Reforms Needed To Achieve Upper Middle-Income Status

 

The Minister of Finance, Dr. Cassiel Ato Forson says without comprehensive reforms, Ghana will only achieve Upper Middle-Income status after 2050.

He, therefore, called for an urgent need for comprehensive policies and institutional reforms to help enhance productivity, improve the quality of infrastructure, and services, and elevate human capital and workforce skills.

The Minister who said this in a presentation on the state of the Ghanaian economy at the National Economic Dialogue 2025 in Accra indicated that such reforms have the potential of transforming Ghana within a generation thereby tripling its per capita income by 2050.

He also stated that Ghana needs to take advantage of its “demographic dividend,” adding that with 500,000 young people joining the labor force each year, there is an urgent need to implement ambitious reforms to reset the economy in the next four years.

The Finance Minister further mentioned that with the current growth model, growth will reduce to only 3.8% thus 2.4% GDP per capita in less than 15 years adding that the current growth model will not be sufficient to meet Ghana’s needs and aspirations.

He said the government’s economic transformation is hinged on resetting the economy and creating prosperity for all, jobs for all, Ghana’s framework for industrialization, support and transformation, and deepening international relations and policy.

The rest are powering growth through infrastructural development, investing in people for inclusive growth, restoring good governance, and combating corruption.

He further indicated that Ghana’s Domestic Revenue Mobilization (DRM) has stagnated in the last decade and remains below its peers giving collected revenues of 13.5% of GDP in 2023.

“Collection from all major taxes remain low, especially VAT, as compared to our peer countries.

Numerous exemptions and the complexity of the tax system have a detrimental impact on revenues. Tax administration challenges also contribute to a compliance gap,” he added.

The Minister also mentioned compliance with public financial management and public procurement laws, implementing robust commitment controls to maximize value for money to ensure fiscal discipline as well as enhancing the efficiency of public spending in social programmes and public infrastructure as part of several measures to stabilize the economy.

By Ebenezer K. Amponsah

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