Accra, Ghana: The Institute of Statistical Social and Economic Research (ISSER) has stated that achieving Ghana’s economic targets in the upcoming election year will be a significant test for the government. This challenge is particularly pertinent given the historical trend of increased spending and fiscal indiscipline during election years.
According to Ghana News Agency, Director of ISSER, while speaking at the 2024 Budget Statement Review program, governments have historically tended to overrun budgets during election years. This pattern has occurred even under International Monetary Fund (IMF) programs, leading to high inflation, extensive budget deficits, and excessive borrowing. He emphasized that without strict adherence to fiscal rules, the country might face similar issues in the last quarter of the year.
Prof. Quartey commented on the ambitious nature of achieving the end-period inflation target of 15% in 2024. He believes it is achievable, but only if the government steadfastly adheres to prudent fiscal and monetary policies. He also cautioned citizens to manage their expectations during this period, noting that government overspending to fulfill electoral promises could exacerbate the economic situation in 2025.
To ensure sound fiscal management, Prof. Quartey recommended various measures. These include reintroducing public road tolls, linking tax exemptions for local sanitary pad producers to their production capacity, monitoring the implementation and impact of tax reliefs on the private sector, and conducting regular procurement audits. Additionally, he advised investing the second tranche of the IMF Fund in completing existing infrastructure projects to prevent cost overruns due to delays.
Addressing the topic of electric vehicles, Prof. Quartey acknowledged the importance of tax reliefs but stressed the need for investment in complementary infrastructure, such as electricity and charging ports, to fully benefit from this initiative. He also highlighted the necessity to broaden the tax base, particularly by incorporating the informal sector, which comprises an estimated 60 to 70 percent of Ghana’s economy.