Ghanaians expect ease in economic hardship as government presents 2024 budget

By Francis Ntow/Issah Mohammed/Paul E. Richardson

Accra, Nov. 15, GNA – The Finance Minister, Mr Ken Ofori-Atta, has started the presentation of government’s 2024 Budget Statement and Economic Policy to Parliament.

The presentation before Parliament, an annual routine, is in accordance with Article 179 of the 1992 Constitution, and Section 21 of the Public Financial Management Act (Act 921).

The 2024 budget, the last of the President Nana Addo Dankwa Akufo-Addo led-government, is being presented amidst high expectations of policies and programmes that would ease the economic hardship being faced by Ghanaians.

The Finance Ministry has described the budget as: “crucial because it is developed to support the implementation of the International Monetary Fund (IMF)-backed Post-COVID-19 Programme of Economic Growth (PC-PEG).”

It comes following a first review of Ghana’s three-year US$3 billion loan-support programme and would highlight the country’s economic performance, and ways to improve it.

It would also provide detailed information on efforts to boosting the productive capacity of the economy through the new Growth Strategy endorsed by Cabinet in October, to consolidate the stability of growth and tighten spending.

In the context of the current economic situation, government would also outline fiscal measures, debt management strategies, aimed at deepening stability and promotion of growth.

For Ghanaians, individuals and private sector operators alike, government, including policies and programmes that would maintain economic stability and ensure better living conditions in the 2024 budget is non-negotiable.

They do not expect government to introduce new taxes, rather, reduce the rates on Value Added Tax (VAT), and Electronic Transactions Levy (E-levy), while scrapping COVID-19 levy and special import levy.

That, in addition to ensuring a further decline in policy rate, inflation, and cedi depreciation, would be key in ensuring proper planning and investing in business expansions to create more jobs, especially for the youth.

In so doing, it would encourage individuals and businesses to promptly pay taxes to shore up government revenue.

“We want government to ensure that taxes on goods and services are reduced, so, we can get things at affordable prices,” Ama, a single mother of two children who sells beans with gari (gobe) in Accra said.

“Because of the high cost of goods in the market, I’m compelled to sell the food at a high price, which doesn’t satisfy customers, as a result, there’s low patronage,” she noted.

Samuel Barimah Donkor, a mason turned commercial bus assistant (Trotro mate), should create a system that would protect local workers and provide them with decent earnings.

“On the average masons are paid GHS150 and GHS200, but we sometimes, receive as low as GHS80,” Donkor, who has been assisting his brother in Trotro business for the past two months at Tema Station, Accra, told GNA.

“Foreigners, especially Togolese, are taking over the masonry work in the country. They are willing to receive as low as GHS50 per day, so, they end up getting more offers. This is making life unbearable for the youth in this country, and government must urgently do something about this,” he said.

Tono Richard works with Task Force – a group that help drivers to get passengers into their vehicles.

He said the current economic condition had made life difficult for him, with efforts to enter into the security service failing, “because applicants are made to pay huge sums of money to get entry.”

He called on government to make it easy for those who desired, and had the qualification, to enter the security forces to be able to cater for themselves and cater for their families.

“The stability we’re experiencing now, especially, for the first two quarters of 2023, is good for us,” Dr Joseph Obeng, President, Ghana Union of Traders Association (GUTA) said ahead of the budget presentation.

“Inflation has responded positively, and depreciation of the cedi has not been bad, but these are not at an appreciable level for businesses and industry to thrive,” he explained.

Mr Seth Twum-Akwaboah, CEO, AGI, at government’s inaugural Ghana Mutual Prosperity Dialogues, held earlier this month, reiterated the call for government to create an enabling business environment.

“In creating that congenial environment, we don’t expect to see several layers of regulations that only add up to the cost of doing business,” Mr Twum-Akwaboah noted.

Having recognised the economic hardship in the country, the Institute of Economic Affairs (IEA), a policy Think-Tank, has urged government to prioritise increasing social spending in the 2024 budget to comfort Ghanaians.

IAE proposed that the amount given to beneficiaries of the Livelihood Empowerment Against Poverty (LEAP) be increased, and coverage expanded, considering that some 850,000 Ghanaians had been pushed into poverty through inflationary pressures.

The Institute also asked that the GHS1.20 per pupil under the Ghana School Feeding Programme be made GHS6.00, and funding for the National Health Insurance Scheme (NHIS) expanded to cover cancer and dialysis.

In addition to increasing domestic revenue mobilisation efforts, and expenditure rationalisation, IAE also endorsed that government provide plans to resuscitate defunct Ghana Airways, and Black Star Line – a national shipping line.

There should also be clear investment plan to revive the operations of the Tema Oil Refinery (TOR), currently owing some US$400 million, and had not refined crude oil since May 2021.

Meanwhile, the implementation IMF loan-support programme, has started yielding fruits, with Ghana recording an average growth of 3.2 per cent for the first two quarters of 2023.

On the back of this performance, IMF has indicated that it would review the country’s 2023 end year growth rate of 1.5 per cent upwards.

Fitch Solutions, a global rating firm and the Institute of Statistical, Social and Economic Research (ISSER), have projected a three per cent growth for the country, signalling signs of recovery.

Nonetheless, the country is required to sign a pact with external creditors on debt treatment for a second tranche of US$600m from the IMF as part of the US$3bn loan, which would be catalytic in firming economic gains made thus far.

The government has asked external bondholders to accept up to 40 per cent haircut on principal, a coupon rate of not more than five per cent, and a maturity of about 20 years, which has been a challenge in securing a pact for external debt treatment.

Mr Kojo Oppong Nkrumah, Information Minister, at the 2023 IMF/World Bank Group annual meetings in Marrakech, Morocco said Ghana was exchanging and validating data and the possible contours of the external debt treatment.

“Once we’re done with some of the groups, for example, the Official Creditors Committee, we’ll be able to proceed with an MoU, and the details will proceed,” he said.

“Action is needed from the creditors’ side; Ghana has done its fair share, and it’s for creditors to take the next steps, and we’re not going to ask the government to do more adjustment because creditors haven’t asked either,” said, Mr Abebe Aemro Selassie, Director, African Department, IMF.

GNA