In an effort to provide an insightful analysis of Ghana's economic landscape, the Institute of Statistical, Social and Economic Research (ISSER) at the University recently unveiled the State of the Ghanaian Economy Report (SGER), 2022. The launch event, coupled with a thorough review of the 3rd quarter 2023 economic performance, served as a platform to dissect and discuss the nation's economic landscape.
Held at the ISSER Conference Facility, the event brought together key stakeholders and thought leaders in the economic development discourse. The discussions encompassed critical issues surrounding the country's economic situation and delved into the impact of the IMF programme on the lives of Ghanaians.
Underlining the significance of this comprehensive economic review, Prof. Peter Quartey, Director of ISSER, emphasised its role in providing time series data to benefit students, researchers, and policymakers. He noted that the report is intended to inform stakeholder budget consultations for 2024 and facilitate independent data analysis that can contribute to evidence-based policy development.
Prof. Peter Quartey, Director of ISSER
Presenting key highlights of the 32nd edition of the report, Prof. Quartey mentioned that "Ghana's economy has shown signs of recovery and it is likely to grow by about 3.0% by the end of 2023, all things being equal."
He commended the agriculture sector's resilience and expressed hope for the success of policies aimed at involving the youth in agriculture. He stated that the “agriculture sector remains resilient and Planting for Food and Jobs 2.0 should revitalise the sector.”
Professor Quartey, however, expressed concerns about the country's fiscal matters. He noted that while revenue had increased, reaching 15.8% of GDP, the rapid growth in expenditures, projected at 34.29% for 2023, and the lack of prudent spending practices were sources of worry. “This trend has resulted in a significant revenue-expenditure gap, equivalent to 6.4% of GDP, or approximately GHS 5.47 billion,” he outlined.
Furthermore, he highlighted the adverse effects of excessive taxation on production, which has inadvertently promoted imports and exacerbated the prevailing high unemployment rate in the country.
According to the Director, excessive taxes on production are hampering the growth and competitiveness of domestic businesses and those on food and beverages are contributing to the rising cost of living in the country.
"Taxing production excessively is affecting industry, promoting imports and worsening the already high unemployment situation. High taxes on food and beverages are fuelling inflation, and therefore, a critical review of some of these taxes is necessary," he added.
In light of the excessive taxes, Prof. Quartey advised the government to reduce taxes on production and broaden the tax base by implementing measures such as property rates. He argued that this would make taxes more reasonable and affordable for a larger segment of the population.
Prof. Quartey also highlighted the importance of maintaining fiscal discipline, stimulating productive sectors, and creating employment opportunities for a stable and prosperous economic future.
He also cautioned against a potential 30-40 percent haircut on Eurobonds, which could undermine investor confidence and take a long time to restore.
The Director further suggested that Government should invest in stimulating productive sectors and ensure responsible borrowing practices.
Chairperson of the event, Dr. James Asare-Adjei, the 19th President of the Association of Ghana Industries and Founder & CEO of Asadtek Group Limited, in his remarks, indicated that it was important for an independent institution to present the true situation of the economy since the political and business environments are clouded with multiple sources of information, making it difficult to determine the actual state of the economy. He underscored the relevance of the report in helping to critically examine the current economic situation and making projections and policies for the future.
While acknowledging the global challenges and their impact on giant economies around the world, Dr. Asare-Adjei mentioned that the insights and facts captured in the report would be beneficial to managers of the economy and industry players.
The eight-chapter report was compiled by a team of experts, including Prof. Peter Quartey, Prof. Isaac Osei-Akoto, Prof. Robert Darko Osei, Prof. Augustin Fosu, Prof. Charles Ackah, Dr. Ama Fenny, Dr. Fred Danku, Dr. Andrew Agyei-Holmes, Dr. Richmond Atta-Ankomah, Dr. Ralph Armah, Dr. Nana Ama Asante-Poku, Dr. Gloria Afful-Mensah, Prof. Festus Ebo Turkson and Dr. Daniel Osarfo.
