“Building a sustainable entrepreneurial nation: fiscal consolidation and job creation”
In early 2021, Ghana, like many other countries, began to chart a course for economic recovery in the hope of restoring macroeconomic stability to pre-Covid-19 levels. Despite the government’s ambition and aspiration, the country experienced a third wave of the pandemic, which again disrupted economic activities and affected households and individuals. This called for a higher priority for the health, safety and well-being of citizens, which subsequently impacted government spending.
While we are not yet out of the woods, it appears that the economy is on a recovery path, albeit at a slower pace but quite competitive compared to our peers in the sub-region. The macroeconomic growth rate at the end of June 2021 amounts to
3.5% against a projected growth rate of 5.1% full year 2021.
On November 17, 2021, the Minister of Finance, Hon. Ken Ofori-Atta presented the budget and economic policy statement (the budget) under the theme, “Building a sustainable entrepreneurial nation: fiscal consolidation and job creation” to Parliament on behalf of the President, Her Excellency Nana Addo-Dankwa Akufo-Addo.
With this budget, the government seeks to support recovery efforts and restore economic growth to pre-pandemic levels while achieving sustainable debt levels.
According to the recent population and housing census, the group of young Ghanaians is growing at a flourishing rate amid high unemployment. The government intends to find innovative solutions to combat the unemployment problem in the country. Several policies have been deployed in the past to save the employment situation by successive governments. We believe much more could be done through a collaborative effort with the private sector. Rising debt levels, which has been a major concern for the economy, require drastic debt management measures to bring it down to sustainable levels.
To achieve and achieve the objectives of the 2022 budget, the government has defined the following main areas of macroeconomic intervention:
- Ensure restoration and sustained macroeconomic stability with an emphasis on debt sustainability.
- Build a strong financial sector to support growth and development;
- Maintain a good balance between the implementation of the revitalization and transformation program and fiscal consolidation to promote growth in a stable macroeconomic environment;
- Provide an enabling environment for the private sector (including the promotion of entrepreneurship) for domestic enterprises and for foreign direct investment (FDI) to flourish;
- Deepen structural reforms to make the government apparatus work more efficiently and effectively to support socio-economic transformation. In particular, implement reforms to increase revenue mobilization and the efficiency of public spending.
- Using digitization to increase tax revenues, widen the tax net and control spending
We encourage the government to consolidate the gains of digitization by harnessing the data to uncover predictive models and insight into key areas of the economy for decision making.
We also encourage the government to ruthlessly implement the policies set out to consolidate the gains made on the path to economic recovery. This should bring certainty to the business environment and ultimately stimulate job creation.
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