Approval of 2022 Budget needs nationalistic approach -KON

November 24, 2021 By 0 Comments

Parliament, yesterday, commenced the debate on the 2022 Budget, which was presented to it on Wednesday, November 17, 2021, by the Finance Minister, Mr Ken Ofori-Atta. The debate, which commenced a few minutes to noon, saw the members first debating on the economic aspects of it, before moving to the other sectors of the economy, such as energy, agriculture and trade.

Some members considered to have command over the economic aspects of the Budget started the heated debate, which lasted more than four hours. Some of these members included Mr Kwaku Kwarteng, Chairman, Finance Committee of Parliament, Mr Cassiel Ato Forson, Ranking Member, Finance Committee, Mr Kojo Oppong Nkrumah, Minister for Information, and Mr Isaac Adongo, Member of Parliament (MP), Bolgatabga Central.

As expected, while members of the Majority put forth arguments as to why the budget should be approved, those in the Minority did the opposite.

The Minister for Information, Mr Kwadwo Oppong Nkrumah, who is also a lawyer, journalist and economic guru, called on his colleagues on the Minority side, whose comments on the budget since its presentation last Thursday had not been welcoming, to put politics aside and engage in a conversation based on a nationalistic approach.

Giving reasons for his call, the Minister said that employment was one of the top three issues facing the youth of the country, and the government had provided solutions in the 2022 Budget to address it, and that was what the focus should be on.

He said government had set aside GH¢1 billion to support the youth and expand the private sector, and that special attention must be paid to this. On roads and infrastructure, Mr Oppong Nkrumah opined that, an amount of GH¢16 billion has been set aside to expand Ghana’s road network and infrastructure development.

That aside, he also spoke about the fact that the budget also had interventions on how the country could deal with its public debt, while raising revenue for development, and hence called on his colleagues to support the approval of the budget.

The Chairman of the Finance Committee, Mr Kwaku Kwarteng, indicated that the Akufo-Addo government had introduced new interventions intended to help the economy recover from the shocks it experienced from the Covid-19 pandemic.

He said currently some economic trends were not sustainable and must be changed, hence, the need for Parliament to approve the budget.

Throwing light on some of these unsustainable trends, Mr Kwarteng noted that the interest rates the country paid on loans using revenues that were supposed to be used for developmental works were enormous and that a solution must be provided for it.

He noted that in 2012, for every, on 100 cedis revenue the government collected, 16 cedis of it was used to settle loan, while in 2016, 33 cedis of every 100 cedis revenue collected by the government was used to settle loans. In 2020, “for every 100 cedis revenue we collect, we use 45 cedis of it to settle loans,” Mr Kwarteng noted.

“This trend is not sustainable and that’s the reason the government has intended to deal with it by introducing new interventions in the budget.” He noted that the introduction of the Electronic levy would benefit the country by way of widening the tax net.

Mr Kwarteng, however, asserted that while the country takes steps to widen its revenue generation, it should also worry about cutting down on expenditure, and indicated that the budget had put enough interventions in place to cut down on expenditure. He spoke about the issue of sole sourcing and pay roll cleanup as some of the initiatives to cut down on expenditure.

Another intervention the Chairman made mention of was the cutting down of tax exemptions. According to Mr Kwarteng, government was working on removing tax exemptions on some goods and services, which previously enjoyed such exemptions. The Chairman believed such initiative would help the country get funds it was previously losing to such exemptions, and hinted of the Tax Exemptions Bill, which was currently before Parliament.

Mr Kwarteng also believes that the Executive arm of government was not the only machinery that had to cut down on its expenditure, and that Parliament also had a role to play.

He said: “As Parliament, not only should we be approving and supporting government in these initiatives; Mr Speaker, we, as a Parliament, must also live by example.” He asked if there were ways the leadership of Parliament could cut cost to bridge the gap between revenue and expenditure. He said the House should deal with procurement through sole sourcing.

According to Kwarteng, it was not enough for members to be out there calling out the executive to demonstrate commitment to making the economy work.

He also said it was time for Parliament to cut the number of MPs for the country. He said administration after administration created districts and constituencies, which in turn add on to the number of MPs, which in turn increased cost.

Irrespective of these arguments put forth by these astute members of the Majority, the Minority still argued against the budget, touting it as one that did not solve the problems of the economy, but rather overburden Ghanaians with more levies.

The Minority Spokesperson on Finance and MP for Ajumako/Enyan/Esiam, Mr Ato Cassiel Ato Forson, indicated that the budget was unrealistic, because the interventions in it were not achievable.

He said one of the unrealistic interventions was the tax revenue target. The MP indicated that tax revenue had been over projected, and hence cannot be achieved.

On the Electronic Levy, the man, who has been hammering on the repercussions of this levy since disclosure was made last week Thursday, opined that remittances contribute to 2.5% of foreign direct investment, and that this amount was likely to reduce should the levy take effect.

On Mobile Money, the Ranking Member indicated that many people had resorted to keeping their monies on the mobile money wallet and not in the banks anymore, and that taxing mobile money would discourage them from saving. He said the country should be encouraging savings and not discouraging it.

Supporting Mr Ato Forson’s argument, MP for Bolgatanga Central, Mr Isaac Adongo, opined that the minority’s position was intended to stop the government from imposing huge taxes on Ghanaians.

“When you come here with budget proposals that seek to break the back of Ghanaians, we must stop you. When you come with an intension to impose a tax that will kill our people,  we must kill the tax before it  kills us.”