A Deputy Minister for Finance, Dr. John Kumah has discredited the latest Fiscal Recklessness Index report released by policy think tank, IMANI Africa.
In the report, which was jointly authored by IMANI and Oxfam Ghana, the Ministry of Finance was said to have been the state institution with the highest level of fiscal recklessness between 2015 and 2020, recording more than GH¢11 billion in losses to the state.
Data from the Fiscal Recklessness Index 2020 report also ranked financial irregularities for Ministries, Departments, and Agencies within the period.
The Deputy Finance Minister in a Citi News interview said the policy think tank only rehashed the Auditor-General’s report and failed to indicate instances where losses had been recovered.
“I have read the Imani report and I think they did a poor job. They only rehashed the report given by the Auditor-General which was widely misinterpreted by many people that government has lost billions of cedis, which was not so.”
“When you accumulate previous irregularities, and you don’t tell us the following year’s irregularities that recovered much of the losses that were identified in the previous years, then you will be double-counting the losses, which is not the case. For instance, in 2018 where they said GRA could not collect about 5 billion worth of cedis in taxes, the following year, that is 2019, GRA came out with a report showing 95% of that money that was locked in 2018 was recovered and the 5% was a subject of litigation in court. About the arrears and advances to workers guaranteed by their salaries, all those were recovered the following year.”
Excerpts of the report
During a presentation at the launch of the report, a research consultant with IMANI, Dennis Asare disclosed among other things that commercial banks who collect tax revenue on behalf of government fail to lodge the funds based on the time frame provided by the PFM Act, which is one of the major issues that government faced.
“Overall, this is the fiscal recklessness of the 29 MDAs in Ghana. The recklessness or the financial cost of the recklessness of the Ministries Departments and Agencies are increasing as compared to 2010 and 2014,” he added.
The policy think tank also observed that the current public financing system is not delivering efficiency.
“If you compare 2010 to 2014, the financial cost of the recklessness of MDAs to the period 2015 and 2020, you see that the recklessness has increased by about 13 times. So between 2010 and 2014, the financial cost of irregularity was about 1.4 billion, but between 2015 and 2020 it is about 13.9 billion, which shows that the Public Financial System that we have, to some extent, is not delivering the level of efficiency.”
The Ministry of Health was also ranked as the second most financially reckless institution in the country.
Click here to read IMANI Africa’s Fiscal Recklessness Index 2020 report.