TIG Post

Tag: Institute of Statistical

  • ISSER warns of desertification, calls for urgent intervention

    ISSER warns of desertification, calls for urgent intervention

    A recent study by the Institute of Statistical, Social and Economic Research (ISSER) has revealed frightening figures concerning the environment and natural resources of the nation as Ghana observes Green Ghana Day.

    The report highlights that approximately 35% of Ghana’s land is under imminent threat of desertification, necessitating immediate action to combat this growing crisis.

    The environment has long been a crucial component of Ghana’s socio-economic development, providing natural resources, sustenance, and employment opportunities. However, improper management of these resources has resulted in detrimental consequences that undermine the country’s social and economic progress.

    Using the Environmental Systems Framework, the ISSER report shed light on the continuous degradation of various environmental elements, including the atmosphere, freshwater, biodiversity, and land, between 2016 and 2022.

    These findings exposed the pressing need for comprehensive policies and regulations to address the escalating environmental challenges in Ghana.

    One of the concerning trends highlighted in the report was the rising temperatures experienced in the country over the years, with 2020 registering the highest increase, and closely followed by 2016.

    Ghana’s greenhouse gas emissions have also seen a significant uptick, standing at 58.56 MtCO2e in 2019, representing a 16% surge compared to the baseline levels in 2016.

    The issue of freshwater pollution has been exacerbated in recent years, primarily due to the prevalence of illegal small-scale mining, known as “galamsey.” This activity has resulted in severe contamination of water bodies, posing a significant threat to aquatic ecosystems and human health.

    The report further highlights the critical state of Ghana’s wildlife, with several species, including the blue whale, common chimpanzee, Egyptian vulture, African grey parrot, and Baker’s wood mouse, being classified as endangered. This alarming trend underscores the urgent need for concrete efforts to protect Ghana’s unique biodiversity.

    To address these environmental challenges, ISSER recommends a series of strategic measures and actions. These include expediting the implementation of the long-term National Development Plan of Ghana (2018-2057), empowering environmental sustainability enforcement bodies and institutions, promoting climate-smart agricultural practices, accelerating the implementation of the community mining module, and increasing public awareness about the importance of environmental resilience.

    In light of the upcoming Green Ghana Day, ISSER also emphasises the need for meticulous monitoring of the growth of trees under the ‘Green Ghana Agenda.’ It is crucial for the government to track progress accurately to ensure the success of this initiative and combat deforestation effectively.

  • Reduce government size to support debt-reduction efforts – ISSER

    In light of Ghana’s economic difficulties, the Institute of Statistical, Social, and Economic Research (ISSER) at the University of Ghana has urged for a reduction in the size of government.

    The Director of ISSER, Professor Peter Quartey, said on Tuesday during a forum at the institute on the 2023 budget review that fiscal consolidation—raising revenue and lowering spending, including shrinking the size of government—was necessary to build a resilient economy and restore macroeconomic stability.

    To accomplish the intended result, he contends that a reduction in the size of government should be combined with an increase in the VAT and cost-cutting measures in the public sector.

    On the debt programme, Prof. Quartey said that a national consensus among key stakeholders, such as Parliament, investors, civil society organisations (CSOs), and the citizenry, would help accelerate the country’s recovery efforts and avoid the mistakes that led the economy into its current challenges.

    “The government should deepen consultations, while the opposition engage meaningfully to avoid the mistakes of the past,” Prof. Quartey said.

    Government has launched the Debt Exchange Program announced in the 2023 budget.

    This comes on the heels of the conclusion of the broad contours of the debt sustainability analysis as part of the debt restructuring deal with the International Monetary Fund(IMF).

    The debt operation is part of a comprehensive set of measures for reducing the present value of public debt to Gross Domestic Product (GDP) ratio to, at least, 55 percent in the medium term by offering an effective cap on interest payments on public debt.

    Finance Minister Ken Ofori-Atta on Monday announced domestic bondholders, with the exception of Treasury bill holders, will be affected by the debt exchange program.

    Per the arrangement, bondholders will get 0% interest in 2023, 5% in 2024 and 10% onwards. The bonds will also be redeemed in 3 installments within 10 years.

  • Spend any savings on interest into constructive projects – ISSER

    According to Professor Peter Quartey, director of the Institute of Statistical, Social and Economic Research (ISSER), since the proposed debt exchange scheme will enable the government to save some of the budgeted interest payments for 2023, these money must be transferred to constructive programs.

    Under its Ghana Domestic Debt Exchange Programme, the government has asked domestic debt holders to voluntarily swap about GH137 billion of domestic notes and bonds of the Republic for new instruments with a different term arrangement.

    When this is finished, the government will have some breathing room in its budget as it expects to lower domestic interest payments, which are anticipated to be GH31.29 billion in 2023 out of a total of GH52.55 billion.

    At a post-2023 budget meeting, Professor Quartey said: “With this, our debts are going to come down once they make those savings. Therefore, the interest payments can be channelled into some of the programmes that have been outlined in the budget.

    “For instance, you’ve seen some funds earmarked toward agriculture; but when you look at the 2023 budget, we’re going to spend so much at about GH¢18billion on the education sector – less than agriculture and industry. So going by what I see, quite a good proportion will go into education; but also some will go into other critical sectors.”

    He further noted that economic growth will be impacted by the lack of capital investment among other factors.

    “Growth is not going to be as high as we’ve been witnessing, because it takes investment to grow. In the past we have relied on external sources and foreign capital to invest in infrastructure for capital expenditure. Unfortunately, that avenue is virtually closed to us for a while; and therefore we are only going to spend 1.8 percent of our GDP on investments. So, growth is going to stifle,” he said.

    “But having said that, if we are able to sign onto an IMF programme and we get on track, I believe there’ll be other donors who come on board as well as some bilateral partners and we can revise some of these figures in investment and manufacturing,” he stated.

    Focus on agriculture

    The Director called for a special focus on agriculture as the sector remained resilient during major shocks like COVID-19.

    “Although these numbers are not very impressive when compared with the other sectors, we note here that the sector was very resilient during major shocks like COVID-19. Moving forward, attention should be paid to processing and food storage infrastructure to ensure food security,” he said.

    Primarily, the Planting for Food and Jobs (PFJ) initiative – which started in 2017 to provide subsidised inputs to farmers – continues to be a conduit for growing the agricultural sector. In 2023, the agricultural sector is projected to grow by 2.6 percent as against 0.7 percent in 2022.

  • Restructuring Ghana’s economy requires political will

    The government must exert political will, according to Professor Stefan Dercon, Professor of Development Economics at the Centre for the Study of African Economies (CSAE).

    That, according to him, would necessitate immediate fiscally responsible actions like reducing government spending.

    Long-term prospects are promising, but getting there is difficult and politically costly for those in positions of power.
    We simply need to figure out a method to get through it.
    Ignoring it will unquestionably be the largest error you can make since it will prevent longer-term growth, he continued.

    The Professor gave the advice on Monday during a lecture on the topic: “Gambling on Development”.

    It was organised by the Institute of Statistical, Social and Economic Research (ISSER) of the University of Ghana, Legon and CSAE.

    Prof Dercon said the implementation of fiscal restraints would cause political issues because certain key sectors of the economy, such as infrastructure, among others, would be affected.

    “Such stabilisation efforts will be tough but it’s now that these seeds have to be sown for a future better growth. It would involve cautious political behaviour with government budgets to make sure Ghana goes back to the period of remarkable growth since the 1990’s.”

    “The success of a country is measured by its ability to correct errors in its economic policy. This won’t be easy. It would involve careful policy making, great communication by the leadership to the population. I’m optimistic that Ghana can make it happen,” he said.

    However, he said, in doing so, they should be mindful not to fundamentally undermine the impact of such restraints on the “poorest” in society or “indeed what could be the engines of growth”.

    He commended Ghana’s “early” move to the International Monetary Fund, adding that, the Fund acted as a useful external form of “correction” in cases when internal accountability could not deliver.

  • FLASHBACK: ‘E-Levy will affect projected revenue’ – Economics lecturers

    Prior to being put into effect, the electronic transaction tax caused a great deal of controversy.

    The tax plan will undermine the nation’s achievements from digital inclusion, according to some analysts who expressed their displeasure of the fee.

    Economists Prof Charles Godfred Ackah and Dr Kwadwo Opoku have opined that the government’s intention to use the electronic transaction levy (e-levy) to boost Ghana’s revenue in 2022 may not be achievable. Instead, they believe this will erode the digital inclusion agenda since people may instead resort to other substitutes.

    “The opportunity to avoid using MoMo for transaction settlement will also affect the projected revenues for 2022. Though FTTs appear to offer an easy fiscal handle, their revenues have a tendency to erode over time as taxpayers learn to avoid them by using cash payments and other payment methods. A back-of-envelope calculation suggests that the E-Levy will likely generate far less revenue than the projected.”

    According to them, MTN MoMo recorded a total volume of transactions of 2.6 billion, amounting to GH₵549 billion (the total value of Mobile money transactions for all service providers was GH₵564 billion) in 2020.

    “The total revenue generated by the MTN end-to-end charges of 2 percent amounted to GH₵1.3 billion (equivalent to 0.23 percent of the total value of transactions or GH₵0.5 per transaction).”

    “Supposing the value of MoMo transactions experience an annual growth of 100 percent to reach GH₵2.3 trillion in 2022, using the MTN average effective charge of 0.23 percent in 2020, the 1.75 percent E-Levy on MoMo transactions will generate revenues of GH₵4.5 billion (GH₵2.4 billion less than the projected GH₵6.9 billion in the 2022 Budget Statement).”

    Associate Professor of Economics at the Institute of Statistical, Social and Economic Research (ISSER), Professor Charles Godfred Ackah and Economist and Research Fellow at the Centre for Social Policy Studies (CSPS), Dr Kwadwo Opoku made these assertions in an opinion article.

    Per this analysis, they have projected some behavioural changes among service users, adding that “the projected revenue in the budget is over-optimistic.”

    They cite the case of Uganda, where the country experienced a marginal reduction in mobile money transactions after the imposition of a 1% tax.

    “In Uganda, for example, the imposition of one percent mobile money transaction (cash-in, transfer and cash-out) tax led to a drastic reduction in mobile money transactions—the value of mobile money transactions fell by 24 percent. The IMF had warned that it was the rural poor who were likely to be hit disproportionally hard by the transaction taxes. In fact, transaction values of P2P transfers fell by more than 50 percent.”

  • Today in History: Reduce public debt stock to sustainable levels by 2024 – ISSER urges government

    In order to reach sustainable levels by 2024, the Institute of Statistical, Social, and Economic Research (ISSER) urged the government to cut back on the national debt in 2021.

    Crude oil prices have risen above $70 per barrel, according to ISSER, with major consequences for transportation costs, production costs, prices of goods and services, and livelihoods.

    It recommended the government to take action to lessen the consequences on the economy, particularly on the impoverished people’s means of subsistence.

    The Institute of Statistical, Social and Economic Research (ISSER) is charging the government to reduce the public debt stock to sustainable levels by 2024 through a 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 percent 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 percent 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 the 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 the 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 the government to take steps to minimize the effects on the economy especially the 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 an oil Gross Domestic Product of 3.9 percent and non-oil GDP growth of 5.2 percent recorded in the second quarter of 2021.

    Although the country is among the fastest-growing economies, ISSER said higher growth in labor-intensive sectors such as agriculture and manufacturing with high-value addition is very critical in order to avoid the jobless growth syndrome.

  • I expect a cut in government appointees – Prof. Peter Quartey on 2023 budget

    The Director of the Institute of Statistical, Social and Economic Research (ISSER), Prof. Peter Quartey has suggested some fiscal measures to be included in the 2023 budget to help shore up revenue for the government.

    According to the Economist, the country’s fiscal space is currently in a bad state, thus would need innovative revenue measures to stabilize the economy.

    Speaking on Joy Business’ Pre-Budget Forum on Monday, Prof. Peter Quartey urged the government to reduce its appointees and use the savings to fund the 2023 budget.

    “Government said it is going to pursue an austere budget…I expect a step further. I think there should be a reduction in the number of government appointees and how much is spent on them and many other areas, it would go a long way to help streamline our fiscal position,” he told Winston Amoah.

    With regard to revenue generation, Prof. Peter Quartey commended the Ghana Revenue Authority for its recent initiative of the E-VAT Invoicing system.

    The Authority had said the E-VAT Invoicing system will help it monitor the issuance of VAT by companies and will also deal with the inaccuracies associated with the filing of VAT by companies.

    The ISSER Director believes that the 2023 budget should introduce more of such policies to maximize the country’s revenue generation.

    “We want to see more of that and I think it is a step in the right direction. We need to enforce that and raise our revenue upstream and so these are some of the innovative measures that we want to see that we aggressively pursue our revenue mobilisation without destroying the base,” he added.

    Meanwhile, the 2023 Budget may not be read on November 15 as scheduled.

    Majority Leader Osei Kyei-Mensah-Bonsu revealed that the negotiations with the International Monetary Fund (IMF) may delay the presentation.

    “Nothing should be done which will eventually become wishy-washy. They want to have the best to be able to uplift us from where we are as a country. And that being the case, if we want to do a thorough job, I think there will be too much pressure if it has to be done on the 15th,” the MP told journalists last week.

     

  • Economist optimistic IMF bailout program will boost investor confidence

    Prof. Peter Quartey, the director of the Institute of Statistical, Social, and Economic Research at the University of Ghana, is hopeful that investor confidence in Ghana would increase as a result of the International Monetary Fund’s (IMF) desire to salvage the country’s economy.

    The International Monetary Fund (IMF) is conducting a thorough debt sustainability review with the Bank of Ghana and Ministry of Finance officials as part of a US$3 billion support program, the Ministry of Finance announced on Monday.

    According to the Ministry’s statement, the program aims to create a macro-fiscal path supported by significant structural changes and social protection that provides debt sustainability and macroeconomic stability.

    The IMF team is in Ghana until October 7 to continue discussions with the government on policies and reforms that could be supported by a lending arrangement.

    This round of engagements coincides with international ratings agency Fitch downgrading the country’s creditworthiness to further junk status, in addition to the already existing problem of inflation and cedi depreciation.

    This has heightened calls for the government to among other things, restructure its local currency debt stock as required by the IMF.

    News reports indicate that major local investors, including local banks and pension funds, are preparing to engage in discussion on the debt reorganization.

    Reacting to this development, the Director of the Institute of Statistical, Social and Economic Research (ISSER) at the University of Ghana, Prof. Peter Quartey, is hopeful these steps being taken by the IMF to save Ghana’s dying economy will spice up investor confidence in the country.

    “The IMF has its own processes that it goes through to ensure that it comes in to rescue the situation. Some might take six to twelve months. We heard the IMF director say hopefully by December, all things being equal, we’d have the program so we’re hoping for that,” he noted.

    “Although given the situation that we find ourselves, we need an injection of foreign currency into the country. But the fact that the IMF is engaging Ghana and there is progress, I believe it’s gradually bringing in some confidence into the economy and I believe some investors, despite the Fitch downgrade, will still be looking at Ghana favourably in the coming months.”