The Institute of Statistical, Social and Economic Research (ISSER) is charging government to reduce the public debt stock to sustainable levels by 2024 through prudent debt management strategy.
In its State of the Ghanaian Economy Report and Review of 2021 3rd Quarter Economic Performance, the research and economic think tank said debt service payments accounted for 62.1 percent of domestic revenue in 2020 (51.9 per cent in 2019) and therefore require drastic action to bring the debt levels down.
In the second quarter of 2021, Interest payments accounted for about 45 per cent of total tax revenue. This ISSER said limits the fiscal space, thereby affecting capital expenditure/Investments needed to stimulate further growth.
Furthermore, it also urged government to increase support to businesses affected by the COVID-19 pandemic to help accelerate the recovery process.
It pointed out that the negative impact of the pandemic on businesses despite the various intervention programmes instituted by government, indicates that government must do more to aid recovery in the economy.
On other recommendations, ISSER, said “crude oil prices have surged and above $70 per barrel with serious implications on transport fares, cost of production, prices of goods and services and livelihoods”. It therefore urged government to take steps to minimise the effects on the economy especially livelihood of the poor.”
ISSER recommended that since the COVID-19 Health Levy and the Financial Sector clean-up Levy seem to be performing better than the others, a critical assessment of these taxes is needed to ascertain whether they are efficient means of raising revenue rather than a “nuisance” tax that stifles private businesses.
Ghana recorded appreciable growth rates since 2020 with oil Gross Domestic Product of 3.9 percent and non-oil GDP growth of 5.2 per cent recorded in second quarter of 2021.
Although the country is among the fastest growing economies, ISSER said higher growth in labour-intensive sectors such as agriculture and manufacturing with high value addition is very critical in order to avoid the jobless growth syndrome.