Finance Minister, Ken Ofori Atta will on Thursday present the Nana Akufo-Addo-led government’s maiden budget statement, a presentation that will ultimately be a marker of the new administration’s policy priorities.
Ahead of the presentation, expectations are high as policy analysts, the opposition National Democratic Congress and the curious Ghanaians hope to see how President Akufo-Addo and his team fund its numerous ambitious campaign promises while ensuring fiscal discipline at the same time.
Ken Ofori-Atta’s presentation, which will map out the plan for revenue generation and expenditure for the year, is also expected to lay out key reforms the new government would be rolling out to deal with the country’s numerous challenges: high debt levels, declining growth levels, increasing budget and fiscal deficits, unemployment, among others.
A statement from Mr Ofori-Atta’s Ministry has indicated that the budget will focus on stimulating growth and job creation, through private sector development.
”The Budget will include measures to restore fiscal discipline and good economic governance, transparent and accountable use of public resources in accordance with the new Public Financial management law and to provide a credible basis for economic policy clarity going forward” the statement from the Finance Ministry said.
Other sectors that the budget will focus on include the power, education, health, agriculture. infrastructure and the private sector.
For the private sector, a key move by the current government will be to fulfil its promise to cut taxes in a bid to accelerate the growth of the sector.
The Special Import Levy, the 17.5% VAT on imported medicines not produced in the country as well as the 17.5% VAT on Financial Services, 17.5% VAT on domestic airline tickets as well as the 5% VAT on Real Estate sales would have to be scrapped off if government’s promise to remove tax burdens will be fulfilled.
Import duties on raw materials and machinery for production within the context of the ECOWAS Common External Tariff (CET) Protocol, reduction of corporate tax rate from 25% to 20%, review of VAT for micro and small enterprises from the current 17.5% to the 3% Flat Rate VAT, will also be on the ‘hit list’.
Economic growth decline and fiscal challenges caused the previous administration to go to the International Monetary Fund (IMF) for assistance, and it today’s budget is expected to reveal how the current government intends to proceed.
During his first State of the Nation Address, the President painted a gloomy picture of the economy, reiterating among others earlier reports by the Finance Minister, that the country’s current debt stock had ballooned to GH¢122 billion, leaving Ghana’s debt stock at 74% of GDP.
The current budget should do a thorough job of showing how the President intends to ameliorate the country’s challenges and put the economy on the road to progress.