Minority appeared first on Citi 97.3 FM - Relevant Radio. Always.

Energy

a. As at December 2016, total power sector debt stood at USD2.4bn. Given the current rate of the energy sector levy (Ghp41/liter on petrol/diesel and Ghp37/liter on LPG), and projected consumption of petroleum products in Ghana for 2017 (5,125,694,000liters and 436,102,800 liters respectively for petrol/diesel and LPG), the expected revenue from the energy sector levy per annum is approximately Ghc2.26bn (USD$0.497bn). This means that it will take approximately 5 years to clear power sector debts ALL OTHER THINGS EQUAL. In light of this, what viable fiscal policy is the government going to consider? Reduce the levies or maintain them as it battles public debts and supply of power simultaneously?

b. Erratic power supply has been attributed to the shutdown of power plants. The inability of businesses to pay the discriminating price of 42cents/kwh; higher than some other jurisdictions across Africa, has largely contributed to the sector’s inability to keep power plants running. As part of the industrialization drive, will the 2017 budget highlight strategies for ensuring transparency in the pricing of power and provide appropriate timelines for implementing these strategies to avoid further burdening of private sector and consequential job losses?

c. Given that production will not expand drastically beyond 120,000bopd in 2017, with prices remaining sticky and oscillating the US$55 mark, how will the 2017 budget secure the possible declining revenues from petroleum whiles guaranteeing further exploration and production?

d. Current Petroleum production will only sustain for 25-30 years. If no new discoveries are made, the economy will suffer the effect of declining revenues from oil given its increasing dependence on revenues from the sector (Share of petroleum revenue in Ghana’s domestic revenue increased from 5.9% in 2011 to 13.5% in 2014). Meanwhile, there are several companies holding exploration licenses but failing to meet their minimum work obligation. What are government’s strategies to incentivize further exploration and production and to fast track the passage of requisite regulations accompanying the petroleum exploration and production bill?

e. The financial and operational viability of SOE’s, particularly ECG, in the power value chain has been under criticism for a long time. This necessitated the MiDA Compact II which has drawn a roadmap for turning the operational and financial viabilities of the SOE’s around. With current proposition of possible off-load of some of the SOE’s onto the bourse, will the 2017 budget or medium term development framework indicate the projected economic gains from the proposed strategy as against arrangements under MiDA Compact II?

f. The government has proposed enhancement in private sector investments in the renewable sector and the proposed plan of the government to augment renewable generation through dedicated renewable energy for industrial development, distributed solar for government and public buildings, solar parks in the northern territory seems to be intent in the right direction. To increase private sector investment what is government’s time bound road map for achieving this along with investment schedules?

Infrastructure.

a. Railways/ Aviation/ Roads Development
The President in his first State of the Nation Address announced the commencement of the Takoradi to Paga railway construction project this year, which will connect the Eastern and Western corridors. It is expected to open the country and provide access to our landlocked neighbours. The government will require an estimated $3.9 billion investment for such a grand project. However, from 2012 to 2016, the total budget allocation to the Ministry of Transport to execute all its projects in the Aviation, Railways, Maritime and road management sub sectors was only GH¢ 701,988,756 ($175m). In 2015, GH¢41.8 million ($10.5m) was spent on redevelopment and construction of railway lines, railway stations, and the supply of rolling stock..8 million ($10.5m) was spent on redevelopment and construction of railway lines, railway stations, and the supply of rolling stock.

b. Water, Sanitation & Hygiene. Danger is looming in the Water, sanitation and hygiene (WASH) sector as donor funding to the sector keeps dwindling. The budget of the ministry of water resources, works and housing is heavily donor funded. In the last 4 years, the budget allocation to the Ministry was about 2 billion cedis. Out of this amount, internally generated funds contributed just about 1%. In 2015, the total revised budget for the Ministry Water Resources, Works and Housing (MWRWH) was GH¢329,245,957.00, out of this amount 75.5% was donor funded, Government of Ghana contributed only 3.4%. 21.1% came from Annual Budget Fund Allocation (ABFA) whiles Internal Generated Fund (IGF) was only 1.2%. With the ABFA likely tochannelled to fund the blanket free SHS policy this year, what innovative funding sources will be available in the upcoming budget to sustain programs in the WASH sector?

c. In 2015, GH¢183.2 million (US$49.2 million) of ABFA was transferred to the Ghana Infrastructure Investment fund (GIIF) to deal with the huge infrastructure deficit in Ghana..2 million (US$49.2 million) of ABFA was transferred to the Ghana Infrastructure Investment fund (GIIF) to deal with the huge infrastructure deficit in Ghana.

d. Science Technology & InnovationScience Technology & Innovation
Ghana currently invests only between 0.2 and 0.6 per cent of Ghana’s Gross Domestic Product (GDP) in Science and Technology Innovation (STI) as compared to some other African countries such as Malawi, South Africa that invest above 1% of their GDP in STI. The low investment partly explains the poor performance of Ghana’s economy, agriculture and manufacturing industries in the last eight years. In 2016, the ministry of Science, technology and innovation had only GH¢274,215,152 allocated to it, 61% of which was to be funded by the Government and 31% by Internal generated fund. The contribution of STI to Ghana’s GDP is estimated to be less than one percent 1%, below the 2.5% average in Africa. We await the 2017 budget to see how much would be allocated to science, technology and innovation to leverage it for economic growth and transformation

e. Communications
The Ministry of communication’s budget is largely donor funded. In 2014, 86% of the GH¢93,988,899 allocated to the ministry to execute its projects and programmes was donor funded. With the dwindling donor support for our budget, we await alternate funding sources that would be available in the upcoming budget to fulfil the promises of the NPP in mainstreaming ICT into the public sector, registering every Ghanaian citizen, digitizing access to social and public services and investing in growing start-ups.

Economy

a. Did you know that the NDC government pledged in its 2012 manifesto to maintain a GDP growth of at least 8% per annum; maintain a single digit inflation rate; reduce fiscal deficit to 5% of GDP; increase per capita income from about $1600 to $2300 by 2017; and improve the international reserve to four month of import cover; Did you know that except in 2012 when an 8 % GDP growth rate was attained (in fact 9.29%) , Ghana missed subsequent GDP growth targets of 8% and all inflation, deficit, per capita income and international reserve targets? We haven’t seen any growth targets by the NPP in their 2016 manifesto. Will the 2017 budget give us any hints?

b. Did you know Ghana has dropped 13 places in the global competitiveness index over the past 5 years? In the 2016/2017 ranking, Ghana placed 114 out of 138 countries. The decline mirrors deterioration in the productive use of available resources in the country. Are the provisions in the upcoming budget going to improve Ghana’s global competitiveness?

c. Over the past 5 years, revenue collection on average has been about 6% below target. How does the persistent deficits in revenue affect Ghana’s credibility on the global financial market given that about 42% of budget deficit is foreign financed?

d. Do you know that for the year 2014 and 2015, interest payments to GDP ratio was more than 6% while Capex for the same period was below 5.5%? How will the NPP government address debt sustainability in the new budget? Should Ghanaians look forward to increased allocations to Capex in the 2017 budget and in subsequent budgets?

e. Ghana is currently ranked 108 out of 190 countries based on the conduciveness of its business environment. It is of little wonder that FDI has fallen by 52.5% between 2012 and 2015. Can the “one district one factory” and the idea of a private sector led economy be feasible in such an environment? What initiatives will be outlined in the March, 2017 budget to improve the regulatory environment in Ghana?

f. Between 2012 and 2015, Government spent averagely 9% more than budgeted on personal emoluments while Capital expenditure was 9% below target. In the same period, personal emoluments constituted about 8.6% of GDP. What is the public sector’s contribution to GDP? Given that at least 70% of total revenues were spent on their compensation, are Ghanaians getting value for money? Are there measures in the 2017 budget to ensure efficient delivery of public service and value for money?

Education & Health

a. The core element of the NPP’s education programme is “free education for all Ghanaian children up to senior high school. Ghana invested on an average 6% of GDP into education over the last 5 years higher than the Sub Saharan average of 5% of GDP in 2015. Compensation takes up 70% of education budget and the residual 30% percent on assets, goods and services. Given that the success of the free SHS policy depends largely on allocations to Goods and Services and Assets, there is a need for readjustment of the education expenditure. Will change in allocation pattern been seen in the education budget in the 2017?

b. The NPP in its 2016 manifesto indicated that the revenue from oil will be allocated to finance infrastructure projects, health, education and agriculture. Oil revenues made up 0.5% of the education budget over the last 5 years and 99.9% of GOG funds going into compensation. What will be the sustainable funding scheme for the Free SHS policy in light of how unpredictable oil revenues can be?

c. 0.07% of oil revenue through the ABFA has been spent on education financing over the period (2012-2015), mostly on recurrent expenditure such as improving the capacity of teachers across the country, supply of teaching and learning materials to basic and secondary schools, feeding and capitation grant, BECE and SHS subsidy for examinations and scholarships. With the High infrastructure deficit and infrastructure provision heavily dependent on the GETFUND and oil revenue, what will be tradeoff between infrastructure provision and Free SHS implementation in 2017 Budget?

d.In the 2016 manifesto, the NPP government made a number of promises regarding Youth and Sport. Many of these promises involved construction, such as the construction of new stadia in the five regions that don’t currently have any, as well as establishing three sports colleges. The emphasis for achieving these promises has been on private sector participation.

e. The majority of budget allocation, an average of 88.04%, to the Ministry of Youth and Sports from 2012-2016 came from the Government of Ghana (GoG). With the planned private sector participation for financing the stadia projects, what share of budget for these agreements will come from the Government and how will this be reflected in the budget?

f. The government has made the assertion that they would like to ‘revive’ the National Health Insurance Scheme (NHIS). In the 2017 State of the Nations Address, the constant arrears that the NHIS is plagued with were cited as a challenge to providing quality healthcare to Ghanaians and an aspect that the government will take special consideration to fix going forward. In 2016, 30% of the Ministry of Health’s allocated budget of almost GHS 4.9 billion was assigned to be spent on the National Health Insurance Fund. The source of this was a statutory fund, the National Health Insurance Levy (NHIL). Given that the main issue with the NHIS is a financial issue, how will the Government uncover additional funds to rectify the issue? Would this lead to an increase in VAT, which funds the NHIL?

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Source: IMANI Africa

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The Committee noted that the government’s request became necessary due to the tight election calendar which made it difficult to come out with an Appropriation Act before the end of 2016.

This request is also in line with Article 180 of the 1992 Constitution and Section 23 of the Public Financial Management Act, 2016 (Act 921).

Among the notable expenditure budgeted for includes the compensation of employees which has been budgeted at GHc 3.8 billion.

GHc 1.8 billion will also be spent on interest payments whilst grants to other government units will cost GHc 2.3 billion.

Finance Minister, Seth Terkper noted that all the expenditure budgeted for the first quarter is for essential and statutory payments whilst all non-core expenses will be deferred to the second quarter of 2017.

Projected revenue

The Finance Ministry is projected to raise revenue amounting to GHc 8.9 billion for the first quarter of 2017, according to the Committee.

The bulk of this projection, GHc 7.2 billion, will be from taxes ranging from income and property tax to international trade taxes whilst non tax revenue is expected to be GHc 1.1 billion.

Non presentation of budget

Contrary to the expectations of many, Finance Minister, Seth Terkper, did not present the details on the floor of the House as the Bill was referred to the Finance Committee for discussion.

But a former Majority Leader in Parliament, Dr. Benjamin Kumbuor explained to Citi News, the turn of events was acceptable as the Finance Minister was just giving projections not to be accompanied by policies.

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

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