May 24, 2024

The Director of the College of Foundation and Professional Studies at the Pentecost University, Dr. Alexander Amo Baffuor, has described the 2024 Budget Statement and Economic Policy presented by the Minister of Finance to Parliament on Wednesday as uninspiring.

The Economist believes that the budget failed to address the policies that will alleviate the suffering of the ordinary Ghanaian in the coming year despite the tax measured that were announced by Minister Ofori-Atta.

The tax measures include zero-rated Value Added Tax (VAT) on locally produced sanitary pads for five years, import duty waivers on raw materials for local manufacture of sanitary pads for five years.

He also announced a tax-free portion of individual income tax rates to be adjusted and engaging the Ghana Medical Association on waivers for importation of vehicles as well as extend zero rate of VAT on locally manufactured African prints for two years.

Speaking to Power News on the sidelines of the Budget hearing, Dr Amo Baffuor contended that the government policies failed to capture how basic needs like food and water will become affordable for the ordinary Ghanaian.

He contended that there should have been measures on how to boost food production to reduce the hyperinflation that has resulted in the hardship the citizens as well as inhabitants of the country are grappling with.

“To me, the budget failed to tackle the neccessities of everyday life,” he disclosed and added that the policies that have helped sustained the country’s fiscal space for a while is as a result of the International Monetary Fund (IMF) and not the doing of the Akufo-Addo-led government.

“The government itself has failed to put in measures to deal with the hardship the country is facing currently,” he asserted.

GDP

Meanwhile, the Government through the 2024 Budget Statement and Economic Policy presented to Parliament is seeking approval to raise GH¢176.4 billion in total revenue and grants, equivalent to 16.8 per cent of Gross Domestic Product (GDP).

When approved and the Appropriation Bill passed, the minister of finance, who moved the motion for the budget approval, would also have the authorisation to spend GH¢226.7 billion, about 21.6 per cent of GDP, which the finance minister said was a reduction of 6.1 percentage points of GDP in total expenditures (commitment basis) relative to the outturn in 2022.

He said the large decrease came from the combination of fiscal consolidation efforts of 4.9 percentage points of GDP, reflecting an adjustment in revenue by 1.0 percentage point and primary expenditure by 4.0 percentage point of GDP.

“The potential interest rate saving from the ongoing external debt operation will further bolster public finance sustainability,” Mr Ofori-Atta told Parliament.

He said the government would extend zero-rated VAT on locally assembled vehicles for two years, grant exemptions on the importation of agricultural machinery equipment and inputs and introduce a VAT flat rate of five per cent to replace the 15 per cent standard VAT rate on all commercial properties.

 

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