Director of the Institute of Statistical, Social and Economic Research (ISSER), Prof Peter Quartey, has advised government to update Ghanaians on its efforts in cutting down expenditure in the mid-year budget review.
According to him, this move will build investor confidence and attract more foreign direct investments into economy. With this, he revealed that there is the need for more market intervention from the Bank of Ghana to maintain the cedi’s appreciation.
“I’ve seen digitalization processes, we want to see to what extent it is yielding the needed revenue. Then on the expenditure side, we’ve seen a lot of talks about proposals about cutting down spending – the numbers should show. We want to see how much we have done [and] how well we have done in terms of cutting down expenditure, so we ensure fiscal consolidation. Having said all of that, what are the other things that we are doing to stimulate growth in the economy?”
Prof Peter Quartey
Commenting on his expectations for the mid-year budget review by government, Prof Quartey stated that revenue has been a major challenge, as such with the coming on board of the IMF funds and new taxes that have been introduced, he would want to see how much revenue each of the different tax components are yielding.
Additionally, he noted that he anticipates whether these new revenue measures would need to be sustained or made better.
“… We need the numbers to know whether those new taxes are doing well [and] if not, what is the way forward. How do we streamline them to ensure tax collection is efficient. We’ve seen under the IMF program that there’s going to be some kind of limitation on wage increases and employment within the public sector, and the private sector certainly has to step in. So, they need to be supported in other to reduce unemployment in the country.”
Prof Peter Quartey
Touching on the recovery of the economy, Prof Quartey indicated that there is some level of “positive recovery”. This, he highlighted, is because when the first quarter GDP growth is compared to the same period last year, it’s slightly higher than the previous.
“So, we see some discovery. Despite the debt exchange, new tariffs and increase in cost of doing business, there’s been some recovery, except that we expect more of the recovery to come from manufacturing or industry as a whole.”
Prof Peter Quartey
Focus on agriculture and industry in mid-year budget
Furthermore, the ISSER director emphasized that government must focus on other areas of the economy, particularly the Agric sector because “a higher growth from agric and industry will be good”. He revealed that as it stands, government is spending its hard-earned forex in areas that are not really relevant and are just competing with local industries, thereby depleting the country’s forex.
“There should be some intervention one way or the other. So, regulation is key and also price stability. Once inflation is under control, it certainly has a knock-on effect on the exchange rate and vice versa.”
Prof Peter Quartey
Touching on the impact of the debt restructuring on the economy, Prof Quartey indicated that the external creditors have committed to ensuring debt restructuring. As such, he expects their commitment to yield the desired results for the country.
“They have agreed, if not, they wouldn’t have signed to that memorandum… So, I certainly expect some decency, some decent amount of restructuring to happen. But it’s not just about the restructuring but going forward what do we do so we don’t return to similar situation in the next decade or never at all?”
Prof Peter Quartey
Meanwhile, finance minister, Ken Ofori-Atta, has appealed to all Ghanaians to remain focused as the government resolves the economic challenges.
Assuring Ghanaians of signs of economic improvement, Mr Ofori-Atta indicated that the local currency, the Cedi has gained stability against foreign currencies. He further stated that inflation has also simmered down, from 54.1% recorded in January, to 42.2% in May this year.
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