The Director, Institute of Statistical, Social and Economic Research (ISSER) at the University of Ghana, Professor Felix Ankomah Asante, has urged the government to implement measures to mobilise more domestic resources to sustain the country’s development.
He said although growth in the economy had significantly been influenced by oil resources, the government needed to find other convenient ways of collecting property rates and other taxes to ensure that the country’s development was sustained when oil prices began to fall.
Prof. Asante was speaking to the GRAPHIC BUSINESS at the launch of the International Monetary Fund's (IMF’s) 2018 Regional Economic Outlook for Sub-Saharan Africa, dubbed: 'Sub-Saharan Africa: Domestic Revenue Mobilisation and Private Investment,' at the University of Ghana on May 9.
He explained that if the government was unable to raise significant revenue from the public, some key economic indicators for development such as
'If we are not able to mobilise more domestic revenues, some of the key indicators for Ghana's development, like interest payment to GDP ratios, will go up,' he said.
Economic outlook report
The latest Regional Economic Outlook for Sub-Saharan Africa shows a modest uptick in growth largely driven by stronger global growth and higher commodity prices.
The economy of Sub-Saharan Africa, according to the report, will recover modestly from 2.8 per cent growth in 2017 to 3.5 per cent in 2018.
“The average growth rate in the region is projected to go up from 2.8 per cent in 2017 to 3.4 per cent in 2018, with growth accelerating in about two-thirds of the countries in the region,” the report said.
Over-dependence on external support
The report further indicated that the growth pickup in Sub-Saharan Africa had been driven largely by a more supportive external environment, including stronger global growth, higher commodity prices and improved market access.
It said while external imbalances had narrowed, the record on fiscal consolidation had been mixed and vulnerabilities were rising; about 40 per cent of low-income countries in the region were now assessed as being in debt distress or at a high risk of debt distress.
On current policies, the report noted that the average growth in the region was expected to plateau below four per cent — barely one per cent in per capita terms — over the medium term, highlighting the need for deliberate actions to boost growth potential.
It said turning the current recovery into sustained strong growth consistent with the achievement of the Sustainable Development Goals (SDGs) would require policies to reduce vulnerabilities and raise medium-term growth prospects.
The report said prudent fiscal policy was needed to rein in public debt, while monetary policy must be geared towards ensuring low inflation.
It added that countries should also strengthen revenue mobilisation and continue to advance structural reforms to reduce market distortions, shaping an environment that would foster private investment.
It pointed out that domestic revenue mobilisation was one of the most pressing policy challenges facing Sub-Saharan African countries.
According to the report, the low level of private investment was constraining the region’s efforts to improve social outcomes by holding back labour productivity and the resulting gains in real wages and households’ income. — GB