Government's measures to reduce public expenditure in 2023

When the embattled Minister for Finance, Ken Ofori-Atta, appeared before the Parliamentarians on Thursday, November 24, he announced a raft of government plans with the view to helping to reduce public expenditure.

The 13 measures, Ofori-Atta stated will rationalise public expenditure to see sustainable development in the country.

The measures were part of President Nana Addo Dankwa Akufo-Addo's Cabinet directives that are expected to take effect from January 2023.

This decision comes after some Civil Society Organisations, CSOs, including sections of the Ghanaian public asked the government to cut down its expenditure to salvage the economy.

Ghana’s economy is under pressure, resulting in higher living costs and galloping inflation, of which the government is seeking a bailout from the IMF.

Ken Ofori-Atta as part of the 2023 budget presentation noted that the measures are “a first step towards expenditure rationalisation.”

The 13 measures are listed below:

1. All MDAs, MMDAs and SOEs are directed to reduce fuel allocations to Political Appointees and heads of MDAs, MMDAs and SOEs by 50%. This directive applies to all methods of fuel allocation including coupons, electronic cards, chit systems, and fuel depots. Accordingly, 50% of the previous year’s (2022) budget allocation for fuel shall be earmarked for official business pertaining to MDAs, MMDAs and SOES;

2. A ban on the use of V8s/V6s or its equivalent except for cross-country travel. All government vehicles would be registered with GV green number plates from January 2023;

3. Limited budgetary allocation for the purchase of vehicles. For the avoidance of doubt, purchase of new vehicles shall be restricted to locally assembled vehicles;

4. Only essential official foreign travel across government including SOEs shall be allowed. No official foreign travel shall be allowed for board members. Accordingly, all government institutions should submit a travel plan for the year 2023 by mid-December of all expected travels to the Chief of Staff;

5. As far as possible, meetings and workshops should be done within the official environment or government facilities;

6. Government-sponsored external training and Staff Development activities at the Office of the President, Ministries and SOEs must be put on hold for the 2023 financial year;

7. Reduction of expenditure on appointments including salary freezes together with suspension of certain allowances like housing, utilities and clothing, etc.;

8. A freeze on new tax waivers for foreign companies and review of tax exemptions for free zone, mining, oil and gas companies;

9. A hiring freeze for civil and public servants;

10. No new government agencies shall be established in 2023;

11. There shall be no hampers for 2022;

12. There shall be no printing of diaries, notepads, calendars and other promotional merchandise by MDAs, MMDAs and SOEs for 2024;

13. All non-critical projects must be suspended for 2023 Financial year.

PEN/SARA