An economist with the Institute of Statistical Social and Economics Research, (ISSER), University of Ghana, Professor Peter Quartey says it is not strange that the government did not ask for more money to spend.
He said based on prevailing economic conditions, the government could ask for more money to spend or stay put.
Prof Quartey, reacting to the 2021 Mid-year fiscal policy review of the budget statement and economic policy of the government presented to Parliament, said looking at the revenue targets it would be realised that there were some shortfalls.
Ken Ofori-Atta, Minister of Finance, presenting the budget to Parliament said, “I am not here today to ask for more money. I have not come to ask for more taxes. I have come to update the House on the performance of the economy for the first half-year of 2021 and our plans for the unexpired term of the year, consistent with section 28 of the Public Financial Management Act.”
Looking at the provisional fiscal data for January to June 2021 on total revenue and grants amounted to GHC28.3billion, equivalent to 6.5% of GDP, against a programmed target of GHC32.4billion or 7.5% of GDP, it shows there was a shortfall, he said.
“You cannot spend what you do not have, especially if you have not raised enough revenue in the first two quarters of the year,” he said.
Prof Quartey said based on the sentiments from the business community regarding the already introduced taxes in May 2021 it was not needed to introduce new taxes, indicating that there was money but not additional money to be spent.
He said, “if in May 2021 new taxes were introduced, the government need not ask for more revenue in the pandemic era.”
The economist said it might take a while to realise more revenue to enable the minister to ask for more money to spend.
On borrowing, he said it would have been unusual for the government to ask permission to borrow, giving the country’s debt to GDP, which was high already.
“In a pandemic, it is unacceptable to borrow but rather you spend,” he said.
He said as a Ghanaian, “I would expect my road to be fixed and other amenities are taken care of but in an era of recovery from a pandemic it would take some time,” urging Ghanaians to be modest in their expectations.
He called on the government to be prudent in its spending, because the people wanted to see value for their money, urging the government to block the loopholes to enable the country to get more revenue and minimize wastage and corruption in the system.
Prof Quartey called on Ghanaians to perform more participatory roles and pay their taxes to ensure that revenue came in for spending.
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