Dr Maxwell Opoku-Afari, the First Deputy Governor Bank of Ghana, has noted that significant investment in key sectors of the economy is needed to achieve economic transformation.
According to the First Deputy Governor, diversification and transformation will require massive investments in energy, transportation, telecommunications, oil and gas, as well as mining and tourism.
These investments, he stated, would be critical to boost the much-needed inclusive growth, drive development, and help alleviate poverty in the country.
“Infrastructure supporting social services such as health, education and sports and cultural centres, among others also remain critical and are vital for growth and development, including improving on the quality of life.”
Dr Maxwell Opoku-Afari
Meanwhile, the Ghana Beyond Aid Charter and Strategy Document estimates that Ghana’s infrastructure needs are about US$7 billion annually over the next 10 years. Dr Opoku-Afari suggested that, as a country, there is the need to commit to the strategy document.
“This is the kind of investment needed to push us into that upper middle-income class, but there are constraints. I must say that these are staggering numbers which will require a new paradigm shift in the way we finance development”.
Dr Maxwell Opoku-Afari
Moreover, he suggested that the country needs to define creative ways of delivering fiscal space for financing development to close the staggering infrastructure deficit.
This, he explained, can be possible through enhancing efficiency of public spending, expenditure rationalization, and value for money projects that would deliver projects more effectively.
“No matter the efforts the country makes towards enhancing domestic revenue mobilization, we will continue to experience chronic fiscal deficits and a growing debt burden, if we do not take steps to rationalize our expenditure levels.
“This calls for the kind of fiscal consolidation that involves both revenue-raising measures and expenditure-rationalization policies, with the aim of reducing the overall fiscal deficit to sustainable levels. And achieving structural fiscal balance over the medium term”.
Dr Maxwell Opoku-Afari
However, the first Deputy Governor observed that this is achievable only when the government is efficient and serve as a catalyst for private-sector-led growth and development.
He further stated that it is needful to identify areas where spending is either wasteful, inefficient or do not deliver value for money, with the view to curtailing or eliminating them completely.
He said negotiation of government projects and contracts must be effectively handled and scrutinized to ensure that losses are minimized, and facilitate value for money considerations.
Meanwhile, he added that the citizens’ acceptance and compliance are tied to the effective use of these resources. He further said that when citizens perceive that the tax system do not inure to their benefits, they are likely to evade or not comply with such tax obligations.
He therefore, admonished the government to make conscious efforts to ensure that they stamp out misapplication in the management of the public purse. Thus, “not only through punitive action but also by implementing recovery measures to ensure that the public purse is protected”.
Meanwhile, Ghana’s tax revenue to Gross Domestic Product (GDP) ratio is lower than Africa’s average, which is also lower compared to other regions of the world.
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