For Immediate Release
BudgIT Ghana Questions the Efficacy of the Proposed 2024 National Budget. Are the Allocations Realistic for Growth and Development?
Accra, December 13, 2023
BudgIT Ghana, a prominent civil society organisation and a member of the CSO Budget Forum, has scrutinised the recently published 2024 National Budget. The organisation has raised serious concerns about the effectiveness of budget allocations in propelling growth and development within a stable macroeconomic setting. As Ghana prepares for presidential elections and transitions in 2024, it is imperative that the new budget address key concerns and balance stability and growth. It must also demonstrate the government’s commitment to fiscal discipline and addressing its debt issues amidst the lingering economic crisis.
The 2024 proposed budget highlights the government’s priorities for the next fiscal year, and its success is strongly linked to the allocation of resources to critical sectors such as Education, Health, Agriculture, Tourism, Manufacturing and Infrastructure, and it can strongly influence public trust or mistrust in the government.
Earlier this month, BudgIT Ghana engaged in constructive talks with the Finance Minister, Hon. Ken Ofori Atta, and his deputies through the Civil Society Budget Forum. The organisation presented some recommendations to guide the budget formulation process. One of the recommendations was to reconsider the COVID-19 levy and transform it into a Health Emergency Fund.
Although the budget has yet to reflect this suggestion, the government’s decision to scrap the 20% luxury tax on sanitary pads by granting tax waivers to locally produced sanitary pads and materials for their production is commendable. BudgIT Ghana recognises the positive impact of this move, which addresses a critical aspect of women’s health and hygiene and encourages local manufacturing of sanitary pads, leading to more local employment opportunities. Yet, as we dissect the budget allocations across sectors, BudgIT Ghana is spotlighting their potential impact on the overarching theme of “Pursuing Growth and Development in a Stable Macroeconomic Environment.”
A total of GHS 10,960,552,729 was allocated to the Administration Sector, including substantial increases for several departments like the 47.08% boost to the Office of Government Machinery, which raised eyebrows. While strategic planning is essential, the jaw-dropping 377.00% surge in the National Development Planning Commission prompts questions about efficiency and alignment with national priorities. A realignment may be necessary to ensure resources match the country’s development goals.
The government has allocated GHS 8,924,373,161 to the Economic Sector, which has shown positive growth overall. The Ministry of Trade and Industry has experienced a significant increase of 73.88%, which indicates a focus on economic diversification. However, the Ministry of Tourism, Arts, and Culture has witnessed a concerning decline of -32.79%, raising questions about the government’s commitment to fostering cultural and creative industries. It is crucial to note that if the tourism sector is fully harnessed, it can play a vital role in contributing to Ghana’s GDP, which can help reduce the regular budget deficit year on year.
The Infrastructure Sector has received the lowest budget share of GHS 7,344,452,885, despite the extensive list of 16 government flagship projects and other critical infrastructure needs. This allocation raises concerns about whether this decision is in the best interest of Ghanaians and whether it adequately addresses the nation’s long-term development goals.
In the national budget, the Social Sector received an allocation of GHS 48,266,014,081. There were fluctuations in the allocation across different ministries. The Ministry of Education received a 28.87% increase, indicating a solid commitment to human capital development. However, the Ministry of Youth and Sports witnessed a significant reduction of -50.52%, which raises concerns about the potential impact on youth development programs.
PUBLIC SAFETY SECTOR
The budget allocation of GHS 15,602,359,121 for the Public Safety Sector raises questions about its prioritisation. While public safety is paramount, the substantial allocation prompts inquiry into whether it’s solely for election-related issues or comprehensively addresses broader security concerns.
In conclusion, BudgIT Ghana calls for a transparent clarification of budgetary allocations, particularly in the Infrastructure Sector, to ensure resources are efficiently utilised for sustainable development. We want to see substantial investments in critical sectors highlighted above with more allocation towards capital expenditure and less on salaries and administrative costs. The organisation reiterates its commitment to constructive engagement with the government to enhance the budgetary process and achieve common national objectives.
Jennifer A. Moffatt
Head of Programs-BudgIT Ghana