The Institute of Statistical, Social and Economic Research, ISSER, University of Ghana has described the 2017 Budget Statement and Economic Policy announced by the Finance Minister on March 2, 2017, as bold and one that would boost the private sector.
However, the Institute maintained that the ultimate success would largely depend on a number of conditions and in particular the response by those who would benefit from the various tax cuts.
Speaking at a press conference held in Accra on Friday, March 10, 2017 to express the collective opinion of researchers at the Institute, Dr. Charles Ackah, Head of the Economics Division of the Institute, noted “the 2017 Budget brings hope to the private sector including the monetary sector but its outcome will significantly depend on the degree to which key actors within the economy respond to the tax stimulus and other policy initiatives”.
He stated that the budget has on broad level done three things which are: attempted to incentivize production and growth through the many tax incentives; has been bold and tackled the issue of fiscal space by relaxing, to some degree, the rigidities imposed by the many statutory funds and; prioritized spending by funding of the many policies such as the Zongo Development Fund, Free SHS, One district one factory, etc.
But Dr. Ackah threw some caveats which are whether the government can remain fiscally disciplined, how to balance the need for more priority spending with fiscal sustainability and other macroeconomic considerations and whether the realignments in the fiscals will yield the anticipated efficiency.
On public debt, he observed that if the country is to grow faster, government must first raise the balance of payments constraint on demand and put on ice the penchant for borrowing.
So, borrowing by the past government has left the country with 122billion Ghana cedis debt which stands at 73% of GDP.
On agriculture which the government touts as one of its flagships, Dr Ackah stated that most of the policy proposals aimed at modernizing and transforming agriculture and the economy of Ghana have been in policy documents since the country’s independence and “what is left to be done is effective implementation and monitoring”.
On education, the Head of the Economics division of ISSER, lauded government on its intention to make senior high school free, from September 2017/2018 but had some queries. The unclear areas are: it is still not clear how much this will cost the government in subsequent years as new cohorts join the stream. Could proper targeting of disadvantaged schools and households be done instead of its universality? Do we have the requisite facilities and human resources to contain the expected increases in enrolment? Couldn’t the start of this policy be deferred to a later date?
These notwithstanding, Dr. Ackah enjoined his compatriots to encourage initiatives aimed at “sowing the seeds for Growth and Jobs” which the 2017 budget underpins.
The Chairman of the event was Prof. Felix Asante, Director of the Institute. Senior members of the Institute present were, Prof. Peter Quartey, Prof Augustin Fosu, Prof. Robert Darko Osei, Prof Kwabena Anaman, Dr. Martha Awo and Dr. Fred Dzanku,