CHAPTER 3
26. Too often, sectoral policies have been poorly designed and implemented, with
adverse effects on supply response and economic growth. Agriculture and
infrastructure, in particular, have become an increasing concern to the authorities. There
is an ongoing attempt to develop a comprehensive industrial policy, as well as to pursue
more aggressively the President's Special Initiatives in textiles and garments,
agroprocessing, and salt and oil palm production.
27. Relevant stakeholders in Ghana feel that policy-making for regional equity and
employment creation is receiving sufficient attention and making good progress. In
matters of poverty alleviation, economic growth, environmental sustainability and
gender equity, however, success has been modest.
28. Resource mobilisation efforts have been more successful from external than from
domestic sources. This state of affairs is regretted, as budget implementation may be
vulnerable to shocks in external development assistance flows. Hence, the CSAR
underscores the desirability of increased mobilisation of domestic resources. It lists
factors that have contributed to increasing the tax revenue to GDP ratio: improved
institutional capacity and recovery methods, improvements and diminished political
interference in tax administration, wider coverage of taxes, and increased commitment
to prosecuting defaulters. Improvements in the financial sector and macroeconomic
stability have increased the flow of loanable funds in the financial market. Capital flight
is also not a major hindrance to resource mobilisation.
29. Respondents to surveys of the CSAR ranked the top seven challenges to
macroeconomic management as follows:
? Oil price shocks;
? Volatility in export prices;
? Weak private sector;
? Large public sector Wage Bill;
? Weak internal capacity for mobilising resources;
? Dependency on donors;
? Unreliability of donor resource flows; and
? Inefficient use of public resources.
30. Policy reform would have a desirable effect on the large public sector Wage Bill,
internal resource mobilisation and the inefficient use of public resources.
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