The successful implementation of the initiatives in the 2013 budget will strengthen the credibility of Government and increase public, investor and donor confidence in the economy, PricewaterhouseCoopers (PwC) has said.
It said sustaining confidence in the future of the Ghanaian Economy is a daunting task given the current position.
It said while the 2013 budget cautiously attempts to tackle this challenge, there was the larger question if the government has the political will and fiscal discipline to deliver on the challenge.
“The challenge remains whether Government will be able to maintain the positive trend in inflation, relatively stable currency and a much lower interest rate regime,” PwC said in a statement.
Government is projecting a GDP growth of eight per cent (including oil) in 2013. Inflation is projected at an average of 8.9 per cent for the year, with a period end figure of nine per cent compared to 8.8 per cent in 2012.
Inflation has remained single digit over the last two years. However, given the experience of 2012, a lot more fiscal discipline on the part of Government will be required to make these targets attainable.
PwC, therefore, urges Government to prioritise the planned infrastructure development on key and critical projects including the completion of various ongoing projects.
Priority must be placed on water availability and expansion to other communities within Ghana; plans for efficient energy consumption and systems to support production; a review of the current state of the agriculture landscape and value chain from planting to marketing and introduction of effective programmes to minimise wastage and production losses.
There is also the need to address current difficulties in education, which directly impact on human capital stock and productivity.
Speaking at a post budget forum, Mr Felix Addo, Country Senior Partner, said a reasonable inflation is necessary for growth, however, government must ensure that it was contained and managed properly.
He also asked government to monitor tax holidays enjoyed by some companies and to ensure that they are not abused to deny government the necessary revenue for development.
Mr Tony Oteng-Gyasi, former President of the Association of Ghana Industries, said government must look at the structure of incentives that it provided to enable it spread the benefits to the people.
He said there must be new thinking on how to deal with the deficit and raising taxes to fund development activities.
Mr Seth Terkper, Minister of Finance, said government was looking at the review of all tax laws and was in discussion with Parliament on the issue.
He said a key consideration was to separate the Excise from the Value Added Tax and sufficient consultation would be done to enable government effect the necessary changes.