Former Deputy Minister of Finance, Cassiel Ato Forson says government’s mid-year budget review which was presented by the Finance Minister, Ken Ofori-Atta at Parliament on Monday, July 31, 2017, brings nothing but bad news to Ghanaians.
Speaking in an interview with GhanaWeb, Ato Forson described the NPP’s ‘Asempa’ budget as ‘Asemboni’ budget stressing that government has failed to achieve its revenue target.
“It is a complete revision of a budget that was christened ‘Asempa’ budget to ‘Asemboni’ budget. It is bad news; bad news is what the Finance Minister communicated to us today”, he indicated.
The Finance Minister, Ken Ofori-Atta presented government’s economic performance in the Akufo-Addo led government as required by law. In the presentation, he revised some of the targets in the budget statement and accepted it could not collect as much revenue as it had targeted.
The Minister explained lower revenues were recorded because of low import volumes and a slower rate of economic activity which led to lower revenues from income taxes. He also noted that revenue to have accrued from taxes on Income and Property, International Trade and Domestic Goods and Services fell short by 47%, 33% and 20% respectively. Also, because government could not collect enough, it reduced spending hence missing an expenditure target of 16.7% as it missed its total revenue and grants target by 14.9%.
But the former Deputy Minister of Finance, Ato Forson in his explanation as to why the ‘Asempa’ budget is bad news for the economy outlined three solid points to back his claims which focused on revenue, expenditure and capital.
He quizzed what will drive the economic output of this country if government fails to achieve its revenue target.
“The Finance Minister in presenting his mid-year review that all of a sudden moved from a motion to a statement, he informed this honourable house that revenue is going to be revised downwards by end of year by approximately GHC2.1bn. He is saying that he’s going to revise non-tax revenue by GHC600m downwards. Simply put, the government would not be able to achieve its revenue target; Bad news”.
“Another bad news; bad news is that the economy on the expenditure side clearly, the government is saying that compensation in as much as that they are paying government sector workers, they are going to cut down the goods and services budget and what it means is that you will pay the workers but they would not be able to have enough money to run their activities. Output zero”.
“Bad news in the sense that capital expenditure as a percentage to GDP 2016 was 4.6. 2015 they are revising it down from 3.5 for the main budget to almost 3% of GDP. Bad news, they are cutting it down, capital expenditure is coming down to a level that is scary. What is going to drive the output of this economy”, Ato Forson quizzed.