President Nana Addo Dankwa Akufo-Addo has called on Ghanaians to support the government’s fiscal measures proposed for approval by Parliament to enable it to restore macroeconomic stability, as well as promote inclusive growth and protect the poor.
President Akufo-Addo said debt operations alone cannot address the country’s fiscal and debt sustainability but fiscal adjustments through improved revenue collection and expenditure rationalisation measures to complement the government’s efforts.
The revenue measures proposed among others include the removal of selected VAT exemptions; implementation of the VAT e-invoicing system; revision of selected excise taxes; complete removal of discount on benchmark values; implementation of the unified property rate collection and review of the National Fiscal Stabilisation Levy (NFSL) to include all entities which are critical in supporting the fiscal consolidation process.
Addressing the 38th Farmers’ Day at Koforidua in the Eastern Region last Friday, President Akufo-Addo said those difficult but necessary debt operations measures and the implementation of key structural reforms to eliminate the structural bottlenecks outlined in the 2023 Budget, would go a long way to address the economic challenges.
The fiscal adjustment proposed by the government, including lowering the cap on transfers to earmarked funds from 25 per cent to 17.5 per cent; review of the government flagship programmes to reflect relevance, promote efficiency and ensure value for money.
It includes also the continued 30% cut in the salaries of the President, Vice President, Ministers, Deputy Ministers, MMDCEs and political office holders including those in state-owned enterprises; managing public sector wage negotiations and hiring within budgetary constraints and integrating the public procurement approval processes with GIFMIS and budget allocation.
There are other key public expenditure measures which seek to demonstrate the government’s burden-sharing in addressing the economic challenges facing the country and are expected to reduce spending towards fiscal sustainability.
More importantly, President Akufo-Addo said the country needed to address some immediate structural weaknesses urgently—Ghana is the second largest economy in West Africa but has the lowest tax-to-GDP ratio of some 12% compared with an average of 18% in the ECOWAS Region.
“It is essential for our future, if we are to realise our goal of a Ghana Beyond Aid, that we make rapid strides to meet the eighteen per cent and even higher target, to strengthen our self-reliance and our capacity to finance our development.”
President Akufo-Addo appealed to Organised Labour to continue its dialogue with its Social Partners to find rapidly an acceptable solution to the ongoing salary negotiations, “a solution which is realistic and fair.”
Rex Mainoo Yeboah, ISD
