It is not strange that government did not ask for more money to spend – Professor Quartey
Professor Peter Quartey, Head, Economics Division, Institute of Statistical, Social and Economic Research, University of Ghana, says it is not strange that government did not ask for more money to spend.
He said based on prevailing economic conditions, 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 short falls.
Mr 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 Jan-June 2021 on total revenue and grants amounted to GH¢28.3 billion, equivalent to 6.5 per cent of GDP, against a programmed target of GH¢32.4 billion or 7.5 percent of GDP, it shows there was a short fall, 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, 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 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 his road to be fixed and other amenities 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 government to be prudent in its spending, because the people wanted to see value for their money, urging government to block the loopholes to enable the country 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.