Professor Peter Quartey, the Director of the Institute of Statistical Social and Economic Research (ISSER) at the University of Ghana, has urged the government of Ghana led by Nana Addo to be transparent with its expenditure reduction efforts in the mid-year budget review.
According to Professor Quartey, such transparency is vital for fostering investor confidence and attracting greater foreign direct investments into the country’s economy.
Professor Quartey made the call when speaking at the Ghana National Chamber of Commerce National Dialogue Series. He stressed the importance of creating a conducive environment for private sector growth, which serves as a catalyst for overall economic expansion. He emphasized the need for the government to substantiate its claims of expenditure reduction through tangible evidence, while also unveiling new measures to support various sectors.
Professor Quartey underscored the need for stimulating growth and job creation, emphasizing the judicious allocation of resources while acknowledging the significance of fiscal stability. In his view, transparent communication from the government is essential to achieving these goals and garnering support from the private sector.
Professor Quartey, moreover, urged the Bank of Ghana to increase its market interventions to sustain the recent positive trajectory of the Ghanaian cedi. Recent data from commercial banks indicate that the cedi has appreciated by more than 1.0% against the US dollar since June.
To ensure a favorable outlook for the currency, Professor Quartey called for continued implementation of exchange regulations by the central bank and the streamlining of activities in the foreign exchange market. By doing so, the Bank of Ghana can maintain stability and prevent undue influence from the black market.
The Ghana National Chamber of Commerce National Dialogue Series, held under the theme “Mitigating the Negative Impact of Ghana’s IMF Program on Businesses,” served as a platform for comprehensive discussions on the challenges faced by businesses in the country and potential strategies to address them.
GNCCI Urges BoG to Tackle Inflation
In a bid to bolster Ghana’s economic recovery and support local businesses grappling with the effects of COVID-19, the Ghana National Chamber of Commerce and Industry (GNCCI) has called upon the government to take swift action in addressing the country’s soaring inflation. Highlighting the adverse impact of high inflation on businesses, the Chamber has urged the government to collaborate with the Bank of Ghana to explore innovative measures and find lasting solutions.
The GNCCI’s propositions come as part of its recommendations for the upcoming 2023 Mid-Year Budget Review, where it emphasizes the urgent need to secure funds for business expansion and recovery. The Chamber argues that the current upward trajectory of both policy and lending rates is detrimentally affecting key sectors and hindering the growth of the industrial and service sectors.
While the GNCCI acknowledges that monetary policy plays a crucial role in curbing inflation, it asserted that the problem at hand extends beyond a purely monetary issue. The Chamber suggested that the government should also focus on addressing supply-side constraints to effectively tackle the persistently high inflation rate.
In addition, the GNCCI emphasized the need for the government to prioritize tax reforms that enhance the efficiency of tax administration and broaden the tax net. Rather than burdening businesses with new taxes or increased tax rates, the Chamber urged the government to adopt innovative approaches that reduce the cost of production and foster an enabling environment for the private sector. By doing so, the government can safeguard domestic businesses, stimulate industrialization, boost exports, generate employment, and foster sustainable growth.
The Chamber’s proposals further underscored the pressing need for the government to resolve the impasse between the government and Independent Power Producers (IPPs) to prevent potential power cuts that could severely impact businesses.
Recognizing the adverse consequences of power disruptions on domestic enterprises, the GNCCI appealed to the government to find a lasting solution to this issue, thereby fostering a conducive environment for business operations.
The GNCCI’s recommendations offer a comprehensive framework to address the pressing economic challenges facing Ghana. By urgently tackling inflation, implementing efficient tax reforms, and ensuring a stable power supply, the government can provide much-needed support to domestic businesses, propel industrialization efforts, and foster sustainable economic growth.
