The Institute of Statistical, Social and Economic Research (ISSER) has called for aggressive domestic revenue mobilization through efficient tax and non-tax revenue-generating measures to firm the country’s fiscal space.
The Institute also called for a unified common platform for collecting property rates to boost domestic revenue.
Professor Peter Quartey, Director, ISSER, speaking at this year’s mid-year budget in Accra, commended the Government’s plan to spend within its means, but said achieving a fiscal deficit of 6.6 per cent of Gross Domestic Product (GDP) was ambitious and daunting.
The Government in the 2022 mid-year budget statement revised the country’s GDP growth rate from 5.8 per cent to 3.7 per cent in 2022.
He urged the Government to re-introduce the collection of road tolls using the electronic-pass system, stressing that the outright removal of the tolls would not help in public-private partnership arrangements.
According to the 2022 mid-year review “deficit is expected to be financed from both domestic and foreign sources but domestic financing is the key driver.”
The professor, however, urged the Government to focus on the private sector to achieve the target, since domestic financing was 5.4 per cent of GDP.
Touching on the 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 would not be able to meet its target of over GHS 6.9 billion.
He said the half-year 2022 figures showed a deviation of -40.8 per cent in the amount spent on Goods and Services, stressing that the country paid so much in wages and salaries but less for goods and services.
He called for staff performance evaluations across the public sector, stating that wages and salaries as a percentage of tax revenue were 44.3 per cent, while compensation to employees stood at GHS 37,948,992,821 out of GHS 96,842,134,702.
Touching on export commodities, he said the country still depended heavily on revenue from raw material exports and called for the need to modify structures to add value to primary products as a means of adapting to the increasingly volatile world economy.
Proceeds from gold exports declined to USD 5.08 billion from USD 6.8 billion for 2020 and 2021 respectively.
The reduction 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.
At the free Senior High School, Dr Osei Akoto, Head of Economic Division, ISSER, 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.
In the health sector, he said the Agenda 111 vision of the Government was commendable but might not be realized by the close of the year, urging authorities to increase resources to ensure health equity in the face of the ongoing fifth wave of COVID-19 and the pending risk of monkeypox, and the Marburg diseases.