KPMG-UNDP 2024 Pre-Budget Survey KPMG-UNDP 2024 Pre-Budget Survey
Key Findings
1. Fiscal policies: The survey revealed that businesses and individuals are seeking a review of some tax laws including the COVID-19 levy, petroleum levy, import duties, and growth and sustainability levy. We recommend a broad-based review of these tax policies. Abolishing some of these taxes or lowering the tax rates may initially reduce tax revenue, but are likely to positively impact consumption and expenditure and thus, ultimately enhancing tax revenue. 2. Review of Free SHS: The Free SHS programme has effectively boosted secondary school enrolment and would create a skilled workforce. However, the financial burden on the Government is substantial. We suggest revising the policy to permit financially able parents to contribute to the cost of SHS education while ensuring continued free access for needy students. 3. Structuring of the power sector: Power supply emerged as a significant challenge. We recommend that the Government continue to strengthen structural reforms in the power sector to ensure stable and reliable supply, reduce losses, and enhance overall efficiency. Such reforms should prioritise access to renewable energy in the energy mix. A robust power sector is crucial for sustainable industrialisation, infrastructure expansion, and socioeconomic development. ...
KPMG - UNDP 2024 Pre-Budget Survey Report
The tightening of global financial conditions coupled with local challenges have had a significant negative impact on our economy. Despite the challenges, government is implementing policies and programmes to restore macro-economic stability. The International Monetary Fund (IMF) has projected the global real GDP growth to contract to 3% in 2023, from 3.5% in 2022. Due to sub-Saharan Africa’s high susceptibility to external shocks, the IMF regional economic outlook published in October projects the region’s real GDP growth to decline to 3.3% in 2023, from 4.0% in 2022.
The above conditions have prolonged an acute economic crisis which began in 2022. By mid-year 2023, the Government had achieved significant milestones, including the successful completion of the initial phase of the domestic debt exchange programme (DDEP) and receipt of the first tranche of the US$3 billion Extended Credit Facility. Concurrently, progress continues with the second phase of the DDEP, and preparations for external debt restructuring are in progress. The results of these Government actions are beginning to show in the marginal stability in the economy. In particular, provisional data released by the Bank of Ghana reveals that Ghana’s economy grew by 3.2% in the second quarter of 2023, down from 3.5% in the same period last year. Nonetheless the headwinds of economic difficulties are still strong with inflation marginally below 40% and stable economic recovery may be achieved beyond 2023.
Each year, KPMG surveys respondents from businesses across several industries to gather insights on the impact of government policies on business performance. In addition, the insights serve as input in shaping the formulation of the national budget. In partnership with United Nations Development Programme (UNDP) this year, we obtained responses from businesses across Financial Services, Energy and Natural Resources, Telecommunications, Media and Technology, Consumer Goods and Industrial Markets, Hotels and Hospitality, etc.
This report comes at a time when the Ghanaian economy is recovering from severe economic crisis. Businesses, households and individuals are eagerly anticipating the further direction of the Government’s policy in bringing faster growth and economic stability in particular, in 2024 and beyond.
Results from the survey revealed that currency depreciation, high inflation, interest rates, and the tax environment have had significant negative impacts on business performance in 2023. These effects have been amplified by severe restrictions in access to credit, difficulties in retaining skilled labour, power supply constraints, and supply chain disruptions. Respondents, therefore, recommend a review of a gamut of taxes including e-levy, import levies, petroleum levy, and growth and sustainability levy in the 2024 budget. In addition, respondents advocate for fiscal policies that are focused on investment in the productive sectors including agriculture, support to manufacturing and export sectors, continuing with digitalisation aimed at widening of the tax net, a review of the free Senior High School (SHS) policy and expenditure rationalization.
Respondents understand the significance of SDGs, emphasizing No Poverty, Good Health and Wellbeing, and Decent Work and Economic Growth as the top 3 SDGs for their businesses.
Respondents are advocating for dedicated climate financing funds. The survey highlights a growing awareness of ESG with 76% of respondents expressing interest in evaluating the Government spending and investments using ESG standards. These insights illuminate the evolving landscape of sustainability in Ghana's economic framework.
Overall, the findings highlight that the 2024 budget should prioritize policies that promote inclusive green growth by strengthening local businesses and promoting exports through industrialization, mechanisation of agriculture to promote food security and infrastructure development. We hope the insights from the survey will help Government in their deliberations and provide valuable contributions in the lead-up to the 2024 Budget.
