The Finance Ministry has revealed that Government has suspended 20 percent of expenditure in the 2022 budget.
According to the Ministry, though Parliament has already approved government’s total expenditure for 2022, in a prudent fiscal consolidation move, government has decided to cut down its expenditure, by up to 20 percent.
Speaking at a press conference in Accra, Minister of Finance, Ken Ofori-Atta noted that the move forms part of efforts to strengthen expenditure management in 2022 and beyond.
“To ensure that the government matches all expenditure to revenue inflows, all expenditure commitments in 2022 will be adjusted to match revenue collection,” he said.
“Therefore, in accordance with Section 25 of the Public Financial Management Act (PFMA) law, the quarterly expenditure ceilings of the approved budget will include up to a 20% downward adjustment, beginning in the first quarter of 2022, in commitments across board for all covered entities benefiting from the 2022 Budget, subject to revenue performance,”, Ken Ofori Atta added.
The Finance Minister said the expenditure management by government is expected to continue from this year and beyond, amid the global impact of COVID-19 on economies.
“To ensure that government matches all expenditure to revenue inflows, all expenditure commitments in 2022 will be adjusted to match revenue collection,” he stated.
He said: “Therefore, in accordance with Section 25 of the Public Financial Management Act (PFMA) law, the quarterly expenditure ceilings of the approved budget will include up to a 20 percent downward adjustment, beginning in the first quarter of 2022. This is in commitments across the board for all covered entities benefitting from the 2022 budget, subject to revenue performance”.
The Minister said this means that Ghana’s fiscal consolidation agenda is going to be primarily driven by the expenditure side with support from additional revenue. In this regard, projected revenues in the 2022 budget will only be spent when they materialise.
Following the pandemic’s impact on the economy, the latest bold step adds to government’s announced fiscal consolidation strategies which include a focus on more internal revenue generation.
Government’s projected expenditure for 2022, which has already been approved by Parliament, was GH¢135.6billion.