The Institute of Statistical, Social and Economic Research (ISSER) at the University of Ghana, Legon, has called for aggressive domestic revenue mobilisation through efficient tax and non-tax revenue generating measures to secure the country’s fiscal space.
It also called for a unified common platform for collecting property rates to boost domestic revenue in the country.
Speaking on the 2022 mid-year review budget in Accra, Director of ISSER Professor Peter Quartey, Director applauded government’s plan to spend within its means.
He however noted that achieving a fiscal deficit of 6.6 per cent of Gross Domestic Product (GDP) was ambitious and daunting.
Prof. Quartey noted that the, “deficit is expected to be financed from both domestic and foreign sources but domestic financing is the key driver”.
In the 2022 mid-year budget statement, government revised the country’s GDP growth rate from 5.8 per cent to 3.7 per cent in 2022.
However, Prof. Quartey entreated Government to focus on the private sector to achieve the target, since domestic financing was 5.4 per cent of GDP.
Road tolls
Prof. Quartey urged the government to re-introduce the collection of road tolls using the electronic pass system.
He pointed out that the outright removal of the tolls will not help in public-private partnership arrangements.
E-Levy debacle
On the controversial E-levy, Prof Quartey called for the reduction of the rate from 1.5 per cent to 0.5 per cent or 0.75 per cent because the Government will not be able to meet its target of over GH¢6.9 billion.
He noted that the half year 2022 figures showed a deviation of -40.8 per cent in the amount spent on Goods and Services.
According to him, the country paid so much in wages and salaries but less for goods and services.
Accordingly, Prof. Quartey called for staff performance evaluations across the public sector, stating that wages and salaries as a percentage of tax revenue was 44.3 per cent, while compensation to employees stood at GH¢37,948,992,821 out of GH¢96,842,134,702.
Export commodities
Touching on export commodities, Prof. Quartey decried that the country still depended heavily on revenue from raw material exports.
He called on government to modify structures and add value to primary products as a means toward adapting to the increasingly volatile world economy.
Proceeds from gold exports declined to $5.08 billion from $6.8 billion for 2020 and 2021 respectively.
The reduction, Prof. Quartey noted, was driven by lower export volumes despite higher prices in 2021 compared to 2020.
Domestic initiatives, he stated, should be aimed at increasing productivity and improving output in key primary sectors and value chains.
Free SHS
Speaking on funding of free Senior High School (SHS), Head of Economic Division at ISSER, Dr Osei Akoto, called on the government to consider reviewing the policy to assess its potential impact on the national economy, due to challenges of infrastructure and feeding grants.
On the health sector, he said the Agenda 111 vision of the Government was commendable but might not be realized by close of year.
Dr. Akoto therefore urged government to increase resources to ensure health equity in the face of on-going fifth wave of COVID-19 and the pending risk of monkeypox, and the Marburg diseases.
