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Thursday, January 27, 2022

Ofori-Atta writes to Speaker with modifications to 2022 budget

Ken Ofori-Atta is Minister of Finance

The ruling government through the Finance Minister has written to the Speaker of Parliament, Alban Bagbin indicating some modifications to the 2022 budget.

“On the behalf of the President, I have written to the Rt. Honourable Speaker of Parliament with details of modifications in response to emerging concerns by all stakeholders including the Minority Caucus”.

In the letter addressed to the Speaker, the Finance Minister said: “After consulting with the President and also to respect his wish that these modifications address the concerns of the Minority Caucus and various other stakeholders, whilst ensuring that a deficit target of 7.4% and a positive primary balance be maintained in view of the nation’s determination to reduce our debt levels, raise adequate revenue to promote youth employment, build infrastructure ( especially our roads) and fund other government obligations, including the flagship programmes.”

Even though the budget has already been approved by the Majority Caucus, the Finance Minister claims the revisions made are in fulfillment of a promise made “to respond to the concerns of the Minority after further consultations with stakeholders, which I have now done.”

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The five areas of modification are as follows:

1. Agyapa Royalties deal; we shall amend paragraphs 442 and 443 to take out references to mineral royalties collateralization. It is important to note that, any reference to Agyapa was for informational purposes, and as such was not reflected in the fiscal framework

2. Tidal Waves disaster; In respect of the unfortunate tidal waves which rendered about 3,000 people homeless in Keta, we shall make the necessary budgetary allocations of at least GHS10 million to complete the Feasibility and Engineering studies for the coastal communities adversely affected. We will broaden the scope of the study to consider a more comprehensive solution to protect Ghana’s 540 Km of coastline, including the 149 Km between Aflao and Prampram. Meanwhile, NADMO has responded to the humanitarian crisis created by the tidal waves on the Keta coastline.

3. Aker Energy transaction; we shall amend paragraph 829 of the 2022 Budget on the acquisition of a stake from Aker Energy and AGM Petroleum by GNPC, to reflect the resolution of Parliament dated 6th July, 2021 that “the terms and conditions of the loan for the acquisition of the shares shall be brought to Parliament for consideration pursuant to article 181 of the Constitution; and

4. Benchmark values; we shall avert any hardships to importers and consumers while safeguarding the interest of local manufacturing industries to secure and expand jobs for our people. This administrative exercise, which reviewed 43 out of 81 line items, has the objective to promote local manufacturing and the 1D1F policy, including the assembling of vehicles. It is important to note that this adjustment affects only 11.4% of the total CIF value, of which 50% is for vehicles. From our analysis, the potential increase in retail prices should be relatively insignificant and therefore inflation should be muted. The YouStart policy will also support our accomplished Traders with appropriate training and access to capital to become Manufacturers in order to expand the industrial base of our society and our import substitution strategy, in line with our Ghana Beyond Aid agenda.

5. E-Levy: On the matter of the E-levy, having regard to its serious fiscal implications, we will continue our consultations with the Minority Caucus in Parliament and other relevant stakeholders, with a view to achieving consensus and reverting to the House in the shortest possible time.

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