Editorial: Businesses keenly await Minister of Finance’s budget

The 2023 budget and economic policy must prioritise economic stability and recovery, with local solutions at the centre, says the Ghana National Chamber of Commerce and Industry GNCCI and the Association of Ghana Industries (AGI).
File photo: Finance Minister Ken Ofori-Atta going to present a budget in parliament

Minister of Finance, Ken Ofori-Atta, is scheduled to present government’s 2024 Annual Budget Statement and Economic Policy to parliament tomorrow.

Ahead of the presentation, there have been calls for government to significantly reduce its expenditure and widen the tax net.

Director-Institute of Statistical, Social and Economic Research (ISSER), University of Ghana, Professor Peter Quartey has urged government to intensify policies to support the manufacturing industry as part of efforts to achieve the objective of increased local production and value addition.

This is because manufacturing is able to transform the economy by expanding production and the export base, directly increasing employment, income and state revenue.

His concerns come on the back of the 2022 by ISSER state of Ghanaian economy report, which indicated that manufacturing had slowed down.

After an impressive performance of 8.1 percent growth rate in 2021, the manufacturing sub-sector recorded a negative growth rate of 2.5 percent in 2022. A contributor to this negative growth could be the inflationary pressures experienced in 2022.

While presenting the state of Ghanaian economy report 2022 and Quarter Three (Q3) Economic Performance in Accra, Professor Quartey therefore stated that domestic initiatives should aim at increasing productivity and output in key primary sectors and value chains.

Dependence on a few primary commodity exports (mainly gold and cocoa) makes Ghana vulnerable to volatile commodity prices in the global marketplace.

The report further indicated that the industrial sector recorded a modest growth of 0.9 percent in 2022, following poor performances in 2021 and 2020. However, Prof. Quartey noted that issues with high taxes and general cost of doing business remain a worry.

Indeed, the Industrial sector’s recovery over the medium-term will depend significantly on the extent to which policymakers are able to restore and consolidate macroeconomic stability in the medium-term.

To this end, government must ensure prudent spending and reduce taxes on production, since taxing production excessively is affecting industry, promoting imports and worsening the already high unemployment situation.

The report indicated that the economy’s largest sector, services, recorded the highest growth rate (5.5 percent) in 2022 – though considerably lower than the 9.4% recorded in 2021. Agriculture on the other hand grew by 4.2 percent in 2022, much lower than the 8.5 percent rate of 2021.

Leave a Reply