Potential of 2018 budget to transform economy - Researchers express mixed feelings

Researchers at the Institute of Statistical, Social and Economic Research (ISSER) have expressed mixed feelings about the potential of the 2018 budget to transform the economy.

While commending the government for taking bold steps in its financial and fiscal policies, they also stressed that the budget failed to offer sustainable policy directions on some key issues of national concern.

For instance, the researchers said social issues such as the regulation of gaming and betting, the use of tobacco, the advertising and marketing of alcoholic beverages, as well as made-in-Ghana goods were omitted from the budget.

The researchers made those observations in a media interaction on the 2018 budget at the premises of the ISSER in Accra yesterday.

The Minister of Finance, Mr Ken Ofori-Atta, presented the budget statement to Parliament on November 15 this year, touching on key areas of the economy, including education, health, agriculture and the industrial and service sectors.

High points

In his presentation, the Head of the Economics Division of ISSER, Dr Charles Godfred Ackah, said the fiscal interventions by the government signalled by the 2018 budget projections were good and in the right direction.

He, however, said for the projections to be realised, it was important for robust local mobilisation of revenue to meet the revenue targets, and stressed that “should the revenue targets be missed, the government will be forced to sacrifice capital spending and medium-term growth.”

“It is important for the government to remain disciplined in its spending so that the macroeconomic gains made in 2017 can be further consolidated,” he stated.

Dr Ackah described the philosophy behind the 2018 budget, as reflected in the theme, as timely, especially when economic growth and job creation were global priorities.

He touted initiatives such as the one-district, one-factory policy, the National Industrial Revitalisation Programme (NIRP), tax incentives for young entrepreneurs and electricity tariff reforms that were given priority in the 2018 budget as capable of boosting the economy.

Low points

Dr Ackah, however, said the budget failed to point out how the government was going to tackle the menace of gaming and betting among the youthful population of the country.

“We expect the government and Parliament to regulate the gaming and betting menace, as well as the use and marketing of alcoholic beverages, but these were not captured in the budget.

“The budget was also silent on giving a clear policy direction on promoting made-in-Ghana goods,” he said.

A research fellow at ISSER, Dr Fred Dzanku, added that the 2018 budget oversimplified the policies of the agriculture sector to the registration of farmers and supply of improved seeds and fertilisers.

He said the Planting for Food and Jobs (PFJ) agriculture policy in its current state could only produce short-term results without having the potential of long-term improvement of the sector.

“We at ISSER do not see the handouts given to farmers as a sustainable way of improving agriculture, especially when the government wants to have long-term improvement in the sector.

“Every year, the budget makes provision for these handouts for farmers but no real impact has been made in the agriculture sector, meaning that it is not the way to go,” he said.

Development bank

The Head of the Department of Economics at the University of Ghana, Prof. Peter Quartey, said it was important for the government to establish a development bank that would solely focus on financing agriculture and manufacturing sectors to boost job creation.

He also said the 2018 budget seemed to have focused job creation initiatives on only unemployed graduates when there were more secondary school leavers who were also unemployed.

Prof. Quartey said if the development bank was established, it would boost the agriculture and manufacturing sectors and create jobs for illiterates and the less educated youth.