A professor at the University of Ghana Business School, Mr. Patrick Asuming, has highlighted key shifts in the country’s fiscal policy as outlined in the latest budget presented by the Finance Minister.
Speaking on the budget, he noted that it signals a significant departure from previous approaches, with a focus on expenditure rationalization rather than revenue generation through new taxes.
According to Mr. Asuming, the budget marks a turning point, as for the first time in recent history, planned government expenditure for 2025 is lower than actual spending in 2024.
He described this as “quite extraordinary,” emphasizing that it indicates a deliberate move to reduce government spending and shift certain financial responsibilities to the private sector.
This shift is also reflected in the reduction of taxes while maintaining increased allocations for social protection initiatives.
“In the past, the focus was on revenue generation through new taxes, but this government is now prioritizing expenditure rationalization.
Although overall spending has decreased, more funds are being allocated to social protection programs to cushion different segments of the population from the economic difficulties of recent years,” Mr. Asuming explained.
He pointed out that the government is planning to uncap some of the restrictions placed on earmarked funds in 2024 which indicates that more resources will flow directly to statutory funds, ensuring that they are used for their intended purposes.
“At least 80% of what is due to district assemblies will now go to them. Given that many development challenges are localized, this is an important shift.
It allows for more development to take place at the local level while ensuring governance accountability,” he added.
Professor at the University of Ghana Business School, Mr. Asuming concluded that these policy shifts could have significant boost for economic growth, governance, and development, as they empower local authorities and the private sector while ensuring that social protection remains a priority.
Story by Freedom Lavoe.
