The government has set an ambitious agenda to restore macroeconomic stability and accelerate economic transformation under the Post-COVID-19 Programme for Economic Growth (PC-PEG).
The Minister of Finance, Ken Ofori-Atta, who disclosed this in Accra yesterday, when he presented the 2023 Budget and Economic Policy to Parliament, said the seven-point agenda for economic transformation was hinged on aggressive domestic revenue mobilisation, streamline and rationalise expenditures, boost local productive capacity, promote and diversify exports, protect the poor and vulnerable, expand digital and climate-responsive physical infrastructure and implement structural and public sector reforms.
“To achieve these, there are three critical imperatives: successfully negotiating a strong International Monetary Fund (IMF) programme, coordinating an equitable debt operation programme; and attracting significant green investments. This will enable us to generate substantial revenue, create needed fiscal space for the provision of essential public services and facilitate the implementation of the PC-PEG programme to revitalise and transform the economy,” the Minister of Finance said.
He explained that in 2023 government would aggressively pursue domestic revenue mobilisation and the Value Added Tax (VAT) rate of 12.5 per cent had been increased by 2.5 percent.
He said the increase of the VAT rate would help to generate GH¢2.7 billion in the 2023 fiscal year.
In addition, Mr Ofori-Atta said government would fast-track the implementation of the Unified Property Rate Platform programme in 2023, review the E-Levy Act rate from 1.5 per cent to one per cent of the transaction value as well as the removal of the daily threshold.
“To boost local productive capacity, we will among others cut the imports of public sector institutions that rely on imports either for inputs or consumption by 50 per cent and will work with the Ghana Audit Service and the Internal Audit Agency to ensure compliance, support the aggressive production of strategic substitutes,” the Minister of Finance said.
He said the government would support large-scale agriculture and agribusinesses interventions through the Development Bank Ghana and ADB Bank, introduce policies for the protection and incubation of newly formed domestic industries to allow them to make the goods produced here competitive for local consumption and also for exports.
“Government will promote exports, expand productive capacity in the real sector of the economy and actively encourage the consumption of locally produced rice, poultry, vegetable oil and fruit juices, and ceramic tiles and pursue efficiency in government expenditures,” MrOfori-Atta said.
He said the objective of government was to fundamentally reposition the economy with the PC-PEG to be supported by the IMF, World Bank and other friendly sovereigns and the private sector both domestic and international.
Mr Ofori-Atta said government’s efforts to attain macroeconomic stability would require broad-based contributions and sacrifices, stressing “here would be costs to the fiscal adjustments we intend to make in the coming years to sustain our stability, recovery and eventual transformation.”
“The challenges we face are daunting but we must not lose sight of the greatest strength of being Ghanaian: resilience, entrepreneurial zeal, faith, courage, solidarity and hope. I, therefore, ask all of us to play a constructive role in getting our nation fully back on track. Ours is a country with real prospects and the challenges notwithstanding, Ghana will rise again,” Mr Ofori-Atta, said.
He said the country had already been achieved, especially over the course of the Fourth Republic and the policy, as outlined in this budget to reset the economy, if supported would ensure that the country had not wasted the current global crisis, but used it to make the economy stronger.
The Finance Minister pledged that government would continue to purse fiscal discipline, saying that “Every pesewa that we ask the Ghanaian people and businesses operating in Ghana to contribute will be spent well.”