Mid-Year Budget Review: Maintain fiscal discipline, avoid new taxes – Experts tell govt

Economists and business leaders have urged the government to maintain fiscal discipline and safeguard the country’s improving macroeconomic stability as it presents the 2026 Mid-Year Budget Review to Parliament today.

They also called on the government to use the current period of stability to accelerate structural transformation by investing in productive sectors, supporting local industries, avoiding new taxes and introducing targeted incentives to boost manufacturing, agriculture and exports.

An economist, Professor Festus Ebo Turkson, said although Ghana had made significant progress in restoring macroeconomic stability, the country must now focus on transforming the structure of the economy to build resilience against future external shocks.

He said Ghana could no longer depend on an extractive and import-driven economy and must instead promote value addition, industrialisation and self-sufficiency.

“We need to move away from an economy that depends heavily on imports and raw material exports to one that produces, processes and exports value-added products,” he said.

Prof. Turkson cited the recent refining of crude oil from the Jubilee field by the Tema Oil Refinery as an example of the structural reforms needed to reduce import dependence and ease pressure on the cedi.

He noted that low inflation, exchange rate stability, declining interest rates and improving investor confidence had created the right conditions for government to implement its industrial transformation agenda.

According to him, the government’s “Big Push” infrastructure programme should be directed at expanding the productive base of the economy through investments in roads, manufacturing, agro-processing and other labour-intensive sectors capable of creating sustainable jobs.

While supporting continued fiscal discipline, Prof. Turkson cautioned that productive public expenditure should not be sacrificed in the name of fiscal consolidation.

He urged government to prioritise investments that strengthen key sectors while avoiding a return to repeated International Monetary Fund (IMF) bailouts.

The Chief Executive Officer of Dalex Finance, Mr Joe Jackson, also called for prudence in public spending and strict enforcement of expenditure controls across ministries, departments and agencies.

He said businesses were more interested in a stable and predictable economic environment than expansionary fiscal policies.

“What businesses want is stability. Don’t surprise us. Pay us what you owe us, reduce the cost of capital and allow businesses to invest,” he stated.

Mr Jackson described Ghana’s recovery as encouraging but fragile and stressed that preserving the gains achieved so far must remain government’s foremost priority.

The Chief Executive Officer of the Association of Ghana Industries (AGI), Mr Seth Twum-Akwaboah, said businesses had experienced improved operating conditions in the first half of the year due to stronger macroeconomic indicators.

He noted that although geopolitical tensions in the Middle East had affected imports from the United Arab Emirates, government deserved credit for creating a more stable business environment through lower inflation and improved investor confidence.

Mr Twum-Akwaboah, however, appealed to government not to introduce new taxes in the Mid-Year Budget Review, but rather pursue reforms that would encourage manufacturing and value addition.

He cited the 20 per cent excise duty on locally produced fruit juices as a measure that was undermining the competitiveness of domestic manufacturers.

The President of the Ghana Union of Traders’ Associations (GUTA), Mr Clement Boateng, urged government to review the implementation of the new Value Added Tax (VAT) regime affecting the informal sector.

He proposed the reintroduction of a flat VAT rate of between five and six per cent for informal businesses, arguing that the current 20 per cent standard VAT rate was placing additional burdens on traders.

Mr Boateng also called on government to rationalise the numerous taxes and levies at the ports to reduce the cost of doing business and improve trade competitiveness.

He further urged the government to provide clearer support measures for businesses under the 24-hour economy policy, noting that traders were ready to transition from trading into manufacturing if the right incentives were made available.

The stakeholders emphasised that sustaining macroeconomic stability while deepening structural reforms would be critical to building a resilient, productive and competitive economy.

BY KINGSLEY ASARE

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