Government pledged to cut 30% of expenditure but spent almost GH¢90 billion – Bright Simons

Vice President of IMANI Africa, Bright Simons, has disclosed that despite the government’s pledge to cut 30% of its expenditures, it has spent close to GH¢90 billion in the last 9months of 2022. The finance minister in April this year announced a 30% cut in the salaries and expenditures of government appointees to cushion Ghanaians from the harsh economic conditions. Even though the Minister has not fully disclosed the implications of this measure, Bright Simons stated that the act has not yielded much. In his article titled, “Ghana should not set up the IMF to fail”, he explained that “the key driver of inflation in Ghana is self-evident in fiscal policy.” He said “in the first 9 months of this year, the government earned 51.5 billion GHS in income. Despite pledges to cut 30% of discretionary expenditures, it ended up spending nearly 90 billion GHS. This is despite escalating arrears (that is to say refusal to pay many overdue bills).” He also noted that due to the country’s inability to borrow from the international market, “it has resorted to borrowing 41.2 billion GHS to plug the gap (fiscal deficit) and pay interest and principal due on debt.” Bright Simons further reiterated that the government’s statement that the Russia-Ukraine war is to blame for the country’s crisis is ill-founded since Ghana is not directly related to these countries in terms of trade. “Blaming the Russia-Ukraine conflict would only add up if Ghana were exceptionally exposed to that region. Fortunately, on many indicators such as trade and investment, Ghana is not even among the top 20 African countries with high levels of exposure. How then is inflation in Ghana the fastest rising in Africa behind only Sudan and Zimbabwe?” he asked. Watch the latest episode of BizTech below: SSD/FNOQ