GIFMIS must solve revenue challenges
The President of the Institute of Chartered Accountants, Ghana (ICAG), Prof. Kwame Boasiako Omane-Antwi, has commended the Ministry of Finance (MoF) for the launch of the Ghana Integrated Financial Management System (GIFMIS), aimed at controlling government’s expenditure.
GIFMIS is a customised and integrated electronic-based system which will enable all ministries, departments and agencies (MDAs) to implement the budget and account for every expenditure and project.
He told the GRAPHIC BUSINESS in Accra on October 9 that, “ICT is the order of the day and we cannot sit and wait any longer. All over the world, countries are using ICT to increase the efficient collection of tax revenues. It is important for revenue authorities to promote these benefits to taxpayers to increase compliance.”
He said GIFMIS should serve as a basis for Ghana to leverage on information and communications technology (ICT) to overcome tax collection challenges.
He added that the use of ICT also increased transparency and was, therefore, a powerful tool in tackling corruption and reducing the opportunities for bribery.
GIFMIS
It was launched in 2010 by the government with the objective of automating the budget preparation, execution, accounting and reporting process of our public financial management system.
GIFMIS has three components which include the GIFMIS financial, GIFMIS budget module and the Human Resource Information System (HRMIS).
The launch of the GIFMIS budget module is expected to provide a simpler, easier system for use in the budget process.
According to Prof. Omane-Antwi, GIFMIS being an integrated system would make it difficult for people to fidget unlike the manual system.
He said implementation should be done carefully, taking a cue from countries such as Malawi to avoid fraud.
The Country Director of SEND Ghana, Mr George Osei Bimpeh, said GIFMIS provided a solution to the public financial management system and had the potential to help disaggregate budget information.
“They just have to make sure that they implement it to the core and show commitment and make sure whatever information they generate they make it accessible to the public to also make meaning out of it. Once they are able to do that they will be making some sense in terms of establishing whether we are efficiently managing the budget or not,” he said.
At the media launch of GIFMIS, the Chief Director at the Ministry of Finance, Major Mahama S. Tara (Rtd), said the GIFMIS budget module-hyperion would eventually lead to a reduction in budget variations and improve the management of public expenditure and ultimately lead to improved decision making and government fiscal policy.
He said the improvement of public expenditure management in particular and a robust and efficient public financial management system in general was one of the ministry’s preoccupations.
“Our goal for the public financial management system is to strengthen our regulations, rules, systems and processes to ensure that we are able to efficiently capture, allocate, utilise, account, report and audit every public financial resource regardless of where it is generated,” he said.
2014 budget on govt expenditure
According to the 2014 budget statement of the government, total expenditure, including payments for the clearance of arrears and outstanding commitments for the first three quarters of the year amounted to GH¢21,202.8 million (24.3 per cent of GDP), against a target of GH¢22,710.3 million (25.6 per cent of GDP).
The outturn was 6.6 per cent lower than the budget target and 25.5 per cent higher than the outturn for the corresponding period in 2012. The growth in expenditure was mainly due to the increase in interest cost and the growth in the wage bill during the period.
As a result of the shortfall in revenue performance, total expenditure for the year, including provision for the clearance of arrears and commitments, is projected to be 2.7 per cent lower than the 2013 budget estimate. For the year total expenditure is projected at GH¢29,706.4 million (34.1 per cent of GDP).
Expenditure on wages and salaries from January to September 2013 totalled GH¢5,883.9 million, 5.5 per cent higher than the budget target of GH¢5,576.5 million and 19.4 per cent higher than the outturn for the same period in 2012. In addition to this, an amount of GH¢846.3 million was spent on the clearance of wage arrears.
Expenditure on wages and salaries alone was 66.3 per cent of non-oil tax revenue (excluding exemptions) and 62.3 per cent of tax revenue (excluding exemptions). Including the wage arrears paid during the period, expenditure on wages was 75.8 per cent of non-oil tax revenue (excluding exemptions) and 71.3 per cent of tax revenue (excluding exemptions). For the year as a whole, wages and salaries, including the provision made for the clearance of wage arrears is projected at GH¢9,567.1 million, 25.8 per cent higher than the 2013 budget estimate.
Graphic Business