KPMG 2023 Post Budget Forum

On 29 November 2022, we held our 2023 Budget Forum themed “Restoring and Sustaining Macroeconomic Stability and Resilience through Inclusive Growth and Value Addition”.  The aim of the conference was to discuss the 2023 budget as well as share ideas and measures that can improve the execution of the proposed measures in the 2023 budget.  Invited guests included various policymakers and business leaders as well as members from academia, the donor community and the media.

Mr. Andy Akoto gave opening remarks where he touched on the KPMG Pre budget survey (a report developed after surveying 100 leading businesses in Ghana on their perceptions of government economic policies and ESG related issues and how they impact business operations) and highlighted that the policies and actions taken in trying times like these must inspire confidence in our people, give them hope and empower the change that we desire. He emphasised the urgency needed to execute restorative measures to nurture the economy onto a path of stability, resilience, and inclusive growth and implored government to execute economic recovery measures with discipline to ensure a successful turnaround.

This was followed by an in-depth panel discussion with Dr. Priscilla Twumasi Baffour (Senior Lecturer, Economics Dept, University of Ghana), Dr. Humphrey Ayim-Darke (President, Association of Ghana Industries), Mrs. Kosi Yankey-Ayeh (CEO, Ghana Enterprise Agency), Mr. Andy Akoto, (Partner, Advisory, KPMG) and Mr. Jonathan Lutterodt (Partner, Advisory, KPMG) as moderator. The panel discussion deliberated on a number of topics such as alternatives government can use to reduce inflation, understanding the implications of the ‘Nkabom budget’ on the operations of businesses, interventions needed to ensure sustained growth and resilience for SMEs and the way forward for Ghana amongst other topics. ​​​​​​​

Whilst discussing what initiatives in the Nkabom budget will help with SME growth, Mrs. Yankey-Ayeh highlighted the 1 District 1 Factory and Youth Start policies and explained its potential to support growth in the SME sector.  Dr. Ayim-Darke also proposed boosting our local production capacity to produce competitively for export markets. Dr. Twumasi Baffour acknowledged Ghana’s struggle to generate local revenue and explained that IMF assistance will offer Ghana the opportunity to shore up foreign reserves and restore confidence on the international market. She urged government to work to break out of the cyclical need for assistance spurred by economic mismanagement.

On SME development interventions, Mrs. Yankey-Ayeh asserted the need to support the agricultural and agribusiness sectors to boost local production and achieve import substitution. She elaborated on the significance of AfCFTA to SME development by providing access to bigger markets. She went on to give insight on how the Ghana Enterprise Agency through its SME business advisory services is helping position SMEs to take full advantage of AfCFTA.  The panel acknowledged that SMEs are the back bone of the Ghanaian economy and the need to pay closer attention to them as well as build and strengthen them.  Mrs. Yankey-Ayeh added that there needs to be initiatives which aligns with SME development and youth development as they are a huge part of the economy.  She emphasized that we need to have the right tools to strengthen the youth and build on them for the future as they are a big proportion of our demographics.  The formalisation of the SME sector was also a major discussion point during this segment with Mr. Akoto pointing out that cultural shifts and capacity building initiatives are key to encouraging informal businesses to formalise. Dr. Ayim-Darke also shared his thoughts on the 7 agenda items and the 3 things that stood out - namely: Aggressive domestic revenue strategy (policy of tax – direct taxation and indirect taxation), Export strategy (promote and diversify exports) and Boosting the productive sector.

Andy addressed the importance of balancing revenue mobilization and expenditure, explaining it is imperative that government be creative and innovative while implementing its economic recovery initiatives with discipline and rigour. He added that upon hearing the budget, his initial thought was “Things are going to get worse before they get better”.  Dr. Twumasi Baffour shared that surprisingly Ghana doesn’t make much revenue from the natural resources and even the projection for 2023 is less than 2% GDP.  She added that comparing this to countries such as Botswana which is doing 14% GDP from their natural resources, as a country we need to be asking our leaders a lot more questions. She added that revenue mobilization through taxes is similar to the chicken and egg issue and that if people do not see their taxes are working for them then there is no motivation to pay tax, so there is a need for transparency from government to encourage the payment of taxes.  Dr. Ayim-Darke emphasized restructuring the economy through industrialization to put it on a path to economic recovery. He reiterated the need to transition from pre-production taxation to postproduction taxation to help boost export and curb inflation.

On ESG, Andy shared that if we are not exploiting our resources responsibly then we are not getting the most out of it.  He also spoke on the need for government to integrate ESG measures into national policy and lead by example and added that the minister pledged fiscal discipline and that if you are asking citizens to tighten their belts, then they expect government to also tighten their belt. He emphasized the need to be transparent and that government should lead by example.  He ended by saying “I believe government has got the message: Accountability, transparency and leading by example”. 

Mrs. Joyceline Coleman gave the closing address calling for a deliberate and concerted effort in turning our discussions and deliberations into actions to foster economic growth as we are in this together, so we should use this period of crisis to restructure and build our industry and economy.

Overall, it was a very useful discussion with a number of suggestions, insights and ideas shared, which we hope to see implemented in the near future as the Government continues with negotiations on an IMF package.