Joe Jackson Calls for Economic Measures to Strengthen Ghana’s Fiscal Stability
Chief Executive Officer of Dalex Finance, Joe Jackson, has highlighted key economic reforms he believes are critical for addressing Ghana’s fiscal challenges and improving financial stability.
Reiterating views earlier expressed by former Finance Minister, Seth Terkper, on TV3’s Ghana Decides 2024, on the topic “Economic Hurdles That Will Confront the Next Government”, Mr. Jackson emphasized the importance of a national sinking fund, a shift to accrual accounting, and the need for a more sustainable approach to tax and budget management.
The Case for a Sinking Fund
Mr. Jackson described the sinking fund as a crucial emergency reserve for managing the country’s debt obligations.
“As individuals, we should have emergency funds covering at least six months of expenditure. Similarly, a national sinking fund ensures we are not perpetually tipping from one crisis to another,” he explained.
According to him, setting aside funds during favorable economic periods can help the government manage debt repayments and reduce the need for frequent borrowing.
Transition to Accrual Accounting
Speaking further, Mr. Jackson agreed with the former finance minister on the need for government to transition from cash accounting to accrual accounting, which he believes would enhance financial discipline and accountability in government contracting.
He noted that such a system would ensure money is allocated for contract payments, minimizing the financial risks associated with regime changes.
“In this country, when regimes change, contracts often go unpaid,” Mr. Jackson lamented, adding that this lack of certainty has made it challenging for financial institutions like Dalex Finance to fund contractors.
“If we had a system that assured payments for awarded contracts, it would transform the economic landscape for both private contractors and state-owned enterprises,” he added.
Balancing Tax Cuts with Fiscal Responsibility
On tax policy, Mr. Jackson cautioned against abrupt reductions without a clear strategy for balancing the national budget.
Making reference to the pledge by President-elect John Mahama to abolish taxes such as the E-Levy, Covid-levy, 10% betting tax, and others, Mr Jackson emphasized that any tax cuts must be accompanied by rationalized expenditure and sustainable revenue-generation measures.
“The question remains: if taxes A, B, C, D, and E are removed, where is the money going to come from?” he queried, urging policymakers to have a robust plan that satisfies international financial institutions like the IMF and aligns with parliamentary oversight.
A Call for Economic Ownership
In conclusion, Mr. Jackson stressed the need for Ghana to adopt a comprehensive, homegrown economic strategy. “We must take ownership of our destiny by ensuring our promises are matched with resources and actionable plans,” he stated.
These measures, he argued, are not just essential for achieving fiscal discipline but also for restoring confidence among investors and citizens alike.
