Business News of Wednesday, 20 November 2019
Source: Graphic.com.gh
The think tank made the assertion based on analysis of the 2020 budget
The economy will continue to grow, especially in the long term, due to the sustainable and inclusive policy stances of the government, an analysis of the 2020 Budget by the Danquah Institute (DI) has indicated.
The think tank based its assertion on the assumption that the government will maintain its current fiscal responsibility posture and intensify its policy initiatives to drive production.
A statement signed and issued by the Executive Director of the DI, Mr. Richard Ahiagbah, gave the antecedents of the budget, saying the year 2015 witnessed a textbook collapse of the Ghanaian economy when the International Monetary Fund (IMF) assumed a supervisory role under former President John Mahama.
He said the institute came to the conclusion after a review of the 2020 Budget Statement and Economic Policy of the Government presented to Parliament last Wednesday.
Meanwhile, two other think tanks prefer a more ambitious outlook for the budget that will be stronger on revenue mobilization.
The Institute of Economic Affairs (IEA) has described the 2020 Budget as cautious and not sufficiently ambitious.
Policy impulse
Addressing the press in Accra on Tuesday after its analysis of the budget, the Director of Research at the IEA, Dr John Kwakye, said after three years of virtual fiscal consolidation, a strong policy impulse was needed to stimulate growth, while addressing social challenges such as unemployment, hardships and poverty
This required an ambitious revenue mobilization effort to support higher capital and social spending, he said.
The Minister of Finance, Mr Ken Ofori-Atta, presented the 2020 Budget to Parliament last Wednesday. Since then, many think tanks, accounting, and advisory firms, civil society groups and individuals have analyzed the economic policy document and shared the results with their stakeholders, such as we have on pages 24 & 25 of this paper.
The Institute of Fiscal Studies (IFS), for its part, said the governments revenue mobilization strategies, which included digitization to improve taxpayer identification, as well as revenue administration reforms to enhance efficiency, seem inadequate to achieve a significant increase in domestic revenues in both the short and the medium term.
It proposed a number of revenue mobilization actions, including the passage of the Tax Exemptions Bill to address the excesses of the countrys over-generous exemptions regime.
The IFS also called for a review of Ghanas natural resources fiscal regime to broaden the revenue base.
This call supports the stance of the IEA for the government to go after more resources locally to expand its expenditure in order to reduce its deficit.
In doing that, you will achieve your stability goal and your growth goal, the IEA said.
The government should look towards the natural resources sector, including gold, oil, manganese, bauxite, gas and iron ore, where Dr Kwakye said the IEA had assembled credible evidence that Ghana has resource reserves that are worth over $12 trillion.
When we go in to exploit part of these resources, we sign colonial type of concession contracts that cede mining rights to companies and then we take just a small portion for ourselves, when we could have gone in for product sharing contracts, he stated.
If we were to exploit our vast natural resources well under contracts that provide us with maximum benefit, we would not need the foreign borrowing that we often resort to and Ghana Beyond Aid would become a true reality, he added.
The 2020 budget and medium-term policy are cautious and guarded, as the minister endeavours to walk a tight rope between stabilisation and growth. The revenue, capital expenditure and growth targets are not sufficiently ambitious, he said.
Revenue Dr Kwakye indicated that the revenue effort of the government was rather tepid, adding that domestic revenue as a percentage of Gross Domestic Product (GDP) was 16.5 per cent in 2020 and averaged 15.9 per cent for 2021-2023.
On the other hand, the IEA Director of Research said, the tax component to GDP was 12.4 per cent in 2020 and averaged 12.9 per cent for 2021-2023.
The comparable figures for middle-income countries are about 30 per cent and 25 per cent, respectively. The minister (Mr Ofori-Atta) stated support for Ghana Revenue Authority (GRA) reforms, largely targeted at tax administration. However, the reforms do not reflect in significantly better revenue outcomes, he said, adding that the minister could have taken bolder steps to mobilise revenue, including the reduction of the spate of exemptions.
Danquah Institute According to Mr Ahiagbah, in spite of the presence of the IMF in 2016, the NDC administration left a weak and troubled economy.
The March 2017 Budget of President Akufo-Addos government took disciplined measures to commit to fiscal responsibility, and as a result, it reversed a troubled economy to growth and reclaimed Ghanas policy-making control by exiting the IMF programme, he added.
In the 2020 Budget, Mr Ofori-Atta stated distinctly that the government intends to be fiscally responsible after the IMF. This means that, barring eventualities, Ghanas economy will typically continue to grow, he said.
Fiscal responsibility According to the DI, fiscal responsibility was a critical enabler of economic growth and cited a recent IMF report that used The Philippines as a case study to underscore the growth-inducing potential of fiscal responsibility, particularly when the rule-based regime is adopted.
Ghana has adopted a five per cent deficit rule with the passage of the Fiscal Responsibility Act. Given the governments stated commitment to adhere to the law, it is reasonable to expect that the economy will benefit exponentially.
The DI said the economy President Akufo-Addo inherited required an urgent stimulus to induce economic activities and it achieved that by removing more than 10 nuisance taxes and implemented the free senior high school (FSHS) policy.
By eliminating the nuisance taxes and implementing the FSHS policy, both industry and citizens retained money in their pockets, cash they would have spent to meet tax obligations and school fees, it argued.
The government reversed a $1.8-billion trade deficit in 2016 to a trade surplus of $2.6 billion in 2019. This is a firm indication that the governments policies are working and will yield growth in the future, it added.
To the DI, there was every expectation that domestic production and jobs would increase, especially considering the forward impact of some agricultural initiatives such as Planting for Food and Jobs, Rearing for Food and Jobs and Planting for Export and Rural Development.
The code to unlocking the growth potential of these and other initiatives is citizen participation and implementation efficiency by government officials, the institute said.
IFS
On other recommendations, the IFS wanted the governments revenue mobilization strategies to undertake a comprehensive review of the tax system to identify the strong and weak segments of the system, in terms of the design, bases, rates, revenue potential relative to actual receipts and pursue corrective measures to strengthen tax mobilization.
It reminded the government that since 2020 was an election year, the issue of fiscal discipline cannot be overemphasized. Election year fiscal overruns have become a characteristic feature of Ghanas public financial management culture and it will be a feather in the cap of the government if it avoids a fiscal overrun in 2020.
The IFS also wanted the government to cut back on consumption-based expenditures, saying: This should include minimizing the size and avoiding the introduction of new initiatives while directing the savings into additional public investment and a reduction in borrowing.
Continue reading here:
Economy will grow beyond 2020 Danquah Institute projects - GhanaWeb
- QazInnovations: Kazakhstan seeks to bring volume of innovative ... - inform.kz/en - April 23rd, 2023 [April 23rd, 2023]
- World Earth Day: What is green finance, and why do we need it so much? - The Economic Times - April 23rd, 2023 [April 23rd, 2023]
- Netarts Bay cleanup scheduled for Earth Day with SOLVE and ... - Tillamook Headlight-Herald - April 23rd, 2023 [April 23rd, 2023]
- Shaping humanitarian and ethical governance in Pakistan - The Express Tribune - April 23rd, 2023 [April 23rd, 2023]
- Remarks by Secretary of the Treasury Janet L. Yellen on the U.S. ... - Treasury - April 23rd, 2023 [April 23rd, 2023]
- Investing in nature: Building local economies through conservation - McKinsey - April 23rd, 2023 [April 23rd, 2023]
- Lalith's economic vision for Lanka: Export or perish - The Sunday Times Sri Lanka - April 23rd, 2023 [April 23rd, 2023]
- Alliance for an Energy Efficient Economy to help A.P. govt. implement energy-efficiency projects - The Hindu - April 23rd, 2023 [April 23rd, 2023]
- President Biden Announces Key Appointments to Boards and ... - The White House - April 23rd, 2023 [April 23rd, 2023]
- A Restraint Approach to U.S.China Relations: Reversing the Slide ... - Quincy Institute for Responsible Statecraft - April 23rd, 2023 [April 23rd, 2023]
- Carrollton Mayor and City Council Election Preview 2023: Meet your ... - Star Local Media - April 23rd, 2023 [April 23rd, 2023]
- Governor Kelly Signs Bipartisan Bill to Expand Teacher Workforce in ... - Kansas Governor - April 23rd, 2023 [April 23rd, 2023]
- Indigenous Peoples Must Have Full Representation, Participation in ... - United Nations - April 23rd, 2023 [April 23rd, 2023]
- The EPA Region 6 Announces a Total of $23 Million to ... - U.S. EPA.gov - April 23rd, 2023 [April 23rd, 2023]
- Kansas governor strikes funding for anti-abortion pregnancy centers ... - Kansas Reflector - April 23rd, 2023 [April 23rd, 2023]
- Can You Fight for Climate Justice Without Being Antiwar? - Common Dreams - April 23rd, 2023 [April 23rd, 2023]
- Sustainable Tourism: A World leading to the road of Environment consciousness - Nomad Lawyer - NomadLawyer - April 23rd, 2023 [April 23rd, 2023]
- Atlanta's Cop City and the Struggle for Climate Justice - Resilience - April 23rd, 2023 [April 23rd, 2023]
- Jaishankars visit to Uganda, Mozambique went almost unnoticed but it indicated Indias bold gambit in Africa - Firstpost - April 23rd, 2023 [April 23rd, 2023]
- Natural resource - Wikipedia - October 30th, 2022 [October 30th, 2022]
- Non-renewable resource - Wikipedia - October 30th, 2022 [October 30th, 2022]
- Minister Wilkinson Launches Phase 2 of the Regional Energy and Resource Tables - Canada NewsWire - October 13th, 2022 [October 13th, 2022]
- Executive Secretary participates in Russian Energy Week to advocate for decarbonization in the UNECE region ahead of COP27 - UNECE - October 13th, 2022 [October 13th, 2022]
- Renault Group: The Future Is NEUTRAL: The circular economy is stepping into a new era! - Yahoo Finance - October 13th, 2022 [October 13th, 2022]
- Economy Expected to Contract Further in 2023, as the Fed Appears Resolved to Tame Inflation - PR Newswire - October 13th, 2022 [October 13th, 2022]
- Brazils Runoff Election Will Have Enormous Effects on the Global Climate Crisis - Truthout - October 13th, 2022 [October 13th, 2022]
- Health disparities and health inequalities: applying All Our Health - GOV.UK - October 13th, 2022 [October 13th, 2022]
- Opinion: Biopolitics is the invisible hand shaping mental health - The Connecticut Mirror - October 13th, 2022 [October 13th, 2022]
- Avaaz urges Georgieva and Trudeau to lasso-in commitments from IMF to attend December's vital UN Biodiversity Talks in Montreal - GlobeNewswire - October 13th, 2022 [October 13th, 2022]
- Kochi as a global city? Why not, asks the man behind Ahmedabads mega city story | Manorama English - Onmanorama - October 13th, 2022 [October 13th, 2022]
- Hennessy and Thurgood Marshall College Fund Announce partnership with Group Black and The Bishop Gallery to make "America's Most Influential... - October 13th, 2022 [October 13th, 2022]
- Pollution Prevention Week highlights ways to reduce, reuse and recycle waste - Michigan (.gov) - September 22nd, 2022 [September 22nd, 2022]
- England headed for incineration overcapacity, warns UKWIN - Resource Magazine - September 22nd, 2022 [September 22nd, 2022]
- 3 years of the Principles for Responsible Banking: our vision for change United Nations Environment Finance Initiative - UNEP Finance Initiative - September 22nd, 2022 [September 22nd, 2022]
- Isn't It Time To Challenge The Growth Paradigm? OpEd - Eurasia Review - September 22nd, 2022 [September 22nd, 2022]
- Coalition of Nearly 50 Organizations Launches 'Tear the Paper Ceiling' Campaign to Raise Awareness Around the 70+ Million Workers in the U.S. Skilled... - September 22nd, 2022 [September 22nd, 2022]
- Remote work can actually be more productive: More Hub readers respond to the work-from-home phenomenon - The Hub - September 22nd, 2022 [September 22nd, 2022]
- Mendocino Public Health on record-setting Sept. heat: We can't just treat this as a once-in-15-years occurrence - The Mendocino Voice - September 22nd, 2022 [September 22nd, 2022]
- Carbon Ridge Secures $6 Million Investment from Leading Climate Investors and Maritime Industry Leaders - Business Wire - September 22nd, 2022 [September 22nd, 2022]
- Regenerative Travel Is the Next Phase of Responsible Tourism - Outside Online - Outside - September 22nd, 2022 [September 22nd, 2022]
- NNPC: Between rebranding and reforms, By Tijah Bolton-Akpan - Premium Times - September 22nd, 2022 [September 22nd, 2022]
- Embodying the spirit of Malaysia - The Edge Markets MY - September 22nd, 2022 [September 22nd, 2022]
- Nonprofit executive takes on state-appointed economic development role - MiBiz: West Michigan Business News - August 29th, 2022 [August 29th, 2022]
- Noble Mineral Exploration Signs Exploration Agreement with the Constance Lake First Nation - Junior Mining Network - August 29th, 2022 [August 29th, 2022]
- China and the Democratic Republic of the Congo: A Progressively Deepening Bilateral Partnership - The Geopolitics - August 29th, 2022 [August 29th, 2022]
- Oil money is flooding into Guyana. Who will benefit? - Reuters - August 29th, 2022 [August 29th, 2022]
- Remote-work revolution exposes need for better data, tracking tools to evaluate workforce, pay and economy - The Spokesman Review - August 29th, 2022 [August 29th, 2022]
- We need rare earth elements for a greener future, but there's a catch - CBC.ca - August 29th, 2022 [August 29th, 2022]
- BRNHA the steward of the living traditions of WNC: Opinion - Citizen Times - August 29th, 2022 [August 29th, 2022]
- The Fiji Times Back in history: Future of forestry sector - Fiji Times - August 29th, 2022 [August 29th, 2022]
- Hochul announces grand opening of Capital Region BOCES Career and Technical Education Center - Troy Record - August 29th, 2022 [August 29th, 2022]
- Predicting the Future of Greenhouse Gas Emissions - Columbia University - August 15th, 2022 [August 15th, 2022]
- JD.com Ranks 46th on 2022 Fortune Global 500 - Yahoo Finance - August 15th, 2022 [August 15th, 2022]
- Minister Wilkinson Releases New Report Showing the Impacts of Climate Change and Necessity of Climate Adaptation in Ontario - Canada NewsWire - August 15th, 2022 [August 15th, 2022]
- Do Armenians have a future as an independent nation? Part 4 - Armenian Weekly - August 15th, 2022 [August 15th, 2022]
- Getting the diagnostics right 2 - BusinessWorld Online - August 15th, 2022 [August 15th, 2022]
- GrammaTech and T.E.N. Announce Call for Nominations for Product Security Executive of the Year Awards - Business Wire - August 15th, 2022 [August 15th, 2022]
- Energy Vault and Jupiter Power Announce Agreement for Battery Energy Storage Projects in Texas and California Totaling 220 MWh - Business Wire - August 15th, 2022 [August 15th, 2022]
- The North East LEP: Thinking bigger and planning together for the future - Bdaily - August 15th, 2022 [August 15th, 2022]
- It's not enough to buy American. You also need to sell American all around the world. - The Ripon Society - July 27th, 2022 [July 27th, 2022]
- Bid to designate 50k acres in UP as wilderness highlights tension over public lands - MLive.com - July 27th, 2022 [July 27th, 2022]
- A 'Living Wall' At Texas A&M Could Be The Key To Smarter Cities - Texas A&M University Today - July 27th, 2022 [July 27th, 2022]
- Architects and designers must embrace the circular economy - Project Scotland - July 27th, 2022 [July 27th, 2022]
- Strategic Minerals increases Tin and Tantalum production in June and Q2 2022 at its Penouta Mine - Yahoo Finance - July 27th, 2022 [July 27th, 2022]
- Issues of the Environment: Improving recycling rates and quality of recycling materials in Washtenaw County - WEMU - July 27th, 2022 [July 27th, 2022]
- Joe Oliver: The Liberal Cabinet Needs an Intervention - The Epoch Times - July 27th, 2022 [July 27th, 2022]
- SDG&E and Cajon Valley Union School District Flip the Switch on Region's First Vehicle-to-Grid Project Featuring Local Electric School Buses Capable... - July 27th, 2022 [July 27th, 2022]
- Reimagining business: The greatest debt of all time - Newsroom - July 13th, 2022 [July 13th, 2022]
- Moody's affirms A1 rating of Newfoundland and Labrador, changes outlook to stable - Moody's - July 13th, 2022 [July 13th, 2022]
- New Mexico's oil and gas revenues are breaking records and complicating budgets - New Mexico Political Report - July 13th, 2022 [July 13th, 2022]
- FACT SHEET: White House Announces over $40 Billion in American Rescue Plan Investments in Our Workforce With More Coming - The White House - July 13th, 2022 [July 13th, 2022]
- The Class of 2022 Is Ready to Workon Their Terms - SHRM - July 13th, 2022 [July 13th, 2022]
- Faraday Copper Announces Updated Mineral Resource Estimate for the Copper Creek Project in Arizona; Measured and Indicated Mineral Resources Exceed... - July 13th, 2022 [July 13th, 2022]
- Inside the Triangle's latest job opening data: What boards are showing and who's hiring - WRAL TechWire - July 13th, 2022 [July 13th, 2022]
- Reserve Bank keeps blinkers on inflation, raising OCR to 2.5% - Stuff - July 13th, 2022 [July 13th, 2022]
- Abe's drive to bring back Japan | The Interpreter - The Interpreter - July 13th, 2022 [July 13th, 2022]
- UCF Hospitality Researchers Expertise Is Tapped for Global Sustainable Tourism Report - UCF - June 30th, 2022 [June 30th, 2022]
- Feminist Economics and the Fight for Human Rights - OHCHR - June 30th, 2022 [June 30th, 2022]
- Biden Administration announces historic coastal and climate resilience funding - National Oceanic and Atmospheric Administration - June 30th, 2022 [June 30th, 2022]
- Why green ammonia will be the workhorse of EU's future hydrogen economy - EURACTIV - June 30th, 2022 [June 30th, 2022]