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HomeNewsGovernment working on several fiscal measures to strengthen the economy-Richard Ahiagbah

Government working on several fiscal measures to strengthen the economy-Richard Ahiagbah

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The Communications Director for the New Patriotic Party (NPP), Mr. Richard Ahiagbah has disclosed that, as part of the plans to insulate the economy against future exogenous shocks and pressure, the Government of President Akufo Addo is working on several fiscal measures to strengthen the economy, unlike the NDC who are without ideas but are always making noise.

He made this known at a press conference to marks the first in a series of bi-weekly Press Updates the Communication Directorate has planned to give this year, 2023.

“To boost our forex reserves, the Ministry of finance is working assiduously with the leadership of parliament to carve a domiciliation policy which will compel extractive companies to repatriate all forex earned from the sale of natural resources on the global commodity markets to the country. Nigeria has done it under its Local Content Development and Monitoring Board”.

 

The government he indicated, is putting measures in place to pass the tax exemption bill into law and also, review the free zones area policy to plug leakages and abuses. “Plug revenue leakages, especially within the extractive sector, focusing on the misdescription and underreporting of imports”.

Other measures underway is to ecure the country’s borders to forestall the smuggling of taxable goods, deepening ongoing digitalization efforts, enhance Domestic revenue mobilization by increasing efficiency in tax collection i.e.eliminate human interface in tax collection, strengthen the enforcement and monitoring regime of E-commerce, betting and gaming.

The rest include, addressing off-budget expenditures by making sure all government expenditures go through GIFMIS, enforce commitment controls within the various ministries, i.e., eliminate unauthorized expenditure as well as ensure that MDAs do not sign contracts without an approved budget and, establish inter-sectorial working groups to address cross-cutting issues; review contracts and ensure standard reporting among ministries.

Below is the full press statement:

PRESS CONFERENCE BY THE NEW PATRIOTIC PARTY ADDRESSED BY THE NATIONAL COMMUNICATIONS DIRECTOR, RICHARD AHIAGBAH, FEBRUARY 8, 2023.

INTRODUCTION

1. Good afternoon and thank you for coming. Today’s meeting marks the first in a series of bi-weekly Press Updates the Communication Directorate has planned to give this year, 2023. The Press Update will provide the opportunity to address Ghanaians directly with the issues that have taken space in the media over the period. So, we look forward to welcoming you to the HQ of our party every fortnight.

2. Today’s briefing will address the following issues:

a. The NDC Promise of Electoral Violence

b. Auditor General’s Report—COVID-19 expenditure

c. Gold for Oil Program

d. The Domestic Debt Exchange

A. The NDC Promise of Electoral Violence

3. Friends from the media, there is a video circulating on social media in which the Suame Youth Organizer of the NDC boldly outdoors the NDC’s violent plot to engage the 2024 general elections. Please let’s watch the video

4. We will not discount this as vain talk; This individual is coherent and clearly appears to know and understand what he is saying and what outcome he expects.

5. It is dangerous, to put it mildly.

6. Ladies and gentlemen, what is more dangerous, perhaps, egregious is the NDC’s failure to condemn and dissociate itself from the statement but rather rationalize it. We cannot accept this as an ordinary misguided statement because, as I indicated earlier, he is too coherent not to be taken seriously.

7. Besides, we believe his threats are not in isolation. He is inspired by the NDC’s presumptive leader, former President Mahama, who has publicly touted the NDC’s credentials: “NDC has revolutionary roots, and when it comes to unleashing violence, no one can beat us to it.”

8. Indeed, former President Mahama and the NDC demonstrated this through their actions after he lost the 2020 Presidential elections. He held press conference after press conference and misled Ghanaians that the election had been stolen, and ordered thousands of unsuspecting party youths into the streets around the country, burning markets, attacking innocent citizens and destroying and vandalizing public property (Let’s watch the video). Even their MPs participated in the orgy when they stormed the EC headquarters. But for the vigilance of the police, there might have been bloodshed.

9. Former President Mahama did not stop there. He went on to freely assault the integrity of the Supreme Court. (Let’s play the video)

10. Ladies and gentlemen, we have now been told by the Chairman of NDC and Gen Secretary at the time, Mr Asiedu Nketia, what the NDC knew at the time— that former President Mahama lost the election. They all knew it, but they wanted “King Solomon to cut the baby into two” (Play Gen Mosquito voice note/Video)

11. Remember the Muntie 3? When they were jailed, NDC ministers and top officials formed a queue to ask for their pardon, and former President Mahama freed them from prison. This is the party whose leaders oversaw the slaughter in 1982 of three judges and a military officer.

12. We believe this NDC Youth Organizer did not speak in isolation or misspoke. He is clear-eyed. His remarks reflect the culture and ethos of the NDC. We expect the police and the courts to bring this Suame NDC Youth to Justice very quickly to deter others who might be harboring similar violent and delinquent thoughts in the NDC.

13. We demand the NDC to unreservedly disavow, disassociate and expel this Youth organizer without delay.

14. Nothing short of this will suffice.

B. 2022 Auditor General’s Report & Matters Arising

15. The Auditor General’s report on the Covid-19 expenditure between March 2020 to June 2022 raised two key issues:

●It creates a false impression of wrongdoing concerning the expenditure of some GH¢10billion of the Covid Response fund on activities unrelated to Covid-19.

● It flagged some infractions with the GH¢11.8billion supposedly spent on Covid-19 activities.

16. Friends from the media, Covid-19 impacted the entire economy. We all went through it, and you recall the historic shutdown of the economy that locked us in our rooms or houses for weeks. The deadly Covid-19 together threatened everything about our being as people, our lives, and our livelihoods.

17. The funding sources for the Covid-19 Response fund did not stipulate what direct activities to spend the monies on except to state that for budget support or Covid-19 preparedness and response support. This is because lives and livelihoods are inseparable. Therefore, a government is expected to do everything to protect its people, and that was precisely done in Ghana. We are all witnesses to it.

18. Friends from the media, you recall the globally acclaimed view of President Nana Addo Dankwa Akufo-Addo; we know how to bring back the economy but do not know how to bring human beings back to life. In essence, President Akufo Addo was committing his government to do whatever it took to preserve lives and livelihoods.

19. The lives and livelihoods of Ghanaians are inextricably linked. There cannot be anything unrelated about budgetary support to a sector to protect livelihood in a fight to save lives. Therefore, it is inconceivable that the Auditor General would elect to disaggregate the expenditure of the GH¢21.8 billion Covid-19 Fund.

20. The infractions flagged in respect of the GH¢11.8billion must be pursued and recovered where wrongdoings are established. However, we have observed some audit protocol breaches in the case of some MDAs, which has led to some expenditures being flagged.

21. It is important to highlight these procedure breaches because failure to do so sustains a false impression of wrongdoing.

22. Friends from the media, the $120 million expended through the UNICEF/AVAT platform to procure some 16.9 million Jensen & Jensen vaccines should not have been flagged, given effective communication. This would have come to light if officials had worked diligently. As it turned, the Ministry of Health has agreed to a delivery schedule tied to the domestic uptake of the vaccine. Therefore, the $81 million flagged by the auditors is not lost to the state, and everybody knows.

23. The infraction cited against the Ministry of information, which the NDC appears to be harping on, is a product of a breach of the regular audit procedure. Ideally, the audit service would typically organize an exit conference to discuss their findings and allow the agency to clarify where necessary. However, this was not done.

24. In the said letter, the Ministry provided a detailed explanation to justify the expenditure cited by the auditors. But the truth would not matter now because the NDC will continue to reference this infraction in their communications as though it is true. At least you know the truth, so please correct them.

25. Friends from the media, what is the NDC saying about the Auditor General’s Report and the infractions thereof? What is their record in this arena?

26. Let’s cast our mind back to the 2016 Auditor General’s report under former President Mahama, where the Auditor General uncovered rots of incomparable magnitudes.

27. Let me mention a few:

a. Payments outside GIFMIS –The review of Government of Ghana transactions sampled and validated by the Auditor General’s report in 2016 showed that the Ministry of Finance released a total of GH¢56.4 million to the Electoral Commission (GH¢29.9 million) and the Ministry of Youth and Sports (GH¢26.43) who also processed it to their suppliers outside the GIFMIS platform contrary to Section 25(6) of the PFM Act. Section 25(6) of PFM Act requires that all Government of Ghana commitments are captured and processed on the GIFMIS without exceptions.

b. Overspending of budget allocation without approval: A review of the 2016 financial Statements also disclosed that some three (3) MDAs, namely the Ghana Education Service exceeded its budget allocation by Ghc1.7billion; the Ghana Health Service by Ghc385.1 million; and the Ministry of Finance exceeded their budget allocation by Ghc33.5 million.
c. 1,245% increase in Office of Government Machinery expenditure: In 2016, the initial allotted budget for the Office of Government Machinery was Ghc768.2 million. However, a revised budget in the same year saw the initial allotted amount increase from Ghc 768.2 million to Ghc 3billion. Furthermore, the 2016 Auditor General’s report on pages 21 and 22, revealed that the revised amount of Ghc 3billion was overspent more than Ghc 3.1billion bringing the total amount spent on Office of Government Machinery in 2016 to GHc6, 103, 994, 114 billion.

28. What makes these NDC infractions baffling is that they did not occur in an emergency, where they had to choose between life or death, as in the case with Covid-19 expenditure. This is the NDC’s record, and we have not forgotten it.

29. What we need is not blame but solutions to help make public funds deliver more for Ghanaians. To be credible, ladies and gentlemen of the media, you must hold the NDC to make examinable commitments for discussion.

C. Gold for Oil Program (G4O)

 

30. Ladies and Gentlemen of the media, as you may be aware, the Gold for Oil Program is a landmark policy initiative by the government to support the import of petroleum products using the Bank of Ghana (BoG) Domestic Gold Purchase (DGP) Program. It is designed to ease the constant pressure on the cedi and help lower the price of petroleum products for Ghanaians.

31. The G4O Programme has positive economic implications because a stable cedi means stable prices and a lower cost of living. We commend Vice President Dr Mahamudu Bawumia and all the agencies working to implement this initiative. We recognize the tireless effort of the Ministry of Energy and its agencies for their hard work.

32. The G4O Programme is an excellent initiative, but the NDC exist in Ghana, so we cannot take anything for granted. They have raised some questions about the mode of transaction. Friends, there are two modes of transacting under the G4O program—barter and broker.

33. Under the Barter Channel, Bank of Ghana will provide an equivalent volume of gold to suppliers willing to accept gold in direct exchange for petroleum products. The bank and the International Oil Trading Companies (IOTCs) must open Gold Metal Accounts in a mutually agreed-upon gold refinery for the gold transfer.

34. Under the Broker Channel, Bank of Ghana enters a Gold Supply Agreement in which it sells gold to a gold broker for forex cover to pay for petroleum products.

35. The Gold Broker then purchases gold and deposits the proceeds in the gold holding account at Bank of Ghana.

36. On receipt of the final invoice from BOST, Bank of Ghana transfers the funds from a gold holding account to an Escrow Account to pay for the petroleum product shipment.

37. Ladies and Gentlemen, we have received the shipment of about 41,000 metric tonnes of diesel, 10% of our monthly requirement. Officials project supply up to 200,000 metric tonnes, about 50% of our monthly needs by March 2023.

38. So, let’s disregard the NDC’s damping on this great initiative and support the government to do more for us.

D. The Domestic Debt Exchange Program

39. On December 5, 2022, the Government of Ghana announced the voluntary Domestic Debt Exchange Program as a debt sustainability measure to exchange about GHS137 billion worth of Government bonds, E.S.L.A. Plc bonds and Daakye Trust Plc bonds, for a package of twelve new bonds, which are currently being issued.

40. Friends from the media, the Debt Exchange is an invitation by the government for eligible bondholders to participate in a bond swap voluntarily. The debt exchange allows the government to extend the maturity of bonds and lower the average coupon rates to create fiscal space to bring the debt-to-GDP ratio to the stated 55% by 2028.

41. The government has acknowledged the difficulties of this inevitable debt operation to bring our debt to sustainable levels. This acknowledgement is reflected in the willingness of the government to engage and accommodate the proposals that have come from the various stakeholders. In addition, the government targets aggressive fiscal consolidation and enhanced revenue measures to ensure that the economy stabilizes quickly.

42. Strong evidence of the fiscal adjustment and revenue measures are captured in the 2023 budget. The budget proposed more than thirteen consequential cuts:

(a) MDAs, MMDAs and SOEs have been directed to reduce fuel allocations to Political Appointees and heads of MDAs, MMDAs and SOEs by 50 percent

(b) A ban is placed on the use of V8s or its equivalent except for cross-country travel

(c) Only essential official foreign travel across government, including SOEs, shall be allowed

(d) Meetings and workshops should be held within the official environment or government facilities

(e) Government-sponsored external training and Staff Development activities at the Office of the President, Ministries, and SOEs have been put on hold

(e) A reduction in the size of all convoys

(f) A freeze on tax waivers for foreign companies while tax exemptions for companies in the free zone will be reviewed, including mining, oil and gas companies

(g) Moratorium is placed on the creation of new government agencies

(h) No Ministry, Department or Agency, including SOEs, is permitted to use public funds for the purchase and distribution of hampers

(i) There shall be no printing of diaries, notepads, calendars, and other promotional merchandise by MDAs, MMDAs and SOEs

(j) All non-critical projects that can wait for a year have been suspended

(k) Expunged “ghost” names from Payroll through periodic payroll audits and link Ghana Card to the Payroll

(l) A moratorium on bonus payment for SOEs that post losses in the year for which the bonus applies.

43. These measures will positively impact the deficit for the fiscal year. In addition to the expenditure rationalization, the revenue scope is being widened to leverage property tax and enhance the collection.

44. Friends from the media, this government has its skin in the game. There is certainly room to canvass for government to deepen the quality of public expenditure, but it cannot be said that the government has not stepped up to the plate.

45. Our sincere plea is that Ghanaians would continue to support this NPP government because we have demonstrated that we can regenerate the economy.

46. You recall the record turnaround of the poor economy this government inherited from the NDC in 2017—3.4 percent GDP.

47. The NPP government recorded an impressive 7% average GDP growth for three fiscal years—2017, 8.2%; 2018; 6.5% and 2019; 6.6%.

48. This is the record we pray Ghanaians to have confidence in and support. The NDC has no solutions and cannot make difficult decisions when necessary. The NDC always kicks the can down the road for the NPP to fix it.

49. For example, the banking sector. The NDC collapsed it and created a false sense for the actors that government would always provide liquidity support to aid the unprofessional behavior of the misfits in the sector.

50. The NDC’s only hope for winning the 2024 general elections is a prayer for bad economic news for Ghana. We cannot give the NDC the pleasure of riding on the pain brought on by the twin factors of—Covid-19 and the Russian-Ukraine War to power. (Show Sammy’s tweet).

THE WAY FORWARD

Friends from the media, unlike the NDC, the NPP is not without ideas going forward. As part of our plans to insulate the economy against future exogenous shocks and pressure, the government is working on several fiscal measures to strengthen the economy:

51. Domiciliation Policy: To boost our forex reserves, the Ministry of finance is working assiduously with the leadership of parliament to carve a domiciliation policy which will compel extractive companies to repatriate all forex earned from the sale of natural resources on the global commodity markets to the country. Nigeria has done it under its Local Content Development and Monitoring Board.

52. Pass the tax exemption bill into law

53. Review the free zones area policy to plug leakages and abuses

54. Plug revenue leakages, especially within the extractive sector, focusing on the misdescription and underreporting of imports

55. Securing our borders to forestall the smuggling of taxable goods

56. Deepening ongoing digitalization efforts

57. Enhance Domestic revenue mobilization by increasing efficiency in tax collection i.e.eliminate human interface in tax collection

58. Strengthen the enforcement and monitoring regime of E-commerce, betting and gaming

59. Address off-budget expenditures by making sure all government expenditures go through GIFMIS

60. Enforce commitment controls within the various ministries, i.e., eliminate unauthorized expenditure as well as ensure that MDAs do not sign contracts without an approved budget

61. And finally, establish inter-sectorial working groups to address cross-cutting issues; review contracts and ensure standard reporting among ministries.

Thank you for your attention!

 

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