In a bid to ensure judicious use of state funds, the government will from April next month close down the current 5,000 supplementary accounts being used by the various Ministries, Departments and Agencies (MDAs) in the country.
To this end, the Ministry of Finance and Economic Planning in conjunction with the Bank of Ghana and the Controller and Accountant General Department, has initiated the process of developing a Single Treasury Account (STA) with the objective of ensuring prudent and efficient cash management and reducing domestic borrowing in Ghana.
The STA, which is expected to be implemented in April will also enhance domestic revenue mobilization and tighten up all the loopholes in the public sector funds in the country.
This came to light at a maiden workshop for the Parliamentary Press Corps and financial journalists in Accra. Given an overview of the 2009 budget, the Director of Budgets at the Ministry of Finance and Economic Planning, Nana Kwabena Adjei-Mensah, disclosed that for Ghana to be able to wean itself off donor funding, the country would need to generate about 40% revenue domestically.
He added that the country's domestic revenue resources were able to meet only 60.6%, while foreign grants and foreign loans were 13.3% and 10.5% respectively of total budget expenditure.
The Director hinted that to further step up revenue mobilization in the country, the government is to initiate the process of merging the three revenue agencies; namely the Internal Revenue Service (IRS), Value-Added Tax (VAT) Service and the Custom, Excise and Preventive Service (CEPS), under an Office of Commissioner-General of Revenues.
According to him, the government will begin the process for the creation of a sinking fund account due to availability of funds for repayment at the maturity dates.
The government will also review the Export Development and Investment Fund (EDIF) Law to include the use of the fund for agricultural investment and infrastructure. This will further help to resuscitate the agricultural sector.
Nana Adjei-Mensah was worried about the huge overall budget deficit excluding divestiture of 14.9% in 2008 against 5.7 of G.D.P and called for efforts to reclaim the deficit.
He said the 2009 budget macroeconomic targets included real G.DP growth of 5.9%, average inflation target of 15.9%, end period inflation of 12.5% and an overall budget deficit equivalent to 9.4% of G.D.P.
However, Nana Adjei-Mensah mentioned external shocks, salary administration, fiscal management and contingent liabilities as the implementation challenges of this year's budget.
The Director of Policy, Analysis and Research at the Ministry of Finance and Economic Planning, Mr. Oku Afari, who took the participants through the macroeconomic framework and the 2009 budget, emphasized that the huge fiscal deficit together with the balance of payment deficit calls for effective and prudent financial and economic management to ensure sustainability in the macroeconomic indicators.
He noted that the general economic policy direction of this year's budget is gear towards correcting the huge fiscal imbalance experienced since 2006, rationalizing subsidies to State-Owned Enterprises (SOEs), especially in the energy sector as well as ensuring adequate international reserves.
The Chief Director of the Ministry of Finance and Economy Planning, Nana Juaben-Boaten Siriboe urged the media to disseminate information on the budget to enable Ghanaians to monitor how the budget is being implemented.