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John Mahama's First Budget Overview

Mar 12, 2025

PM Express Lecture Notes: John Dramani Mahama Administration's First Budget

Introduction

  • The John Dramani Mahama Administration presents its first budget.
  • The budget is a reflection of their campaign promises and manifesto.
  • Focus on fulfilling key promises while reducing nuisance taxes.
  • Goal: Cut taxes, enhance social programs, and manage budget gaps.
  • Term "Autonomics" surfaces as a description of this economic strategy.

Key Participants

  • Finance Minister: Dr. K. Foring
  • Discussion with public, including National Economic Dialogue, traders, and youth.

Significant Budget Proposals and Highlights

Economic Policy and Plans

  • National Economic Dialogue played a crucial role in shaping the budget.
  • Emphasis on fiscal discipline and addressing public financial management issues.
  • Focus on issues like the exchange rate and stabilizing the economy.
  • Plans to fund major promises without increasing the budget deficit.

Taxation and Revenue

  • Plans to cut certain taxes:
    • 10% withholding tax on winnings.
    • Electronic tax (e-levy).
    • VAT on motor vehicle insurance policy.
    • 1.5% withholding tax on small-scale miners' unprocessed gold.
  • Mechanism to fund tax cuts by reallocating unused funds from the tax refund account.

Public Financial Management (PFM)

  • Importance of enforcing the PFM Act and applying sanctions for past violations.
  • Large arrears and commitments inherited from the previous administration.
  • Validation of outstanding government claims and commitments (e.g., 67.5 billion GHS arrears).

Specific Issues and Strategies

Engagement with Ordinary Citizens

  • Direct engagement with market women to understand economic impact.
  • Feedback highlighted the importance of exchange rate stability.

Issues with State-Owned Enterprises

  • ECG owes significant debts; some contracts awarded for items not needed for years.
  • Bank of Ghana's request for a 53 billion GHS bailout due to negative equity.
  • High levels of outstanding government commitments on projects.

Strategic Reallocations and Prioritization

  • Prioritizing completion of ongoing projects with available funds.
  • Consideration of cutting down on expenditure at the Bank of Ghana instead of taxpayer-funded bailout.

Social Programs and Initiatives

  • Allocations made for social needs such as women's banking and assemblymen's payments.
  • Commitment to enhance basic social infrastructure and services.

Conclusion

  • The budget aims to balance tax cuts with spending to improve public welfare.
  • Focus on addressing legacy financial issues while embarking on new projects.
  • The success of these plans relies on fiscal discipline and effective public financial management.

Note: The lecture emphasized the need for transparency and accountability in government finances, with an overarching theme of aligning economic strategies with the needs of ordinary Ghanaians.

Full transcript