As government prepares to deliver the 2020 mid-year budget review later today, Thursday, policy think tank, IMANI Africa wants the government to account for the savings made from the 2020 budget due to the COVID-19 pandemic.
According to the think tank, there is a need for the government to account for potential savings made due to the re-alignment of spending priorities arising from the pandemic.
In a statement IMANI Africa said: “More pressingly, government should in the conversation following the presentation of the supplementary budget account for the money it ‘made’ from these creative adjustments even as it asks for more money. The diversion of spending from dispensable areas to stimulus and mitigation should have been deliberate and clever to have the right effect, and we want to know more”.
IMANI Africa noted that its preliminary analysis shows that these fiscal adjustments should have yielded about GHS3 billion in “freed resources”.
“For example, the extant budget indicates a total amount of budgeted expenditure for goods and services, capital expenditure and government flagship programmes of GHS19,871,033,229 prior to COVID, representing 20.27% of the entire budget for the year 2020. This amount can be broken down into GHS7,763,668,451, representing 39.1%, for government flagship programmes; GHS8,330,827,244, representing 41.9%, for goods and services; and 3,776,538,534, representing 19%, for capital expenditure.”
“In short, even limited sensitivity analysis and financial modelling performed on only parts of the overall budget led to savings of GHS3,567,326,880, representing 17.95% of the affected outlay, from initially planned expenditure, which with limited fiscal management savvy must have been generated,” IMANI Africa added in its statement.
The policy think tank argued that it would be disappointing if the Minister of Finance makes no effort to explain clearly how the “Government has taken advantage of the pandemic to restructure certain expenditures, eliminate waste, rationalise many commitments, freed up resources, and more effectively utilised the savings thus generated in a creative effort to overcome the many woes he is sure to lament about tomorrow.”
Finance Minister presents budget review today
Finance Minister, Ken Ofori-Atta will later today, Thursday, July 23, present the 2020 mid-year budget review and supplementary estimates for the financial year in Parliament in accordance with Section 28 of the Public Financial Management Act, 2016 (Act 921).
This particular presentation will highlight the government’s plan on how the country is to recover from the shocks of the economy due to the withdrawal of advanced monies from the Contingency and Stabilisation Funds following the COVID-19 pandemic.
Mr. Ofori-Atta is also expected to use the opportunity to review some of the key macroeconomic targets announced in the 2020 budget read last year.