Partner and Africa Leader for Infrastructure, Capital Projects and Real Estate at Deloitte Africa, Yaw Appiah Lartey, has welcomed aspects of the government’s Mid-Year Budget Review, particularly measures aimed at improving the financing of capital projects, while urging authorities to strengthen revenue mobilisation and avoid duplication in the implementation of flagship programmes. Speaking on JoyNews’ Newsfile on Saturday, July 25, Mr Appiah Lartey said Ghana’s economic recovery efforts must go beyond expenditure controls and focus on sustainable revenue generation, efficient project financing and targeted interventions. His comments come after the Finance Minister’s Mid-Year Budget Review highlighted falling inflation, a stronger cedi, improved fiscal discipline and renewed confidence in the economy.
However, the Minority in Parliament has argued that the positive macroeconomic indicators do not fully reflect challenges such as reduced spending, delays in implementing flagship programmes and questions over government priorities. Mr Appiah Lartey said one of the longstanding challenges with public infrastructure projects has been the absence of dedicated funding arrangements before projects begin, resulting in stalled works and accumulated debts owed to contractors. “There may be some concern that has been raised.
The first is that, historically, some of our capital expenditures have not had earmarked funds. We incur them and we have issues with contractors not being paid,” he said. He described the move towards ensuring that projects have identified funding sources before implementation as a positive step.
“For me, this is positive because you have a situation where the construction starts, it gets stuck in the middle of the way and there’s no fund debt,” he stated. According to him, establishing a financing framework for projects would prevent situations where government begins construction only to search for funding after work has commenced. “You will have to have some form of sinking fund for the debts that we are incurring for the programmes that we plan.
So it’s a positive thing, in my view, because a project starts and doesn’t have to get to the middle before we start looking for funding,” he added. The Deloitte executive said while government’s efforts to control expenditure were important, more attention should be paid to revenue generation. Partner at Deloitte, Yaw Appiah Lartey, has raised concerns over government’s capital expenditure performance, warning that a 40 per cent underspend could affect the implementation of major development projects.
Speaking on JoyNews’ Newsfile on Saturday, July 25, Mr Lartey said while there were some positive outcomes from savings in compensation and interest payments, the shortfall in capital spending remained a major concern. According to him, government had budgeted significantly for capital projects but failed to meet its spending targets during the period under review. He explained that programme expenditure was projected at GH¢158 billion for the first quarter, but actual expenditure resulted in an underspend of about 20 per cent.
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