High expectations for 2024 Budget
The Minister of Finance, Ken Ofori-Atta, will present the 2024 Budget to Parliament today, with people familiar with the economic policy statement hinting of prioritisation of the needs of young Ghanaians as part of an economic growth agenda.
According to highly-placed sources, the vision to rope in the teeming youth would be accomplished through the expansion of existing initiatives and policies towards youth empowerment.
“Next year is thus likely to witness massive private sector job creation through initiatives such as Planting for Food and Jobs, One-District, One-Factory” “YouStart” and investment in the education and skills training of young people,” one of the sources told the Daily Graphic.
Following on the heels of the Ghana Mutual Prosperity Dialogues, it is expected that the government will be supporting the private sector to create thousands of jobs within the year from vehicle assembling and garments manufacturing for exports.
The Ghana Mutual Prosperity Dialogues is an ongoing collaboration between the public and private sectors to boost growth, crowd in investment and create jobs, especially for young people.
“This purpose fulfils goals eight and nine of the Sustainable Development Goals,” the source added.
The goals are to promote sustained inclusive and sustainable economic growth; full and productive employment and decent work for all, as well as building resilient infrastructure, promoting inclusive and sustainable industrialisation and fostering innovation.
“The current indication is, therefore, that the government, through the 2024 budget, will promote inclusive and sustainable growth and socio-economic development,” the source familiar with the 2024 Budget said.
Ahead of today’s presentation, expectations have been high for the last budget by the President Akufo-Addo government, to deliver policies and programmes that will further stabilise the economy, which they consider necessary to help businesses and individuals to plan and ultimately lead to job creation.
Both the private sector and households are expecting measures that would cushion them against the challenging economic terrain.
Key among the expectations are measures to support infrastructural development, particularly to continue some of the important roads that have stalled, job creation and the need to make existing taxes perform better instead of introducing new ones.
President Akufo-Addo has since 2017 presented six budgets on various themes, with the 2024 budget being the seventh and his last major budget.
There will be no full budget presentation in 2024 to cover 2025, except for a mid-year review of the 2024 budget.
Instead, revenue and expenditure estimates for the first quarter of 2025 will happen in November next year to cater for the first quarter when a new President assumes the reins of power, as President Akufo-Addo completes his mandatory eight years in office, halved into two four-year terms.
With the 2017 and 2018 budgets prepared within an International Monetary Fund (IMF) programme, the rest were from the government’s own policy orientation until this year, when external and internal challenges compelled the government to seek support from the IMF again.
Ahead of the laying of the economic policy and budget, analysts, associations, civil society and think tanks have made varied inputs, with different demands on the government.
The Institute of Economic Affairs (IEA), a public policy think tank, has called on the government to provide protection for the citizenry in the 2024 national budget against current economic hardships.
The IEA said Ghanaians were experiencing severe hardships from the economic crisis and under the IMF’s Extended Credit Facility (ECF) arrangement.
The Director of Research of the IEA, Dr John Kwakye, in a statement, listed the crisis to include high inflation, high utility tariffs, high taxes and the effects of abolition or reduction of consumer subsidies.
Those challenges, he said, were happening against a slow pace of salary increases, public sector employment, and the negative effects of debt restructuring.
The policy think tank, therefore, reminded the government that it had made “some commitments under the ECF programme to strengthen social spending to protect vulnerable groups and that they must be honoured and even reinforced because it was necessary”.
The IEA suggested to the Ministry of Finance to ensure that the 2024 budget reviewed upward grants involving cash payments to poor households under the Livelihood Empowerment Against Poverty (LEAP) as it did in the 2023 budget.
“The scheme should also be reviewed and expanded as necessary to capture more eligible beneficiaries,” the statement advised.
On the Ghana School Feeding grant, it proposed, as a matter of urgency, an increase from GH¢1.20 announced in the 2023 budget to GH¢6 in the 2024 budget, adding that the numbers involved could not overburden the budget.
On the National Health Insurance Scheme (NHIS), the statement suggested to the government to prioritise its funding, while broadening its coverage and expanding the benefits package to provide adequate protection for vulnerable groups by including cancer and dialysis in the scheme.
“The 2024 budget should indicate a clear path to taming inflation on a durable basis and, thereby, reducing its associated economic hardships,” it stressed.
It said the Bank of Ghana’s demand-based Inflation Targeting (IT) framework had generally been ineffective in controlling inflation because it had strong supply and cost undercurrents.
The fight against inflation, the IEA said, should be a coordinated effort between the central bank (fighting the monetary side) and the government (the fiscal side), which had overall responsibility for the management of the economy.
Chartered Institute of Taxation Ghana
The Chartered Institute of Taxation Ghana has also sent a detailed proposal to the government.
The proposals include the revision of value added tax (VAT) and the scrapping of both the COVID-19 and electronic levies from the country’s tax regime, a Tax Partner at accounting and advisory firm, PwC Ghana, Abeiku Gyan-Quansah, said at a pre-budget discussion forum last Thursday.
It also suggested resolving tax disputes, approved tax consultants and technical support, the introduction of digital service tax, multiple taxes and levies on imports, among others.
Mr Gyan-Quansah, a member of the institute, said inputs from the institute, which were its ideas, proposals and recommendations to the government to guide its budgetary decision, must be taken into account to ensure that the welfare of citizens were protected.
Professors of finance
The Dean of Business School of the University of Cape Coast (UCC), Professor John Gatsi, said the 2024 budget statement should clearly provide a roadmap on how the government intended to mobilise and manage revenue efficiently as the country strived to overcome its current economic challenges.
Prof. Gatsi added that such a policy should not impose additional taxes, suggesting that improving tax collections, reducing the incidence of tax evasion and promoting economic growth could help the country maximise its tax revenue.
Another professor of finance of the University of Ghana Business School, Prof. Godfred Bokpin, entreated the government to abolish the electronic transfer levy (E-Levy), the COVID-19 levy and maintain the standard Value Added Tax (VAT) and peg the rate at below 18 per cent.
He also wanted an amendment of the Growth and Sustainability Act to rake in revenue from small businesses.
Prof. Bokpin called on the government to ease the tax burden on businesses and households to enable them to get the fiscal space to ensure growth enhancing activities such as investments.
The Civil Society Platform on Sustainable Development Goals (SDGs) advocated steps to scrap taxes on sanitary pads in the 2024 Budget and Economic Policy statement.
The organisation argued that the taxes, made up of 20 per cent import tax and 15 per cent VAT, had translated to a higher cost for the necessity from an average of GH¢7 to the current average cost of GH¢30 which was beyond the reach of many young girls and women.
A youth advocate, Angel Cudjoe, articulated the demands of the CSOs at a press conference in Accra.