Efficient shift system key to 24-Hour Economy success — KPMG

Accounting and advisory firm, KPMG, has stated that the proposed three-shift system for continuous operations at the work place envisaged under the 24-Hour Economy can boost production by efficiently utilising time slots.

It said the policy, one of the measures of the government to stimulate economic growth, might also lead to more hiring, especially in sectors such as manufacturing, retail and other untapped industries.

The advisory firm, however, cautioned that improper shift management could put employees at risk of overworking, but ensuring fair rotation, scheduling and equal distribution of shifts was as essential as it could be complex.

“Implementing an automated shift scheduling system would enhance effectiveness in shift management. By leveraging digitalisation, such systems can optimise scheduling, reduce administrative burdens, and ensure compliance with labour regulations, thereby improving overall operational efficiency,” the accounting firm said in its post-budget analysis issued last Friday.

Risks

KPMG said the 24-Hour Economy posed significant security and health risks for employees, and therefore appropriate measures were required to protect them.

The firm also stressed the importance of renegotiating collective bargaining agreements to incorporate flexible shifts and ensure compensatory rest periods for employees.

“With the right measures in place, key risks, including employee work-life balance, security issues, and legal challenges due to misalignment with regulations, can be mitigated,” KPMG said in its post-budget analysis.

Context

Before the budget, KPMG, with the support of the United Nations Development Programme (UNDP), conducted a pre-budget survey in which respondents shared their expectations and expressed their support for bold new measures to be announced.

Immediately after the budget and economic policy of the government was presented to Parliament by the Minister of Finance, Cassiel Ato Forson, the KPMG/UNDP again organised a post-budget forum to break down policy measures and explain the intentions in the budget.

The analysis and commentary, therefore, cover the review of the economy, the external and internal economic environment, the revenue and expenditure measures, key initiatives and examines the outlook.

Key initiatives

As part of the budget, the government announced its intention to implement innovative policies and strategic investments to modernise agriculture and make it attractive to create jobs under an initiative called “Agriculture for jobs”.

KPMG’s analysis advised that the policy should be focused on implementing innovative strategies to make the agricultural sector appealing to skilled professionals and tertiary students.

It said the initiative should develop training programmes and extension services to ensure that farmers were equipped with new technologies, adding that collaboration with agriculture technology (agritech) companies, research institutions and rural cooperatives was essential to create a supportive ecosystem for innovation.

On the Adwumawura Programme, a business startup policy designed to facilitate the creation, tracking, and mentoring of at least 10,000 businesses, with focus on young people, KPMG said a structured startup ecosystem would provide a platform for mentoring, access to finance and performance tracking, which could reduce the typical failure rate of startups.

However, tracking the performance of 10,000 startups requires significant resources and a reliable framework and the accounting firm suggested that the government entrepreneurship support from state enterprises could be leveraged to provide business development support to those startups.

Again, KPMG wants the government to partner with business incubators and accelerators with clear performance metrics which should be matched with regular performance reviews, peer networking, and additional support for struggling ventures.

Big Push

The budget allocated GH$13.85 billion for the implementation of the $10 billion investment in strategic infrastructure to create jobs and drive economic growth.

KPMG stated that while such large-scale investments had the potential to boost economic development, their success depended on effective funding strategies, implementation efficiency, and long-term sustainability, and therefore the government should anchor the initiative on those three pillars.

“A $10 billion investment requires a careful mix of financing sources to avoid excessive debt accumulation from over-reliance on loans.

The government could leverage Public-Private Partnerships (PPPs) to attract private sector investment,” the firm suggested.

It also said infrastructure projects were prone to cost overruns, inefficiencies and mismanagement.

Therefore, strong project execution controls and anti-corruption measures in addition to project quality assurance must be implemented to ensure transparency, an essential imperative for the success of the initiative.

KPMG also advised the government to be intentional about the maintenance of infrastructure to ensure sustained benefits for the country.

Tax measures

On taxes, the accounting firm said adjusting the tax-free threshold of personal income tax band from GH¢490 to GH¢539 to reflect the minimum wage aligned with the principle of progressive taxation as it would provide relief to low-income earners and indirectly increase their disposable incomes.

The budget also proposed increasing “the Growth & Sustainability Levy (GSL) from one per cent on the gross production of mining companies to three per cent to enable the nation to have its fair share of the windfall from increase in gold prices. We also propose to extend the sunset clause to 2028.”

KPMG said although the measure was expected to bring in additional revenue to the state, some of the-players in the industry had stability clauses in their development agreements that protected them from adverse changes in tax.

To maximise the revenue potential from the proposal, KPMG proposed an extensive stakeholder engagement.

However, it said extending the GSL and the Sanitation and Pollution Levy (SPL) would potentially undermine the concept of certainty of tax policy and, therefore, the accounting firm urged the government to consider more permanent proposals to enable taxpayers to plan their tax affairs.

KPMG said the proposed review of the Energy Sector Levies Act (ESLA) to consolidate the Energy Debt Recovery Levy, Energy Sector Recovery Levy (Delta Fund), and its merger with Sanitation & Pollution Levy into one levy for the proceeds to cater for the energy sector shortfalls and inherited debt obligation might adversely impact the already underfunded sanitation sector.

“Sanitation still remains a major concern and innovative financing methods are needed to address this concern,” KPMG said.

KPMG added that the proposed removal of the betting tax required careful consideration of competing interests, being mindful of the risk of promoting excessive gambling among the youth in the face of the growth stimuli the policy occasioned for the gaming and betting industry.

E-Levy repeal good

The accounting firm also supported the repeal of the E-Levy as it would make digital transactions cheaper and vitalise digital payments and mobile money adoption to the benefit of businesses that relied on cashless transactions.

The repeal could also accelerate the country's transition to a digital and cashless economy.

KPMG also supports the government's initiative to launch a sustained and rigorous tax education campaign, saying the effort would not only improve tax compliance but also foster trust and confidence in the tax system.

“Furthermore, the introduction of quarterly tax dialogues among stakeholders will facilitate swift issue resolution, inform improved tax policies, and promote collaboration,” it said, adding that the dialogues would help create a more transparent and effective tax environment.