NEWS COMMENTARY HIGHLIGHTS THE IMPORTANCE OF A TRANSITIONAL BUDGET IN AN ELECTION YEAR
The Minister of Finance Ken Ofori Atta Wednesday 28th October,2020 presented the transitional Budget to Parliament for the first quarter of 2021. During the presentation more than 27 billion Cedis was projected to be spent on key expenditure items such as compensation of public sector employees, ex-gratia awards, interest and amortization payments, transfers to statutory funds, critical programmes, goods and services and capital expenditure allocations to Ministries, Departments and Agencies prior to a drawing up of full budget for March next year. The Minister requested Parliament to approve the issuance of Sovereign Bonds of three Billion Dollars with the option to increase it to 5 billion dollars should market conditions prove favorable.
Out of the amount one point five billion Dollars will be used to support the 2021 budget and three point five billion for liability management. The issuance of the 5 billion dollars Euro-bond will be the highest amount requested by Government since Ghana issued its first International bond in 2007. The Budget which is also known as the Expenditure in Advance of Appropriation, is a usual characteristic of election years to prevent transitional challenges in the smooth running of government for the first three months in the year after an election. What it means is that government business should not come to halt during the transitional period. Furthermore, the Minister of Finance gave assurance to the investor community that Ghana is a safe place to do business now and always.
Again, it is important that Mr. Ofori Atta seeks Parliamentary approval now on funding ahead of December 7 and for the next government, because no government can withdraw or utilize funds from the consolidated funds without Parliamentary Approval after the new government comes to power. As its stand’s Ghana’s Parliament will be dissolved on the 7th of December when we go to the polls to elect a new government. The Transitional Budget is in line with the Public Financial Management Act (PFM), 2016 (Act 921), which requires government to draw up a budget for the first three months of the new financial year preceding an election.
Realistic and accurate budget planning and execution are central to effective fiscal policy, and require not just administrative capacity within government but also a budget system which determines the procedures to plan, control, and monitor spending effectively. Going forward, it does not matter which government is in power, the incumbent or the opposition. The country is ready to get go so far as the Ghana’s economic management for the first three new months in office is concerned.
By Mabel Annang, A Journalist