Finance Minister’s update: 2022 Budget undergoes modification …govt to consult on E-levy, others with Minority, public to accommodate concerns

The Ministry of Finance has made modifications to the 2022 Budget and Economic Policy of Government to reflect concerns of the public and the minority.

Mr Ken Ofori-Atta disclosing this during a press conference on the 2022 budget in Accra yesterday, however, said the rate of the Electronic Transactions Levy (E-Levy) remained the same.

He said consultations were being done on the E-Levy, adding that the levy would not cover government services such as the LEAP.

“On behalf of the President, I have written to the Right Honourable Speaker of Parliament with details of modifications in response to emerging concerns by all stakeholders including the Minority,” he said.

Press conference on the 2022
Press conference

The Minister of Finance said about 80 per cent of the concerns of the Minority in Parliament had been incorporated in the modifications.

Mr Ofori-Atta said the proposed modifications included the Agyapa Royalties, Keta Tidal Waves, Aker Energy Transaction, and the Benchmark Values.

On the Agyapa Royalties, he said government would amend paragraphs 442 and 443 to take out references to mineral royalties’ collateralisation, stressing that “It is important to note that, any reference to Agyapa was for informational purposes, and as such was not reflected in the fiscal framework.”

On the Ketatidal waves, which recently rendered about 3000 homeless, Mr Ofori-Atta said the necessary budgetary allocation of at least GHC10 million had been made  to complete the feasibility and engineering studies for the coastal communities adversely affected.

With regard to theAker Energy transaction, he said paragraph 829 of the 2022 Budget on the acquisition of a stake from Aker Energy and AGM Petroleum by GNPC would be amended to reflect the resolution of Parliament dated July 6, 2021.

The resolution, he said stated that “the terms and conditions of the loan for the acquisition of the shares shall be brought to Parliament for consideration pursuant to article 181 of the Constitution.”

Touching on the benchmark values, the Minister said government shall avert any hardships to importers and consumers while safeguarding the interest of local manufacturing industries to secure and expand jobs for our people.

He said the administrative exercise which reviewed 43 out of 81 line items, had the objective to promote local manufacturing and the 1D1F policy, including the assembling of vehicles.

Mr Ofori-Atta said the adjustment affected only 11.4 per cent of the total Cost of Insurance and Freight value, of which 50 per cent is for vehicles. From our analysis, the potential increase in retail prices should be relatively insignificant and therefore inflation should be muted,” Mr Ofori-Atta said.

“We will broaden the scope of the study to consider a more comprehensive solution to protect Ghana’s 540 km of coastline, including the 149 km between Aflao and Prampram. Meanwhile, NADMO has responded to the humanitarian crisis created by the tidal waves on the Keta coastline,” he said.

The Minority in Parliament rejected the 2022 budget and economic policy of government because it did not address the hardship the citizens were going through.

Among others, the Minority called for the E-Levy to be scrapped and also government should make budgetary allocation for the construction of sea defence to save the residents of Keta and its environs.

“We will work with the relevant Committees of Parliament to reflect this medication in the 2022 budget as usual practice before the appropriation bill is passed.  Any other concern which may emerge shall be addressed during the discussion of the estimate of the Committees as has been the tradition,” Mr Ofori-Atta said.

The Minister of Finance indicated that the full consequences of not passing a budget were serious, stressing that “This would imply that from January 1, 2022, for government to continue to work, we will need to obtain Parliamentary approval to spend in advance of appropriation. Other than that, the entire Government would have to “shut down.”

That, the Minister said would mean,  that there would be no salaries for the almost 700,000 public sector workers, including nurses, doctors, teachers, personnel of the security services,  government services and other expenditure including payment of  contractors, uncertainties in the business environment; and pressure on the currency leading to currency depreciation.


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