The government has placed a freeze on the hiring of civil and public servants for the 2023 fiscal year as part of measures to reduce expenditure and growing public debt.
The Cabinet Directive which takes effect from January 2023 formed part of the expenditure rationlisation of the government.
The Minister of Finance, Mr Ken Ofori-Atta, who stated this in Accra yesterday, when he presented the 2023 Budget and Economic Policy of government to Parliament, said all the Ministries, Department and Agencies (MDAs), Metropolitan, Municipal and District Assemblies (MMDAs) and State-Owned Enterprises (SOEs) were directed to reduce their fuel allocation to political appointees, heads of MDAs, MMDAs and SOEs by 50 per cent.
“This directive applies to all methods of fuel allocation including coupons, electronic cards, chit system, and fuel depots. Accordingly, 50 per cent of the previous year’s (2022) budget allocation for fuel shall be earmarked for official business pertaining to MDAs, MMDAs and SOEs,” he said.
Mr Ofori-Atta said government had also placed a ban on the use of V8s/V6s or its equivalent except for cross country travel and all government vehicles would be registered with GV green number plates from January 2023.
The Minister of Finance said limited budget would be made for the purchase of vehiclesand the purchase of new vehicles shall be restricted to locally assembled vehicles.
He said only essential official foreign travel across government including SOEs shall be allowed and no official foreign travel shall be allowed for board members of SOEs.
“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, 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,” Mr Ofori-Atta directed.
He said a freeze on new tax waivers for foreign companies and review of tax exemptions for free zone, mining, oil and gas companies would be implemented next year.
“No new government agencies shall be established in 2023. There shall be no hampers for 2022 and printing of diaries, notepads, calendars and other promotional merchandise by MDAs, MMDAs and SOEs for 2024,” MrOfori-Atta said.
He said all non-critical projects must be suspended for 2023 financial year.
The Minister of Finance said it had become more urgent for government to mobilise domestic revenue especially in times like this when access to the international capital market was largely closed.
“We urgently need to restore debt sustainability, macroeconomic stability and grow the economy. As a responsible government, we will take the hard, unpopular, but necessary decisions to build back better and emerge stronger,” he said.
“Our goal now is to significantly enhance revenues, significantly cut down the cost of running government, significantly expand local production, invest more to protect the poor and vulnerable, and continue expanding access to good roads, education and health for every Ghanaian everywhere in Ghana and the diaspora,” the Minister of Finance said.
He said government remains committed to ensuring that debt is brought to sustainable levels over the medium to long-term.
“To this end, we will implement a debt exchange programme to address the challenges identified in the portfolio in collaboration with all relevant stakeholders including the Ghanaian public, investor community and development partners,” Mr Ofori-Atta added.
The country’s total public debt as the end of September 2022, the Minister of Finance said stood provisionally at GH¢467.4 billion (US$48.9 billion), representing approximately 75.9 percent of Gross Domestic Product (GDP).
The domestic debt component, he said stood at GH¢195.7 billion, which is 31.79 percent of GDP, whilst external debt is GH¢271.8 billion, representing 44.15 percent of GDP.
“The increase in the domestic debt is largely on account of rising interest costs. Domestic debt as a share of total public debt reduced from 51.6 percent in 2021 to 41.9 percent as at end September 2022,” the Minister of Finance stated.
BY KINGSLEY ASARE