Graphic Business News

‘Evaluate governance benefit of new ministries’

By: Ama Amanwkah Baafi
Dr John Gatsi
Dr John Gatsi

An economist, Dr John Gartchie Gatsi, has suggested an objective appraisal of the additional ministries and sectors that were created by the government to assess whether they have delivered any benefits to governance in the country.

He said those that would be found not to be providing any added value to governance must be scrapped as a way of cutting down expenditure.

“We need to know, for example, what the Ministries of Planning and Monitoring and Evaluation have contributed to governance. We need to know what the Ministry of Business Development has done because we see the Vice-President doing more of the things that we can capture under that ministry rather than the ministry itself,” he said.

In an interview with the Graphic Business on his expectation of the government’s expenditure plan in the budget statement to be presented to Parliament for the 2018 fiscal year, he said it was important to do a one-year evaluation of their potential to co

Dr Gatsi, who is also the Head of the Finance Department at the University of Cape Coast, said the 2018 Budget should focus on revenue generation and at the same time deal with the expenditure problems of the country.

He said because of the orientation of the government, the expenditure plan needed to be looked at carefully, or else that would by itself derail proper functioning of some of the key sectors of our institutions. 

He noted that attempts were made in 2017 to limit the use of Internally Generated Funds (IGF) by some state institutions, and that had affected their operation and contribution to the delivery of governance, especially to the private sector and to citizens.

“So, while it is important to deal with expenditure issues, there is the need to cut down expenditure in areas that are not productive, but you don’t attempt to cut down on expenditure in productive areas of the economy,” he said.

 He cautioned that the cut-down on expenditure should not overly affect payment of arrears in the productive sector of the economy, such as businesses that had worked for the country and needed those monies to reinvest in their activities.

“In dealing with expenditure, it is important for the government to come out clear on how it is going to repackage ongoing programmes because we have one year of not attending to some projects that the government committed huge sums of money to,” he said.

He added that the government should come out with a plan as to the pipeline of projects that would be captured for execution.

Revenue leakages

On tackling revenue leakages in the public sector, Dr Gatsi said it was a project that needed to be continued, and one way of doing that was to enhance integration of various platforms in managing  sensitive areas, especially within the revenue collection sector.

“They have been talking about the recent launch of the digital addressing system, the Ghana Post GPS, but as to how that will practically resolve the problem we are facing in human interface, the problem we are facing in the registration of people onto the tax system, as to how we are going to capture the economic activities of the country, those things ought to be enhanced,” he said.

Tax cut

It is unclear if taxes will be removed or added, but Dr Gatsi said, “The tax cuts were supposed to be an incentive, but the areas that we see tax cuts have not actually provided any value-added contribution to the economy this financial year.

He said the reduction of taxes should not be for political gain but should be aligned effectively to proper public financial management.

???“If you have a vibrant economy and you decide to reduce corporate income tax because you know that they will enhance productivity and they generate more revenue, when you reduce the percentage rate that can lead to increase in tax revenue but if the productive activities are so robust and you cut down on tax you will experience reduction in tax revenue again,”??? he said.

The government has said the 2018 Budget will focus primarily on agriculture and industrialisation, a move the economist lauded but called for very clear policies to guide that.

“We should be committed to the policies that are needed to drive the agricultural sector,” he said. — GB