Dr. Said Boakye
The Institute For Fiscal Studies (IFS) says the policy intentions of the government are less likely to be achieved if budgets delivered are not based on realistic projections of revenue.
Speaking at a press conference ahead of the budget presentation by the government on March 11, 2025, Executive Director of IFS, Dr. Said Boakye, stated that the Ministry of Finance could improve the revenue target that supports budget credibility by adopting a conservative approach to revenue projection.
“An essential feature of a credible budget is realistic revenue targets, since revenue is the cornerstone of any budget. The government of Ghana has a poor track record in this area. For instance, actual total revenue and grants was below the budget target every year from 2013 to 2023, with an average deviation of -7.4%,” he added.
He also asked the government to recognise that revenue projections are not about what the government wants to collect but what it can collect, given the economic outlook and the government’s policy efforts
He further urged the Ministry of Finance to review macro-fiscal forecasting framework and processes to address possible bias in the projection of revenue as well as improving estimation of the revenue impact of new tax policies by strengthening the underlying data and analyses.
Dr. Boakye further cited 2022, as an example of the year actual revenue from the e-levy turned out to be only 8.5% of the projected amount.
He advised the government not to return to the international bond market at the least opportunity but rather pursue steps to ensure lower fiscal deficits that ultimately results in low borrowing given the debt crises the country has suffered for decades.
He asked the government to ensure macroeconomic stability through strong fiscal consolidation and reduced monetary growth, boost economic growth to reduce unemployment through expenditure prioritisation and strategic intervention in agriculture.
Others are resetting Ghana’s external sector by changing the control structure of the country’s two major merchandize exports and fighting corruption with seriousness and effectiveness.
By Ebenezer K. Amponsah