Embrace measures to avoid budget overruns

Budgets overruns constitute one huge public financial management problem in Ghana.

In spite of budgets prepared for various state projects, the problem recurs and is worst in election years when politicians want to complete particular proj­ects to attract votes.

Since overrun occurs when the actual cost of a project exceeds the estimated or budgeted cost, it means that the state is going to pay more than it should be the case.

However, the problem does not end there as the overrun can cause further problems with the project’s scope, schedule, quality, or risk management, and affect the project’s profitability, stakeholder satisfaction, and competitive advantage, according to studies.

For instance, few months after their handover, roads hurriedly done in election years begin to develop defects like potholes.

At the end of it all, the un­budgeted funds pumped into the construction of such roads have gone to waste because in no time, the need to reconstruct them arises.

These and other reasons are why we support the appeal from the Minister-designate for Finance, Dr Mohammed Amin Adam, to Chief Directors and Heads of all Ministries, Depart­ments and Agencies (MDAs) to ensure strict compliance with their stated budgets for this year, a general election year, in order to curtail overruns.

He was magnanimous enough to show the Chief Directors and the other heads how to imple­ment the appeal and this is very important.

He says it is imperative that they engage their political heads not commit to projects which have not been budgeted for no matter which quarters they are coming from.

Going by what the minis­ter-designate is saying, we can conclude that the appeal is part of a government expenditure reforms on the way.

This means when finalised, the reforms are going to be embod­ied in public expenditure policy, which must be respected by even the President of the country.

All stakeholders working on such reforms and the subse­quent policy must, therefore, attach urgency to the process and bring some restrictions to ensure prudent expenditure to save the Consolidated Fund from constant stress.

The Ghanaian Times commends the minister-designate for his concerns but it seems this step is long overdue.

Public duty bearers, particularly politicians and heads of covered entities, have taken advantage and exploited the situation for far too long, which has hurt the coun­try’s financial strength.

We do not understand why the incoming minister should count on the Chief Directors and other heads to engage their respective political heads on the Govern­ment’s policy direction to ensure the effective implementation of the measures at their various entities.

We think the best thing to do is to call the political heads to a meeting and sensitise them too to the ramifications of their budget overruns.

If really politicians are provid­ing service to the people without any ulterior motive as they claim, then here is one occasion to prove their selflessness.

In that case, we also think there is the need to sensitise the public also to understand why certain projects must wait till the appropriate time.

And while this is being done, there is the need for the govern­ment to check factors that typi­cally cause budget overruns such as delays in payment to contrac­tors, project variations, inflation and schedule slippage.