06 August 2017

Gov’t target of increasing revenue by 48%, impossible – Financial Analyst

Dr. Said Boakye

A Senior Research Fellow of the Institute for Fiscal Studies (IFS), Dr Said Boakye, has cast doubts over the government’s plan to increase its revenue target by 48% before the end of the fiscal year.

Finance Minister, Ken Ofori-Atta during the presentation of the mid-year-review budget last Monday, admitted a shortfall in revenue mobilization and indicated a 48% upward adjustment in order to make up.

But speaking on the Super Morning Show Tuesday, Dr. Said Boakye observed “a lot of loopholes” in the review which the government would have to reconsider.

He said the planning process to determine targets has to be more accurate”.

The Financial Analyst commended the Finance Minister for trying to scale down on revenue projection but cautioned that that could also come with a cost.

“It is very good that you try to tame your spending but if your revenue planning is wrong, you are going to contain your expenditure…48% increase in revenue into the second quarter is getting into the realm of impossibility”.

The fiscal illusion
Senior Lecturer, Economics Department & Head, Department of Distance Education, University of Ghana, Dr. Eric Osei Asibey who was part of the discussants, observed many loopholes in the revenue system which must be plugged in order to sustain fiscal stability.

Dr. Osei Asibey called for the establishment of monitoring institutions that will enforce and track the performance of governments instead of relying on politicians.
“More often than not we turn to get this fiscal illusion where politicians will tell one thing and do the other. 

“That difficulty is always there when it comes to balancing politics and prudent fiscal management,” said the Senior Research Fellow at the Institute of Economic Affairs (IEA).

Former Deputy Finance Minister, Fifi Kwetey wants the government to exercise caution in patting itself the back for ensuring fiscal discipline.

He said the benefits of stabilising the economy should be felt at the local economies of the district and municipal levels.

“If you are unable to provide them [district and municipal assemblies] with the means and wherewithal; you are literally holding the country [and] retarding the country,” the former Transport Minister for Transport in the erstwhile John Mahama administration. 
The Ketu South MP says, the real issues are how these gains are translated into increasing productivity and creating jobs for Ghanaians that are the real issues.

However, Deputy Information Minister, Kojo Oppong Nkrumah says the government is determined to “maintain this level of fiscal stability” because “that’s where the real meat is”.

Admitting that government did not pump much money into the goods and services sector where it recorded a shortfall of about 30%, Mr. Nkrumah is hopeful the figures will peak up by the end of the fiscal year.

Listen to an excerpt of the discussion in the audio attached:

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