The 2024 budget was headlined, among other reasons, for its ambitious GHS 1 Trillion GDP projection.
In a highly optimistic spirit in parliament, the Finance minister underscored significance of the budget, emphasizing that it would propel Ghana’s GDP across the GH¢1 trillion mark, a milestone indicative of robust economic growth.
To achieve this feat, while expressing concern over the informal sector’s exclusion from revenue mobilization, PwC has emphasized that there’s a need for creative strategies to incorporate this vast sector into the tax net.
“We reiterate the position supported, arguably, by a majority, that the Government should consider creative ways of roping the informal sector into the revenue mobilization net. The sector is huge, creates value, most of which escapes the Government’s tax dragnet, and makes Government’s current taxation policy and administration approach inequitable.”
PwC 2024 Budget Digest Report
PwC also revealed that the revenue mobilization strategy of the budget which hinges on permanent non-oil revenue measures, notably property rates, must encourage the Ghana Revenue Authority to facilitate the property rate reform project is realized. According to PwC, the Minister highlighted a significant increase in the number of billable properties, signaling a substantial revenue mobilization opportunity.
However, while Metropolitan, Municipal, and District Assemblies (MMDAs) are poised to benefit from property rates, challenges related to timely disbursement of allocations to MMDAs need resolution. The revenue could empower MMDAs for socio-economic development, provided they enhance operational capacity for effective resource utilization.
PwC has therefore encouraged government to strategically get the masses along its plan.
“It cannot simply go ahead and execute the budget. It must seek to proactively engage and communicate its plans and actions, and results thereof, in as simple terms as possible. It should be very creative about such communication to be able to reach the masses and for people of various walks of life to understand what it is doing to execute its mandate.”
PwC 2024 Budget Digest Report
On the expenditure front, the Minister emphasized arrears clearance, aligning budget allotments with cash flow forecasts, standardized contracts for public works, and technology adoption for procurement through GHANEPS.
Acknowledging 2024 as an election year, the PwC commended the government’s restraint from splurging on capital projects, opting for fiscal prudence. Expenditure reforms, particularly Public Financial Management (PFM) reforms, are deemed critical for sustainable fiscal consolidation.
The Growth Strategy, a focal point for sectors like agriculture, aquaculture, trade and industry, digitalization and technology, and tourism and sports, aims to reinvigorate industrialization and create employment opportunities. The strategy includes investments in existing programs like Planting for Food and Jobs and One District, One Factory.
Debt Concerns Still Linger
Notwithstanding, PwC stated that despite these plans, concerns linger about debt sustainability. The government’s liquidity mop-up through Treasury bills raises eyebrows, necessitating swift negotiations with creditors to secure agreements aligning debt with acceptable sustainability limits relative to GDP.
The 2024 Budget unfolds as a comprehensive roadmap for economic growth, but its success hinges on effective implementation, transparency, and regaining public trust.
The Economic Enclaves Programme and the Growth Framework also presents ambitious plans for value chain development. However, due diligence and sincere implementation are vital for their success. The government is urged to prioritize impact assessments of existing programs to inform judicious resource utilization.
However, the Government must stride towards and beyond a trillion-Ghana cedi economy. PwC further indicated its readiness to support government.
“Various stakeholders would be observing closely to see how Government/ the Ministry of Finance would utilize the Dialogue as a resource for economic management. At PwC, we always stand ready to support Government and the country to achieve our short, medium and long-term development aspirations”
PwC 2024 Budget Digest Report
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