Kwabena Adu Koranteng Reports
The Minister of Finance, Ken Ofori-Atta, is expected to presents the Budget Statement and Economic Policy of the government for the year ending December 31, 2019 in Parliament this morning.
The presentation of the budget statement is in accordance with Article 179 of the 1992 Constitution which stipulates that: “The President shall cause to be prepared and laid before Parliament at least one month before the end of the financial year, estimates of the revenues and expenditures of the Government of Ghana for the following financial year.”
An economist and development expert, Dr Eric Obeng has indicated that the 2019 budget and economic policy of Ghana must clearly identify measures to speed up growth, boost revenue, strengthen the cedi, create sustainable jobs, and improve the viability of the free SHS policy and deal with the side effects of the IMF’s prescriptions.
He said the 2019 Budget would be quite distinctive in the sense that it would be the first post-IMF Budget since the implementation of the Extended Credit Facility in 2015. “The government must come out with programs to fast-track the growth of the economy beyond the IMF’s diagnosis” he stated.
According to him, the steps taking by the BoG to salvage struggling Banks to enhance soundness in the financial sector are commendable especially as Ghana is moving from the IMF’s intervention. “The BoG must operationalize the deposit protection scheme established under the Ghana Deposit Protection Act, 2016 (Act 931) and address specific risks from high non-performing loans, poor corporate governance and poor risk management systems. The regulator must ensure that Banks implement the International Financial Reporting Standards, and strengthen the capacity and resources of the Banking Supervision Department to improve supervisory procedures”
On the revenue side, he said the budget must widen the tax base and encourage corporate entities to file their tax returns. “The Finance Minister has disclosed that lots of corporate companies have defaulted in paying taxes to the tune of Three Billion Ghana Cedis (GH¢3bn). Many of the Pay as You Earn companies in the country have issues in paying taxes. The 2019 budget must strengthen GRA to collect taxes for the country with optimum efficiency as mandated by Section 3 of the Ghana Revenue Authority Act, Act 791.The 2019 budget must focus on supporting private companies to produce more and be able to export. More investment is required to produce more food and reduce the country’s huge food import bill” he demanded.
“In the 2019 budget, we expect the government to outline measures of sustainability to support the NABCO intervention. We don’t want the country to face a shock therapy when paying the participants in future. There is the need for the government to collaborate with the local government authorities, private sector and civil society organizations to fashion out a sustainability strategy. Whilst implementing the NABCO model, efforts must be made to create permanent and decent jobs for the teeming unemployed graduates. It is time for the private sector to be supported to complement initiatives to create jobs. A strong private sector can offer the best sustainable solution to the unemployment challenge.
The free SHS policy implementation is an important investment that Ghana is making in the youth and in the future of our country. This is commendable and all stakeholders must contribute to its success. The 2019 budget must provide room for minimizing the infrastructural deficit that called for the introduction of the double track system. Considering the current economic situation of the country and the fact that the public debt stock reached GH¢159.4 billion as at August 2018 as reported by BoG, it is important for government to think of other possible sources of funding the Free SHS program. The 2019 budget may consider the establishment of an endowment fund and a special levy.
Meanwhile, Minority in Parliament is predicting that the government will introduce new taxes. These new taxes, according to the Minority Spokesperson on Finance, Cassiel Ato Forson, will be the Finance Ministry’s solution to bridging the gaping fiscal deficit.
“We know that government will introduce some form of tax. Obviously, the tax will happen because of the fiscal gap. Looking at the kind of expenditure that this government wants to heap on the economy and looking at the revenue — already the revenue is not doing well and the fact that they want to do a fiscal deficit not exceeding 5% — there is certainly a fiscal gap.
“How do you close that fiscal gap? You have to introduce a tax measure,” Mr Forson said.