Govt will not overspend in 2024 – Abena Osei-Asare allays election year fears
Deputy Finance Minister Abena Osei-Asare has shot down suggestions that the current administration will engage in extravagant spending to boost their chances of retaining power.
The MP for Atiwa East maintains expenditure will remain within the limits of the Fiscal Responsibility Act while building on the progress of the last few years to place the country on a path of progress.
Ghana will be heading to the polls, and observers are concerned that measures targeted at growth could lead to budget overruns and unexpected outcomes such as high inflation.
However, the deputy finance minister has expressed confidence that the trend associated with election years will be reversed in 2024.
“Mr. Speaker, when it comes to our expenditure, in the past, as I said earlier, governments have used election years as auction periods, engaging in all kinds of projects to win votes, but this government is committing itself to strong fiscal consolidation and efficient management of existing commitments in order not to derail the hard-won stability that we are witnessing.
“Mr Speaker, as part of this commitment, the government is not initiating new commercial loan-funded projects,” She assured during a debate on 2024 Budget Statement and Economic Policy in Parliament on Tuesday, November 21.
The deputy minister, also a champion of gender advocacy and female education, was optimistic about the impact of the government measures.
“Government and other stakeholders met with these local manufacturers of sanitary pads – Faytex and Sunda. Through our engagements, the government has also extended the zero-rated VAT as well as the removal of import duties on raw materials used for the manufacturing of sanitary towels.
“Mr Speaker, we know that once we have done this, it will also reflect in the prices of sanitary pads in this country, and not just that, we also know that it will address a vital aspect of public health and gender equality. So, Mr Speaker, we have heeded to your voice, we have heeded to the voice of the people of Ghana, and for that, we are grateful for the support,” she said.
Government spending is projected to hit GH¢226.7 billion in 2024.
At the same time, revenues and total grants for 2024 are projected at GH¢176.4 billion, which leaves a fiscal deficit of GH¢ 50.1 billion, equivalent to 4.8 percent of GDP.
The expenditure represents 21.6 percent of the country’s Gross Domestic Product (GDP).
This projection also reflects a 6.1 percentage point GDP reduction in total expenditures (commitment basis) relative to the outturn in 2022.
The 2024 budget presented to parliament explained, “This large decrease comes from the combination of fiscal consolidation efforts of 4.9 percentage points of GDP, reflecting an adjustment in revenue by 1.0 percentage points and primary expenditure by 4.0 percentage points of GDP. The potential interest rate saving from the ongoing external debt operation will further bolster public finance sustainability”.