Business News of Wednesday, 21 November 2018
The Institute for Fiscal Studies (IFS) has cautioned government to tread cautiously over its revenue projections in the 2019 budget statement.
The Institute said exiting the International Monetary Fund (IMF) programme will make it difficult to meet the revenue target of more than ¢58 billion.
IFS in a post-budget press conference Tuesday noted that the revenue target for the year is over projected and will create problems for the Akufo-Addo government.
Government’s total revenue and grants for 2019 are estimated at ¢58.9 billion, 17.1 percent of the rebased GDP, up from a projected outturn of GH¢46.8 billion, constituting 15.7 percent of the rebased GDP in 2018.
According to the Finance minister Ken Ofori-Atta, government is committed to instituting measures to help meet the target.
But at its first post-budget media briefing in Accra, the Institute for Fiscal Studies noted that the revenue target is over projected and must be reviewed.
Research Fellow at the Institute, Leslie Dwight Mensah addressing the media called for a total overhaul of some public sector programmes to minimize government expenditure.
“The public sector reforms that had been long delayed should be carried out as a matter of priority. The reforms should include right-sizing of the sector to reduce what is obviously an over-bloated payroll, plagued by, among others, large numbers of ghost names and other irregularities” he noted.
The Institute also called for a reexamination of some of government’s policy initiatives, especially the consumption-based ones.
This includes nursing and teacher trainee allowances, as well as some components of the Free Senior High School (SHS) policy, with the aim of streamlining them so as to reduce costs while exploring other non-government funding options.
IFS, however, lauded the Finance minister for the attention given to the Agricultural sector and other key sectors of the economy.
“Government has indicated that it plans to legislate fiscal responsibility after the IMF program. Furthermore, the medium-term budget deficit profile provides an indication of government’s commitment to enduring fiscal discipline and macroeconomic stability,” Mr Dwight Mensah added.