Finance Minister Ken Ofori-Atta, on Wednesday, November 15, presented the much anticipated 2024 budget statement and economic policy of the government.
The budget has been released at a time when Ghanaians are facing hardships, although there is a consistent decline in inflation.
The sector minister believes the budget will provide the pathway towards fiscal consolidation and macro stability.
He hopes the budget will also set out a new debt sustainability path after the excruciating domestic debt operations with after-shocks on the financial sector.
Here are some key highlights from the document dubbed: ‘NKUNIM’ budget.
- GH₵220 million for Akosombo Dam Spillage victims
The government has budgeted an amount of GH₵220 million to support victims of the Akosombo dam spillage.
Additionally, relief items such as drinks, mattresses, mosquito nets and coils, clothes, baby food and diapers, treated water services, and solar lamps, among others, have already been distributed to victims.
The sector minister also disclosed that the team has requested funding from the World Bank under the IDA Crisis Response Window (CRW) to support the resettlement of the victims, restoration of livelihoods, compensation and reconstruction of infrastructure in the affected communities.
It will be recalled that the controlled spillage from the Akosombo and Kpong Dams, initiated on September 15, 2023, became necessary due to heavy rainfall in the Volta River catchment, causing a rapid rise in the water level in the Akosombo Dam.
This measure was taken to prevent overtopping and to protect the dam’s integrity.
As of early October, the water level rose rapidly, surpassing the maximum operating level of 276 feet.
Consequently, the VRA increased the spill rate from October 9, 2023, flooding several communities in the North, South, and Central Tongu District and the Ada East District.
- Tax waiver on electric cars for 8 years
The government, as part of its fiscal measures, has decided to waive import duties on Electric Vehicles (EVs) designated for public transportation for the next eight years.
Additionally, import duties would be exempted for semi-knocked down and completely knocked down electric vehicles brought into the country by registered EV assembly companies for the same eight-year period.
The EVs are expected to cut down demand for petrol and diesel vehicles to reduce prices and curb harmful carbon emissions.
- Zero rate VAT on locally produced sanitary pads
In a move to promote menstrual hygiene and affordability, the minister announced a zero rate of VAT on locally produced sanitary pads.
The government will also grant import duty waivers for raw materials for the local manufacture of sanitary pads.
- Ghana’s economy is projected to hit GHC1 trillion in 2024
Mr Ofori-Atta said the 2024 budget is even more significant because Ghana will cross the GH₵1 trillion Gross Domestic Product (GDP) mark for the first time.
With the set milestone, he stressed the need to protect, at all costs, the foundation for sustained economic expansion.
- Public debt accumulation has slowed down significantly
The total debt has declined from 73.1% of GDP at the end of 2022 to 66.4% of GDP as of September 2023.
Completing external debt restructuring is expected to improve Ghana’s debt situation further.
- Total expenditure is projected at GH₵226.7 billion
The government hopes to spend as much as GH₵226.7 billion in 2024.
According to the sector minister, this projection reflects a reduction of 6.1 percentage points of GDP in total expenditures (commitment basis) relative to the outturn in 2022.
The decrease comes from the combination of fiscal consolidation efforts of 4.9 percentage points of GDP, reflecting an adjustment in revenue by 1.0 percentage points and primary expenditure by 4.0 percentage points of GDP.
The potential interest rate savings from the ongoing external debt operation will further bolster the sustainability of public finance.
- La General Hospital project to commence next week
The government has renegotiated the contract terms of the La General Hospital project, which will now be funded through the national budget.
The contractor is expected back on site next week to complete significant work by 2024.
- GH₵32.7billion invested to keep the lights on
The finance minister said the government had done its best in its seven years in office to keep the power supply stable and lights on.
He noted that the government has “invested GH¢32.7 billion to keep the lights on”.
He said the amount invested was also to support the growth of businesses in the country.
According to him, the government has also made other investments, such as GH¢25.3 billion, to facilitate repositioning of the financial sector and enhance its ability to assist business operations.
- Over 2.3 million jobs have been created
The minister said the government has created over 2.3 million jobs in the private and public sectors (approximately 900,000 in the private and 1.4 million in the public sector).
- The exchange rate is expected to remain stable
Mr Ofori-Atta has assured that the Ghanaian cedi is poised to withstand exchange rate shocks and will maintain its strength in the coming year.
According to the sector minister, the exchange rate is anticipated to remain steady, with expectations of no significant depreciation of the local currency.
He explained that the IMF Supported Programme and anticipated inflows from the cocoa syndication loan will support the cedi’s robustness.