The Country Senior Manager of PwC, Mr Vish Ashiagbor, has described the 2018 budget as a good one that provides consistency and strong credibility to the economy.
He said the budget was a continuation of the key initiatives that were announced in 2017 which indicated a continuation of the government’s efforts.
“The budget is good because there is consistency, which gives clear policy direction and the right signals that the policies will be moved along progressively and continuously,” he noted.
Speaking in an interview with the GRAPHIC BUSINESS, Mr Ashiagbor said, “there were no surprises there as there were no radical changes.”
“The budget was aimed at continuing the existing policy frameworks that were announced in 2017,” he added.
He said one thing that was also noticeable was the fact that the government was able to meet and in some cases, exceeded the macro-economic targets that were set in 2017, something he said provided strong budget credibility.
“The targets that were set in the 2017 budget were met and if you look at what is being projected for 2018, 2019, and 2020, it is within the same objective of macro-economic stability and trying to diversify the economy into agric and industry for job creation and sustainable growth,” he said.
Touching on the 2018 targets, he said, “the targets are fine and I believe they can be met.”
“Overall, the targets are fine but there is a bit of work to be done to ensure that they are met,” he mentioned.
The country manager also urged the government to focus on domestic revenue mobilisation in order to achieve its targets easily.
He said the measures that had been put in place were adequate to improve domestic revenue mobilisation but warned that the measures would take time to bear fruits.
“The focus has to be on pushing up the revenues and this is easier said than done. We must focus on revenue collection if we can meet the targets,” he noted.
“The measures that have been outlined to improve domestic revenues will take time to have full effect, “he added.
He advised the government to look at the informal sector as it had lots of opportunities to improve revenue.
“There is a huge informal sector. There are a lot of small businesses and individuals who are engaged in commercial activities but do not pay taxes and I think even if they were to pay a little bit, it will add up,” he explained.
“There are a lot of opportunities in the informal sector to increase revenues. There are also loopholes that can be plagued to increase revenues,” he added.
Mr Ashiagbor pointed out that the 2017 overall fiscal deficit was met because expenditure was also cut to compensate for the revenue shortfall.
He said he did not see anything wrong with it, however, because even as “individuals, if your income reduces, you cut your expenditure to compensate for it.”
“So there is nothing wrong with that except that we have to be careful about which expenditures and sectors are being cut,” he stated.
He said, “growth comes from a number of sources and government’s spending is just one source of growth potential but private business activity is also another source.”
“It is true that traditionally, in our economy, government has been the main generator of economic growth but what we are seeing now is a renewed effort to create an environment that allows private sector to do its thing and drive business to achieve growth as well.”
“So even as government cuts expenditure, which means it’s not going to engage in certain activities, private sector can take that up,” he pointed out.
He said it was a matter of providing a conducive business and regulatory environment that would allow private businesses to invest in the economy.
“There are, however, certain areas where government has to be the one to drive the investments like the social sector because it is not a profit-generating sector and therefore unlikely to see the private sector investing there,” he noted.
“But overall, just the fact that expenditure has been cut does not mean that the economy will suffer. It’s a question of where you are cutting. If the cuts are in areas where other people can step in, the impact will be minimised,” he added—GB