Pursue aggressive fiscal reforms in the 2023 mid-year budget – Terkper to government

A former Finance Minister, Seth Terkper has advised government to use the mid-year budget to aggressively pursue fiscal reforms that will encourage the private sector to invest in the country.

He warns that confidence among the business community is weaning due to high taxes.

Speaking to Joy Business, Mr. Terkper said government has an opportunity with the IMF deal to restore confidence in the mid-year budget among businesses.

He stated that government cannot continue to waste resources in the public sector.

“In 2020 and 2021, we have had all the significant flows into the economy and yet we couldn’t turn things around”, he argued.

He maintained that the IMF deal provides a perfect opportunity to pursue reforms that will stabilise the economy and ensure rapid recovery.

“I hope that this is an opportunity to do real reforms. The fund has started making adjustments. There are contingency plans for us. They have made an adjustments for us to bring us out of the woodworks”.

Mr. Terkper stated that the rapid adjustment and emergency measures taken by the Fund indicate a positive signal that must be used to get the economy back on track.

He added that there is the need to target the fiscal deficit and the debt stock to create some space for economic development.

He is of the view that the reforms that will be pursued by government will also help the country in subsequent reviews to fast track the release of the remaining funds under the programme.

“The success will depend on real performance. The Fund will be very alert. Don’t forget the IMF money because the money we are receiving is a loan”.

Government to reduce salary to public employees

As part of the reforms, government is targeting to reduce compensation of public sector employees by 0.5 percent of GDP.

According to the government, it is undertaking what it describes as wage moderation to achieve the target.

This was contained in the Ghana 3-year programme with the International Monetary Fund to achieve fiscal discipline and return the country back to economic growth.

The document also says wages of public sector workers will be calibrated to ensure a balance between burden sharing, productivity, and capacity to pay.