An Economist and Lecturer at the Department of Economics, University of Ghana, Dr. Adu Owusu Sarkodie expects the 2021 budget to focus on the recovery of the economy. According to him, Ghana’s economy is currently on the recovery path after suffering major setbacks in 2020 due to COVID-19.
“I think that the budget should focus on the recovery. Recovery here, I mean, the government should continue with most of the intervention programs to cushion businesses and also households. So, they should continue to support”.
Dr. Sarkodie said this whilst sharing his expectations on the 2021 budget statement with The Vaultz News. The Budget will be presented on the floor of the House later today.
Stimulus packages
Dr. Sarkodie lauded the government’s efforts to provide support for both small, medium, and large businesses. According to him, the government’s continuous support will fast-track the recovery process. Some of such initiatives include theGH¢750 million loan facility for micro, small and medium enterprises and the GH¢2 billion guarantee facility for large businesses.
He called on the government to continue with the provision of essentials such as water, food, electricity to the citizens. Dr. Sakordie added that the government should make sure that there is a constant supply of electricity to boost domestic manufacturing activities. He believes anything short of this, the country will be in very serious trouble.
Also, Dr. Sarkodie believes that “the economy is healing by itself”. According to him, the gradual easing of restrictions is beginning to reflect in the up-tick of economic activities in the country. He also noted that the border closure and the fall in global oil prices have affected revenues in 2020.
“Now the oil prices have picked up, the border is being opened gradually. So we are going to have the economy rebound by itself”.
He pointed out that the re-opening of schools has resuscitated all the economic activities associated with education. Sales in stationery stores, as well as other sales joints on the various campuses, have picked up as a result of the re-opening of schools.
Fiscal policy expectations
Meanwhile, Dr. Sarkodie disagrees with people calling on the government to introduce new taxes to raise revenues. According to him, the government can raise revenues without necessarily introducing taxes. He cited a reduction in tax exemptions and property rates as some other areas that the government can raise revenues.
Also, he pointed to linking digitization to revenue generation, as announced by the President, as another innovative means of raising revenues. Moreover, he expects the government not to borrow at the rate it used to borrow because the public debt is already high.
“With respect to the fiscals, I do not expect the government to introduce any new tax”.
Furthermore, Dr. Sarkodie expects the government not to focus so much on infrastructure development. According to him, the government should rather focus more on the agriculture sector to ensure an abundant supply of food. He noted that the surplus food can then be channeled into the manufacturing sector for value addition.
In a nutshell, Dr. Sarkodie expects the 2021 Budget Statement to focus on the support to businesses and households, as well as the agriculture and the industry sectors.
The 2021 Budget Statement and Economic Policy
The Minister for Parliamentary Affairs, Majority Leader and Leader of Government Business, Hon. Osei Kyei-Mensah-Bonsu will present the 2021 Budget. This is because the Minister-Designate for Finance, Ken Ofori-Atta is currently indisposed.
However, with the arrival of the Vaccines, it is still not clear whether the government will focus solely on infrastructure development in 2021. Since the President highlighted several infrastructural projects in Health, Energy, Transport, railway, and Agriculture that his government will implement this year.
Expectations are therefore high as Ghanaians await this year’s Economic Policy to be unveiled later today.
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