Be ready to face a massive financial crunch - Dr Ashong

The COVID-19 pandemic has caused agony beyond measure for the multitude and has pounded Ghana’s economy as well.

The country is reeling under a massive financial crunch. In view of the prevailing scenario, the finance ministry says that the employees of Public Sector Undertakings will not be receiving huge wage increments from 2021 to 2024

According to Dr. Samuel Nii Noi Ashong, adviser to the Ministry of Finance currently there is a paucity of funds due to which the Ministry cannot approve any raise in the salaries of those working for PSUs and money is being channelized to support other segments.

Dr. Noi Ashong said, “If you look at the prevailing conditions, COVID-19 is not expected to abate till the end of 2023 and we looking at tightening our belts for a while. You’ll understand that wage increments and compensations cannot be granted for the people. If we net out all the mandated transfers which are required by law, talk of GET fund transfers, National Health Insurance and District Assembly Common Fund (DACF). The balance funds are not enough to bear expenses, particularly towards wages and salaries, goods and services and social intervention programmes”.

Meanwhile, the caretaker finance minister, Osei Kyei-Mensah–Bonsu has disclosed that the Akufo-Addo administration intends to introduce a COVID-19 health levy of 1% on Value-Added Tax (VAT) as part of its measures to rebuild the economy.

The government is intending to collect 72 billion cedis for the fiscal year 2021 and 90% of the money will go for interest payment on loans, leaving almost nothing for development.

He said that the administration will further introduce the Flat Rate Scheme and a 1% National Insurance levy as part of its recovery measures.

He said the levy will be used for the procurement of vaccines and for the establishment of 14 medical waste treatment facilities across the country.