Graphic/Stanbic Breakfast meeting: Find new sources of revenue - Dr Twumasi Baffour to govt
A Senior Lecturer at the Department of Economics, University of Ghana, Legon, Dr Priscilla Twumasi Baffour, has said it is important for Ghana to find creative ways to increase the revenue base for the economy.
She said the economy was predominantly informal and so any attempt at tax rationalisation and digitisation moves to improve resource mobilisation should assess how much could be derived from the informal sector.
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“For the formal sector it is being done through direct taxes. We need to think through critically how we can get the majority of the informal sector on board the tax revenue mobilisation,” she said at the Graphic Business/Stanbic Bank breakfast meeting in Accra on Tuesday, November 2, 2021.
It was on the theme, “Pre-budget 2022: Insights and Recommendations,” and brought together key stakeholders in tax mobilisation and administration, and the business community.
Expenditure
Touching on expenditure, she noted that it was important to assess the efficiency of every cedi spent by the government.
She deduced that basically, the problem of economics was about meeting unlimited wants with limited resources and so it was necessary to prioritise areas for spending.
Dr Baffour said Ghana needed to plan to get value for money, looking at the different phases of economic planning it had gone through.
“Are we getting value for money for the expenditure that government rolls out there? If we are, then what is happening with a lot of uncompleted projects we find and the trend with judgement debts? “These are all the use of public funds,” she said.
Natural resources
She noted that Ghana was endowed with resources but that was currently doing four per cent to Gross Domestic Product (GDP) compared to countries such as Botswana whose natural resources were contributing between 18 and 20 per cent of GDP through resources.
“Investors come in and we accept what they give because we don’t have the resources to exploit.
“Resource exploitation comes with effects on the environment. Citizens ought to benefit from the exploitation of those resources because they are renewable as well.
Growth path
According to Dr Baffour, Ghana’s growth trajectory had moved from agriculture to services contrary to the norm.
However, she said the pattern had shown that the agriculture sector was losing its hold and the services sector was taking over as main driver.
“The challenge is that services are not labour-intensive activities and require more than average education. It requires tertiary educated graduates and was also dominated by informal sector activities and that explains the precarious job situation we find in Ghana,” she explained.
“Based on the current urbanisation drive, we must find ways to get back to the relevant middle (industry), which employs the average high school to technical school graduate.”
“So, on the back of that the 1D1F initiative is in sync with an industrialisation drive. But the point is how are we monitoring the companies that are beneficiaries because we need to task them to produce evidence of employment,” she said.
Budget
The Managing Director of Graphic Communications Group Limited, Mr Ato Afful, emphasised that the 2022 budget and economic policy like any budget was not only about businesses but also about the entire citizenry.
Therefore, he said any discussion should focus on the various segments of the economy and players therein.
“It is through the budget that government aims to allocate resources in line with economic (profit maximisation) and social (public welfare) priorities of the country.”
“Therefore, creating and using budget is not just for businesses,” he said.