Graphic Business News

GH¢2.3bn of arrears cleared

By: Kester Aburam Korankye
Mr Ken Ofori-Atta — Minister of Finance
Mr Ken Ofori-Atta — Minister of Finance

The government has cleared GH¢2.3 billion stock of arrears out of a projected amount of GH¢3.2billion that was programmed for clearance in 2017.

The amount paid is 71.8 per cent of the total amount programmed to be cleared by the government.

The minister of finance, Mr Ken Ofori Atta told Parliament when he presented the 2018 budget statement and economic policy for approval on Wednesday.

As at the end of September 2017, the government, through a commitment to an arrears clearance programme in line with the International Monetary Fund’s (IMF) Extended Credit Facility (ECF) arrangement cleared the GH¢2.3 billion arrears to turn around the negative impact of the build-up of arrears on the economy.

He told the nation, while presenting the 2018 budget statement to Parliament that the government was confronted with a huge stock of expenditure arrears upon taking office from its predecessors in January this year.

The arrears, he said were mainly in respect of delayed payments in transfers to the statutory funds, wages and wage related arrears, road arrears, and other MDAs' expenditure.

 The arrears also comprised of overdue payments to the Energy Sector, State Owned Enterprises and other institutions.

The accumulation of expenditure arrears, Mr Ofori Atta said, “remains one of the major challenges to meeting the fiscal objectives of the government and the successful implementation of the Budget”.

Abuse of public purse

Mr Ofori Atta however noted that the previous government mismanaged the public purse and that had resulted in the increase in the stock of arrears but the Akufo Addo led government was taking measures to shrink it.

 He said aside the programmed stock of arrears, the government identified a buildup in outstanding payments and claims which were subjected to audit and 50 percent of the arrears were subsequently rejected.

“Of the total claims audited by the Auditor General, almost 50.0 percent were rejected. This, Mr. Speaker, was the level of naked abuse that the public purse was made to endure in recent years. We have moved on. The validated claims would be cleared in line with Government’s macroeconomic programme for the medium term”, he noted.

Fiscal discipline

The Finance minister also told parliament that the thrust of fiscal policy for the 2017 Budget, which was to restore confidence in the economy, ensure fiscal and debt sustainability, and promote overall macroeconomic stability through a number of bold initiatives was successful and the government intends to adhere to same in 2018.

“Preliminary data for September 2017 indicate that fiscal outturn was broadly in line with expectations despite revenue shortfalls” he said. — GB