Move to amend Agyapa, Aker Energy transactions 'good first step' - IMANI Africa

Government has made some concessions in the 2022 budget

Among others, the budget will review clauses on Agyapa and Aker deals

Finance Minister Ofori-Atta says there is no agreement on E-levy as yet

Franklin Cudjoe of IMANI Africa has welcomed a December 6, 2021, statement by Finance Minister Ken Ofori-Atta on issues around the

Read full article2022 budget and economic policy statement.

The statement was read by the Minister at a press conference where he made disclosures about consultations he had held with the Minority and other stakeholders relative to critical concerns raised in the budget.

According to Cudjoe, some of the issues the Minister addressed were important even though he would have expected more clarity on the single most contentious issue, the electronic transactions levy (E-levy).

He posted a series of tweets on his views about Ofori-Atta's statement.

"I have read the Finance Minister's statement on the 2022 budget. The part on Agyapa and Aker deals are a good first step to dealing with the vexed issues. We will watch the space."

On the E-levy, he stated: "I had hoped there would be an emphatic statement on the E-levy, beyond consultation with the Minority and a clarification on agency fees for collecting same."

He observed that the need to tighten our belts hasn't been more pressing than in these times when Ghana was grappling with a perilous debt.

He, however, wants the government to take the lead in pushing the austerity agenda and wants the Minority to also cooperate.

"The Minority should continue discussing with government, but charity begins with the government- at least reduce the budget to the office of government machinery by 25%. It can help build a few school blocks. Carpe diem," he added.

The areas Ofori-Atta is seeking to amend in the 2022 budget

The Minister in his statement disclosed that on behalf of The President, he had written to the Speake of Parliament with details of modifications to the budget in response to concerns and following consultations with stakeholders including the Minority.

i. with regards to Agyapa Royalties Ltd, we shall amend paragraphs 442 and 443 to take out references to mineral royalties collateralisation. It is important to note that, any reference to Agyapa was for informational purposes, and as such was not reflected in the fiscal framework;

ii. in respect of the unfortunate tidal waves which rendered about 3,000 people homeless in Keta, we shall make the necessary budgetary allocations of at least GHS10 million to complete the Feasibility and Engineering studies for the coastal communities adversely affected.

We will broaden the scope of the study to consider a more comprehensive solution to protect Ghana’s 540 Km of coastline, including the 149 Km between Aflao and Prampram. Meanwhile, NADMO has responded to the humanitarian crisis created by the tidal waves on the Keta coastline;

iii. relating to the Aker Energy transaction, we shall amend paragraph 829 of the 2022 Budget on the acquisition of a stake from Aker Energy and AGM Petroleum by GNPC, to reflect the resolution of Parliament dated 6th July, 2021 that “the terms and conditions of the loan for the acquisition of the shares shall be brought to Parliament for consideration pursuant to article 181 of the Constitution;

iv. on the benchmark values, we shall avert any hardships to importers and consumers while safeguarding the interest of local manufacturing industries to secure and expand jobs for our people. This administrative exercise which reviewed 43 out of 81 line items, has the objective to promote local manufacturing and the 1D1F policy, including the assembling of vehicles.

It is important to note that this adjustment affects only 11.4% of the total CIF value, of which 50% is for vehicles. From our analysis, the potential increase in retail prices should be relatively insignificant and therefore inflation should be muted.

The YouStart policy will also support our accomplished Traders with appropriate training and access to capital to become manufacturers in order to expand the industrial base of our society and our import substitution strategy, in line with our Ghana Beyond Aid agenda.

v. E-Levy: On the matter of the E-levy, having regard to its serious fiscal implications, we will continue our consultations with the Minority Caucus in Parliament and other relevant stakeholders, with a view to achieving consensus and reverting to the House in the shortest possible time.