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2024-2025 fiscal policy crisis: Project funding, execution stall over poor budget implementation

The 2024-2025 fiscal policy crisis is affecting project funding and execution due to poor budget implementation.

By Rhalialt Arhuoizah 

Let's break down the key challenges and potential solutions:

*Challenges:*

- *Inadequate Budget Allocation*: Insufficient funding for critical sectors like education, healthcare, and infrastructure hinders project execution.
- *Poor Project Prioritization*: Misaligned spending priorities and delayed project approvals stall progress.
- *Inadequate Tax Collection*: Low tax revenue and high subsidy expenditure strain the budget.
- *Fiscal Deficit Management*: Managing interest payments on past loans and unexpected crises like natural disasters or pandemics adds to the challenge.

*Solutions:*

- *Rationalize Subsidies*: Target subsidies more effectively and implement Direct Benefit Transfers to ensure aid reaches those who need it most.
- *Expand Tax Base*: Improve tax collection by making filing simpler, promoting digital transactions, and encouraging transparency.
- *Invest in Revenue-Generating Sectors*: Focus on investing in sectors that can generate revenue and reduce reliance on borrowing.
- *Build Financial Resilience*: Set aside contingency funds and invest in sectors that can withstand economic shocks .

*Specific Sectoral Challenges:*

- *Agriculture*: Insufficient allocation for agricultural production and lack of clear strategies for financial assistance.
- *Manufacturing and Trade*: Limited focus on manufacturing and trade, with the discontinuation of initiatives like the One District One Factory (1D1F) program in Ghana.
- *Job Creation*: Limited funding for job creation mechanisms, such as the Women’s Development Bank and National Apprenticeship Programme in Ghana .

To address these challenges, governments can prioritize:
- *Mid-term Budget Reviews*: Conduct regular reviews to assess execution and introduce necessary corrections.
- *Transparency and Accountability*: Ensure transparency in budget allocation and project execution, with accountability mechanisms in place.
- *Human-Centered Approach*: Prioritize people-centric policies and allocate sufficient funds for social sectors like education, healthcare, and social welfare .