The Islamic Finance Research Institute of Ghana (IFRIG) wants the government to stick to best practices in matters relating to budget-related expenditures in the months leading up to the 2024 general elections.

The research and advocacy outfit believes a recent comment by a deputy finance minister that the government would not engage in a spending spree and would also not introduce any new taxes was a welcome development.

Director of IFRIG, Dr. Shaibu Ali, told GhanaWeb that the comment by Dr. Stephen Amoah (deputy minister) was what was widely expected of the government given the current economic realities, chiefly the International Monetary Fund (IMF) and its attendant debt restructuring dynamics.

“Any government in an election year is cautious—very cautious with taxes, usually for political reasons. Taxes in an election year are a high-risk undertaking, so it is to be expected that 2024 will be a tax-free mid-year budget.

“The issue is with the spending aspect of the pledge of Dr. Amoah, as reported by the state-owned Daily Graphic. At IFRIG, our call is for the government to do all it takes to resist the temptation to engage in out-of-budget spending; it would require massive fiscal discipline, and that is what we want to entreat the government to do,” he stressed.

According to Dr. Ali, taxes and spending are two core areas industry players expected the government to commit to, but a formal pronouncement by the deputy minister was “very welcome news; the ball is now in the court of outfits like us and analysts to police the pledge,” he added.

The Minister of Finance, Dr. Mohammed Amin Adam, will, on July 23, present the 2024 mid-year budget review to Parliament. It would be the final budget of the Nana Addo Dankwa Akufo-Addo-led government.

IFRIG offers innovative ways to lessen impact of economic downturns

IFRIG, as a flagship Non-Interest Banking and Finance (NIBF) advocacy institution, believes that the area can be leveraged by governments to especially boost inflows for infrastructure financing year in and out.

The institute remains buoyant of what the future holds for NIBF and is calling on all political parties to increasingly gravitate towards giving NIBF the necessary policy backing to be able to roll out products for government, businesses and individuals.

IFRIG believes that the governing New Patriotic Party (NPP), the main opposition National Democratic Congress (NDC), and other flagbearers should not miss out on including NIBF in their respective manifestos ahead of the 2024 elections.

IFRIG’s head of projects and programmes, Ismail Awudu Yahaya, believes that political commitment would kickstart the biggest alternative finance ecosystem, which would help plug some of the challenges the economy is currently facing.

“IBF is not a new area; it is globally accepted and practiced across major economies, and its ethical underpinnings are one of its biggest selling points. Ghana cannot continue to miss out on the array of options it offers,” Awudu Yahya reiterated.

What did the deputy minister say?

Speaking to the Graphic Business on the sidelines of a stakeholder engagement to solicit inputs into the mid-year budget, Dr Stephen Amoah said the government would not repeat mistakes associated with the normal election-year political business cycle of overshooting its budget.

"Normally, in election years, government would want to solve some of the problems and concerns to win votes but this harms the economy and worsens the deficit position.

“So, we are not going to toe that line and we are going to demonstrate our commitment to fiscal discipline by not asking for any supplementary budget,” he said.

About IFRIG

IFRIG is, first and foremost, a research institution focused on the Islamic banking and finance ecosystem in the country and West African subregion.

"Our efforts currently pivoted in the area of research, advocacy, and capacity building have the medium- to long-term aspirations of leveraging research to usher Ghana into an incremental adaptation of Islamic finance—banking and insurance," a post on their website read.

IFRIG’s flagship programme is the Islamic Finance International Conference (IFIC). This year’s conference is scheduled to take place at the Omanye Aba Hall of the Accra Metropolitan Assembly on October 5, 2024.

Since 2020, the annual event has pooled together experts from Ghana, the West African subregion, and beyond to continue sharing perspectives on the importance of non-interest banking and finance for the wider socio-economic good of Ghana specifically and the global economy.