2024 budget: ISSER wants prudent spending

­­The Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana has called on the government to use the 2024 budget to introduce policies that will ensure prudent spending, reduce taxes on production and broaden the tax base.

The institute maintained that taxing production excessively was affecting industrial performance, promoting imports and worsening the already high unemployment situation in the country.

It explained that high taxes on food and beverages, for instance, were fuelling inflation and, therefore, a critical review of some of the taxes must be prioritised in the Budget Statement and Economic Policy expected to be presented before Parliament on November 15, this year.

Launching the State of the Ghanaian Economy Report (SGER 2022) and Quarter Three (Q3) Economic Performance at the university in Accra yesterday, the Director of ISSER, Professor Peter Quartey, stated that the government should invest to stimulate the productive sectors of the economy.

“We do not expect new or increase in taxes in the 2024 budget; we expect the government to review the existing tax regime to abolish the ones that are not performing and fall under nuisance taxes”.

“We want to see measures to broaden the tax base such as the introduction of a digitised property rate.

Once taxes are reasonable and affordable, more people pay and the government is able to get more revenue for development,” he said.

Comprehensive document

The SGER is a comprehensive document that analyses the performance of various sectors of the Ghanaian economy.

The 2022 report marks the 32nd edition of the report, making it a milestone in ISSER’s dedication to provide valuable objective and evidence-led insight to support Ghana’s development.

As in the previous edition, the latest report provides a timely and objective platform for discussing pressing issues about the current economic situation, including Ghana’s programme with the International Monetary Fund (IMF) and its impacts on Ghanaians.

It reflects the institute's commitment to fostering evidence-led discussions and promoting knowledge for decision-making, as well as development.

Lessons

The Director of ISSER noted that lessons from the painful domestic debt exchange programme should inform the country’s spending habits going into the 2024 election.

Prof. Quartey explained that as the current government sought to break the eight, it should also break the political business cycle of overspending during election years.

“The 30-40 per cent haircut on Eurobonds will drive down investor confidence which will take a long time to restore,” the economist stated.

He called for the intensification of policies to support the local manufacturing industry to achieve the objective of increased local production and value addition.

“Industrial sector’s recovery over the medium term will depend significantly on the extent to which policymakers are able to restore and consolidate macroeconomic stability in the medium term,” he stressed.

Prof. Quartey added that the country’s economy was showing signs of recovery and it was likely to grow by about three per cent by end 2023 all things being equal.

He added that over the period the agricultural sector had remained resilient and that the second edition of Planting for Food and Jobs (PFJ 2.0) should revitalise the sector.

An entrepreneur, Dr James Asare-Adjei, said economies across the world, including Ghana’s, were in huge difficulty.

The former President of the Association of Ghana Industries (AGI) said that was having a huge impact on the operations of industries which required actual information on the true state of the economy to build back towards resilience.

“Businesses are crumbling as a result of the difficult economic situation being faced across the world, but we need to get the actual fact to help not only the managers of the economy, but also industry players who are supposed to be the engine of growth to navigate the difficulties.

“It is for this reason that the State of the Ghanaian Economy Report by ISSER is timely to help address the situation,” Dr Asare-Adjei, who is the Founder and Chief Executive Officer (CEO) of Asadtek Group Limited, stated.