The government has placed an immediate ban on the purchase of imported vehicles for the rest of the year.
The move is expected to help reduce government reliance on the importation of vehicles by 50%.
It also forms part of measures announced by Finance Minister Ken Ofori Atta to cushion Ghanaians through the country’s current economic challenges.
At a presser on Thursday, 24 March 2022, the sector minister said, “With immediate effect, the government has imposed a complete moratorium on the purchase of imported vehicles for the rest of the year”.
“This will affect all new orders, especially 4-wheel drives. We will ensure that the overall effect is to reduce total vehicle purchases by the public sector by at least 50 per cent for the period.”
Mr Ofori Atta also announced a ban on foreign trips by government officials.
“Again, with immediate effect, Government has imposed a moratorium on all foreign travels, except pre-approved critical/statutory travels,” he added.
The government is embarking on these measures due to economic challenges attributed to global occurrences, such as the COVID-19 pandemic and the Russia-Ukraine conflict.
But some experts have expressed opinions that better management of the country would have saved the country from adverse impact.
According to the Ghana Statistical Service (GSS), Ghana’s consumer price inflation hit 15.7 per cent year-on-year in February from 13.9 per cent in January this year.
In March 2021, the Finance Ministry indicated that the government had spent GH¢19 billion on the COVID-19 fight.
It also clarified that GH¢1.7 billion was spent on the COVID-19 Alleviation Programme (CAP1) and Emergency Preparedness and Response Plan.
There is pressure on the government due to rising public debt estimated to be GH¢351.8 billion as of the end of 2021, an increase by GH¢60.2 billion from the same period in 2020, according to the Summary of Economic and Financial data released by the Bank of Ghana in March 2022.
Meanwhile, total revenue mobilised within the period stood at 15.4 per cent of revenue, with tax rating registering a paltry 12.6 per cent of GDP, far below the regional average.
Even though crude oil supply bottlenecks have caused a surge in prices on the international market, the depreciation of the Ghana Cedi against other major currencies has worsened the situation.
In addition to the ban, there will be a 50% reduction in fuel coupon allocations for all political appointees and heads of government institutions.
The new directive will continue till December 2022.
Find below the other measures announced by the government:
- The government plans to cut discretionary spending by an additional 10 per cent. The Ministry of Finance is meeting with Ministries, Departments and Agencies to review spending plans for the rest of the year.
- There will be a 50 per cent cut in fuel coupon allocation for all political appointees and heads of government institutions to ensure efficient use of energy resources. This measure is effective 1 April, 2022. Fuel coupons normally account for over GHS 60 million, according to the Finance Minister.
- The government plans to conclude measures to eliminate ghost workers from the government payroll by the end of 2022.
- The government hopes to conclude renegotiation of the Independent Power Producer capacity charges by the end of the third quarter of 2022 to further reduce capacity payments by 20 percent to generate total savings of GHS1.5 billion.
- Moratorium on the establishment of new public sector institutions by the end of April 2022
- Prioritise ongoing projects over new projects to enhance the efficient use of limited public funds by finishing ongoing or stalled projects
- The reduction of expenditure on all meetings and conferences by 50 percent.
- Pursue re profiling strategies to reduce the interest expense burden on the fiscal.
- The government also plans to liaise with organised labour to implement measures in the Kwahu declaration of the 2022 National Labour Conference. These include reforms towards addressing salary inequities.
- Ministers and the Heads of SOEs will also be contributing 30 percent of their salaries from April to December 2022 to the Consolidated Fund.