Business News of Monday, 31 July 2017
Some Economists want the Finance Minister, Ken Ofori Atta, to give detailed plans of increasing revenue even as he presents a midyear budget review to Parliament today.
It comes on the back of a decision by the Ministry not to seek a supplementary budget.
For Economist, Dr. Said Boakye, the government’s inability to meet the revenue targets for the first half of the year will require revenue support to fund some critical expenditure.
He explains to Citi Business News the decision to severely cut spending on critical sectors makes a supplementary revenue inevitable.
“I think that they have to consider a supplementary budget except that the review can be detailed enough because they have not been able to meet their revenue targets and so they’re plan is off budget as at now in the sense that they have to cut spending to meet it,” Dr. Boakye asserted.
Unlike instances where Finance Ministers seek additional budgetary support in their midyear budget reviews, Mr. Ken Ofori Atta has ruled out any request for additional funding support.
Already some targets from revenue have been missed in the first half of the year.
This is also against the backdrop of declining commodity prices on the global market.
The Institute for Fiscal Studies (IFS) for instance has warned of government’s inability to meet set targets for the 2017 budget if it does not pay particular attention to reducing excess spending.
The economic think tank has suggested the effective implementation of the Public Financial Management Act (PFMA) as well as the Public Procurement Act (PPA).
Meanwhile Dr. Said Boakye believes the absence of any concrete plan to increase revenue will impact adversely on the implementation of the budget for the next five months.
“What is also taking place is that spending is being cut more than necessary and because of that arrears is building up. So if they are able to give more details to pay off arrears and others, then no problem but anything short of this, I don’t think is appropriate.”