World Bank urges gov’t to consolidate econ. gains

The Country Director of the World Bank, Mr. Henry Kerli, has stressed the need for the country to do more in the implementation of policies that will consolidate economic gains.

According to him, Ghana could enjoy significant economic and social benefits by designing its fiscal policy and taxation law to check social spending, subsidies and taxes.

Speaking at a forum organised by the World Bank in Accra yesterday, to assess the country’s performance on poverty alleviation and implementation of fiscal policy, Mr. Kerli commended the country for reducing the rate of poverty over the past two decades, but urged the government to do more to ensure financial equity between the poor and the rich.

He said poverty had been reduced by more than half, from more than 50 per cent of the population in 1991 to 21 per cent in 2012, but the earnings of the lower, middle and upper class were vast low.

“Despite the major success, the pathway to ending poverty faces challenges, particularly due to growing inequality and polarisation in household income and the large spatial disparities in the welfare of citizens,” he said.

Mr. Kerli also identified challenges confronting the macro-economic environment and therefore called for a better understanding of the implication of government spending and tax policy on the economy.

He noted that the onus was on the government to ensure an enhanced productivity, transparency and participation of key stakeholders through strict implementation of policies meant to tackle social spending, subsidies and taxes.

Mr Kerli urged government to ensure progressive revenue collection and facilitate fiscal prudence to help reduce poverty through strategic changes in taxation.

According to him, policy making should be dynamic and complex enough to broaden systems for testing, implementing and monitoring government’s decision.

Underpinning such effort, he said, was the need for government to deliberately design its spending and taxes to support development objectives, particularly maximising the potential to redistribute to the poorest.

A senior economics lecturer of the University of Ghana, Legon, Mr. Eric Osei-Assibey, asked government to remove fuel and electricity subsidies, to compel the public to pay realistic prices.

He observed that government was faced with a herculean task of paying subsidies on fuel and electricity, which he said was compounding the economic and fiscal challenges in the country.

By Charles Amankwa & Benedicta Folley   

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