New regions to cause budget distortions if … – Economist warns

Economist Dr. Joe Amoako -Tuffour has cautioned Finance Minister Nominee, Ken Ofori Atta on the need to find sustainable funding for the proposed new regions to be created by the NPP government.

He contends the country risks huge financial challenges should government fail to align its revenue with expenditure with the additional regions.

“…The rising fixed cost of government is largely the making of politicians. For instance, the creation of an additional 46 district assemblies and 45 new parliamentary seats in 2012, ratcheted up the fixed cost of government…”Dr. Amoako-Tuffour opined.

President Akufo- Addo during the announcement of the Nominee for the Ministry for Regional Re-organisation and Development indicated the creation of four new regions to facilitate the devolution of power.

“the four regions that we have chosen are those that we want to reshape and create new regions out of them. We’re talking about the Western North region which I committed myself to and the manifesto also committed itself to, the creation of the Ahafo region out of the Brong-Ahafo, another express commitment on my part and backed by the manifesto, the northern region.”

But in an open letter to Ken Ofori Atta, Dr. Amoako -Tuffour also the Director of Research at the African Center for Economic Transformation explained that previous experiences with the creation of additional 46 district assemblies and 45 new parliamentary seats in 2012, increased the fixed cost of government as much thought was not given to what those actions meant for public finances.

“The cost of government was brushed aside by a premature exuberance about the coming oil revenues. The 1992 Constitution lacks the mechanism to ensure a fine balance between political expediency and fiscal sustainability,” the open letter stated.

At the time, each of the 46 districts was given GHc100,000 to purchase equipment and furniture.

Meanwhile the economist has advised on managing government’s expenditure.

Some of the suggestions are to reduce ghost names payroll fraud which is prevalent in the education health as well as judicial sectors.

In addition, Dr. Tuffour has appealed to Mr. Ken Ofori Atta to make good of Auditor-General’s reports that expose acts of ‘misappropriation, waste and embezzlement and the disregard of the provisions of public financial management.’

By: Pius Amihere Eduku/citibusinessnews.com/Ghana

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