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Government to save GH¢3.5 billion after cost cutting measures - Ofori-Atta

Ken Ofori Atta Ken Ofori Atta Finance Minister1212 Finance Minister, Ken Ofori-Atta

Fri, 25 Mar 2022 Source: atinkaonline.com

The country is expected to save an amount of GH¢3.5 billion from expenditure cutting measures to save the ailing economy.

The cost-cutting measures include a 50% cut in fuel coupon allocation for government appointees and heads of government institutions effective April 1, 2022 Finance Minister, Ken Ofori-Atta, announced the measures at a press conference in Accra.

He said discretionary spending will be further cut by an additional 10% adding that the Ministry of Finance is currently meeting with MDAs to review their spending plans for the rest of the three (3) quarters to achieve the discretionary expenditure cuts;

"These times call for very efficient use of energy resources. In line with this, there will be a 50% cut in fuel coupon allocations for all political appointees and Heads of government institutions, including SOEs, effective 1st April 2022;

“With immediate effect, the Government has imposed a complete moratorium on the purchase of imported vehicles for the rest of the year.

"This will affect all new orders, especially 4-wheel drives. We will ensure that the overall effect is to reduce total vehicle purchases by the public sector by at least 50 percent for the period.

Again, he added that with immediate effect Government has imposed a moratorium on all foreign travels, except pre-approved critical/statutory travels.

Government will also conclude ongoing measures to eliminate “ghost” workers from the Government payroll by end of December 2022.

“Government will conclude the renegotiation of the Energy Sector IPPs capacity charges by end of Q3-2022 to further reduce excess capacity payments by 20% to generate a total savings of GH¢1.5 billion,” he added.

The minister revealed that government will prioritize ongoing public projects over new projects explaining that this will enhance the efficient use of limited public funds over the period by finishing ongoing or stalled but approved projects;

Government will also reduce expenditure on all meetings and conferences by 50%, effective immediately;

“Finally, Cabinet approved that Ministers and the Heads of SOEs to contribute 30 per cent of their salaries from April to December 2022 to the Consolidated Fund; We would like to thank the Council of State in their leadership in complimenting the Government on this policy.

He added that government will liaise with Organised Labour and Employers Association to implement with immediate effect, the measures captured in the Kwahu Declaration of the 2022 National Labour.

Fuel Price reduction

The Minister said unlike in other countries where the hike in crude oil prices and exchange rate volatility are leading to shortages in the supply of petroleum products, the government is implementing measures to guarantee a constant supply of petroleum products.

To mitigate the impact of the rising price of petroleum products at the pump, for the next three months, Mr. Ofori Atta said the government has decided to reduce margins in the petroleum price build-up by a total of 15 pesewas per litre with effect from 1st April.

Details of fuel reduction are as follows:

* BOST margin reduced by 2 pesewas per litre

* Unified Petroleum Pricing Fund (UPPF) margin reduced by 9 pesewas per litre

* Fuel Marking Margin (FMM) reduced by 1 pesewa per litre

* Primary Distribution Margin (PDM) reduced by 3 pesewas per litre

The Minister explained that the reductions in margins are expected to reduce the prices of petrol by 1.6% and diesel by 1.4%.

“We anticipate that the measures taken to strengthen the currency will help further stabilize the prices at the pump,” he said.

He gave the assurance that Government will do all it can to ensure a consistent supply of fuel and manage the rate of the ex-pump price increase by ensuring that BoG has access to adequate foreign exchange.

Source: atinkaonline.com
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