Policy Tink Tank, IMANI Center for Policy and Education (CPE), has suggested some programs the government can suspend temporarily to help in mitigating the economic impact of Covid 19.
The programs include NABCo which is costing the country GH¢840 million, the free senior high school policy (GH¢2.4 billion), the regional re-organisation programme (GH¢125 million) and the new voters register by the Electoral Commission which is expected to cost GH¢292 million.
Others include the suspension of some infrastructure projects, and the renegotiation of the interest and principal payments of some loans.
The center believes that rather than introducing fiscal measures that will damage the long term goals of the country, the suspension of these programs were a better option to create fiscal space.
These recommendations were contained in a policy brief published by two fellows of the think tank, Mr Patrick Stephenson; Head of Research and Dr Theophilus Acheampong; Senior Fellow.
Fiscal measures submitted to Parliament
Last week the Minister of Finance, Mr Ken Ofori-Atta submitted some fiscal measures to parliament which is meant to mitigate the fiscal risks of the Covid 19 outbreak.
The measures include a reduction of expenditure on CAPEX and goods and services by GH¢1.25 billion, amendment of the Petroleum Revenue Management Act (PRMA) 2011 Act 815, to allow a withdrawal from the Ghana Heritage Fund (for urgent expenditures concerning the coronavirus pandemic); and an amendment of the Bank of Ghana Act to allow for government borrowing from BoG beyond the stipulated threshold in the Act in the event of tight domestic financing market conditions.
According to IMANI, these these three fiscal measures will affect the next generation if government does not stick to the short-term goals of mitigating the coronavirus.
It believes that the implementation of these three fiscal measures submitted to parliament by the Finance Minister would temper the proficiency of the long-term goals.
Defense for argument
It argued that “reforms which should shape the fiscal behaviour of governments through time in a predictable and efficient manner, get thrown out of the window at the 'slightest' risk and opportunity.”
According to Mr Stephenson and Dr Acheampong, the fact that the government is focusing on achieving short-term goals i.e mitigating the spread of coronavirus, the probability of Ghana damaging her long-term goals and undermining broad economic recovery strategies over the medium term is high and will be detrimental to the future economy.
However, they commended the government for some achievements marked due to legislative reforms.
“The NPP administration has made several macro-economic gains as a result of some of these legislative reforms which have collectively earned favourable country assessment within the international capital markets, and have at least guaranteed some level of predictable behaviour on the fiscal strategy of government – for example, competitive yields on Ghana's recent Eurobond sales.”
They went on to recommend that it is important the incumbent government puts practicable strategies in place to ensure smooth sail for the next governments.
“We recommend that the government should stick to its prudent strategy deployed in the last three years, to guarantee and ensure some relative predictability of policy, while providing a plank on which subsequent governments can build and consolidate our macro-fiscal behaviour. This is extremely important!”