The Institute of Statistical, Social and Economic Research (ISSER) is charging government to reduce the public debt stock to sustainable levels by 2024 through prudent debt management strategy.
In its State of the Ghanaian Economy Report and Review of 2021 3rd Quarter Economic Performance, the research and economic think tank said debt service payments accounted for 62.1% of domestic revenue in 2020 (51.9% in 2019) and therefore require drastic action to bring the debt levels down
In the second quarter of 2021, Interest payments accounted for about 45% of total tax revenue. This ISSER said limits the fiscal space, thereby affecting capital expenditure/Investments needed to stimulate further growth
Furthermore, it also urged government to increase support to businesses affected by the Covid-19 pandemic to help accelerate the recovery process.
It pointed out that the negative impact of the pandemic on businesses despite the various interventions programmes instituted by government, indicates that government must do more to aid recovery in the economy.
On other recommendations, ISSER, said “crude oil prices have surged and above $70 per barrel with serious implications on transport fares, cost of production, prices of goods and services and livelihoods”. It therefore urged government to take steps to minimise the effects on the economy especially livelihood of the poor.
On whether the digitisation agenda is yielding fruits considering the value of tax revenue generated by September 2021, new tax measures were introduced in the 2021 budget and this yielded ₵249.7m in revenue for the first half of 2021 and fell below its programmed target of ₵358.1m.
ISSER recommended that since the Covid-19 Health Levy and the Financial Sector clean-up Levy seem to be performing better than the others, a critical assessment of these taxes is needed to ascertain whether they are efficient means of raising revenue rather than a “nuisance” tax that stifles private businesses.
Ghana’s economy registered appreciable growth rate
Ghana recorded appreciable growth rates since 2020 with oil Gross Domestic Product of 3.9% and non-oil GDP growth of 5.2% recorded in second quarter of 2021.
Although the country is among the fastest growing economies, ISSER said higher growth in labour-intensive sectors such as agriculture and manufacturing with high value addition is very critical in order to avoid the jobless growth syndrome.
The growth rates recorded it pointed out should definitely translate into creating sustainable jobs
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