The Institute for Fiscal Studies (IFS), says government’s programmes and policies such as the Free Senior High School Programme, Planting for Food and Jobs, Nation Builders Corps (NABCO), National Entrepreneurial Innovation Programme (NEIP) etc, aimed at addressing youth unemployment and the need for a broad base approach to economic growth are practically unsustainable unless government results to huge amounts of borrowing to keep the programmes and interventions afloat.
The Institute is therefore recommending a pruning of the numerous social intervention programmes government is currently implementing and a drastic reduction of borrowing to the barest minimum to avoid a total breakdown of the country.
A senior fellow at the Institute of Fiscal Studies (IFS), Dr. Said Boakye, made the assertions when he addressed a press conference on IFS’ expectations of Ghana’s 2019 national budget, which is due to be read before Parliament by the Finance and Economic Planning Minister, Ken Ofori Atta on the 15th of November, 2018.
“Given the weak fiscal state in which the country finds itself in terms of the lack of free fiscal space to maneuver, which is caused by the weak revenue generating capacity of the state and the excessive from scale rigidity in the budget, the government should consider pruning down the numerous programmes and initiatives it is pursuing,” Dr. Said Boakye said .
Additionally, the IFS official fellow noted that, “In trying to fund the programmes and initiatives to ensure broad-based economic growth, the government ought to limit the amount of money it borrows to the barest minimum, in order not to cause fiscal overruns and generate macroeconomic instability, since macroeconomic instability is a powerful depressor of real GDP growth in Ghana.”
The IFS further recommended that to be able to “genuinely transform the economy of Ghana through industrialization so as to achieve sustainable growth, generate high quality jobs and significantly reduce unemployment, the government, through the National Development Planning Commission, (NDPC), should prepare an implementable long-term national industrialization strategy.”
On government’s plan to leverage the country’s natural resources to support infrastructure development, the IFS said though it is a laudable idea, “for the purpose of effective management of the risk associated with the projects, and for the avoidance of waste, the arrangement should be brought under the umbrella of the Ghana Infrastructure Investment Fund (GIIF), which has been mandated to raise funds for such projects.”
The Institute for Fiscal Studies (IFS) was established in Ghana in March 2013 as a politically independent non-profit think-tank devoted to the provision of economic policy advice, advocacy and world-class training based on practical experience and insights developed through quality research and analysis. The Institute seeks to conduct high-quality independent research in macroeconomic and fiscal policy management to promote better understanding of the Ghanaian economy in general and government finances in particular for the benefit of government, the business community, and civil society. It also provides fora for public discussions and reflections on the country’s macroeconomic policy and public finance. In addition, the Institute provides advisory services on macroeconomic and fiscal policy designs and management.
The vision of the IFS is to become an indispensable pillar in the economic and social transformation of Ghana. The IFS as an Institute also seeks to contribute to Ghana’s fiscal management and macroeconomic transformation. This mission of IFS rests on two basic premises. First, that growth and development occur where there is sustained sound management of the economy. Second, that such management is more likely to happen where there is active and well informed group of locally- based professional economists to conduct relevant policy research to influence policy-making.