Director of the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana, Professor Peter Quartey, has said that the success of government’s promise to deliver one million jobs in the next four years will largely depend on how the private sector will respond.
His comments come on the back of finance minister Ken Ofori-Atta’s announcement in the mid-year budget presentation that government will, through the Ghana Coronavirus Alleviation and Revitalisation of Enterprises Support (Ghana CARES) programme, create some one million jobs in the next four years.
But Professor Quartey argues that the success of such an agenda will largely depend on how the private sector will respond, given that the Ghana CARES programme is heavily anchored on private sector participation, as the programme seeks to raise 70 percent of the GH¢100 billion fund from the sector.
“We need the jobs; yes, we need even more than the one million that has been targeted. But the question is the how and whether we are able to do that because government has to partner with the private sector. So the success of it will depend on the private sector’s response.
If the private sector responds positively, then, we are likely to generate more of this. So it has to be done and done well. It is a feasible target but it will depend on the private sector’s response to participate,” he said during ISSER’s post budget analysis event held at the University of Ghana.
The Institute also expressed concern about the country’s revenue generation efforts which has consistently fell short of target, as the budget indicates that the overall fiscal deficit of 5.1 percent of GDP fell marginally short of the 5.2 percent programmed for the first half of 2021.
To recall, government introduced some new taxes this year to boost domestic revenue. The new taxes have, as of the first quarter, yielded GH¢249.7 million in revenue, falling below the programmed target of GH¢358 million.
This, Professor Quartey says, calls for a critical assessment of the taxes to ascertain whether they are efficient means of raising revenue or they have become “nuisance” taxes that stifle private businesses.
“For me what is more critical is the new taxes that were introduced. We want to access them to see whether they are yielding the required revenue. Are they efficient? At the moment it is below the target and, I think, by the end of year we should know whether they are doing well or not and whether we should scrap some and introduce new ones.
We have to strike a good balance between tax revenue and non-tax revenue. Unfortunately, we have concentrated too much on the tax revenue. We have not done so well in raising revenue through non-tax measures like the state enterprises and other things. We usually focus on the tax revenue because, certainly, VAT and other levies are quicker ways of colleting revenue. But as to whether they are yielding the needed revenue for government to stimulate the economy or whether they are affecting businesses, we are yet to know,” he said.
He further advised government to keep expenditure in check in order to narrow the fiscal deficit which has been targeted at 9.4 percent of GDP.
“If government can raise the projected revenue above its programmed target and ensure that the expenditure envelope is intact, then the economy can outperform the revised fiscal deficit of 9.4 percent for 2021. This will invariably be a giant step in returning to the path of fiscal consolidation even before the expected date of 2024,” he said.