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Some commentators in Ghana have argued that economic policymakers should allow automatic stabilizers to shape and direct the destiny of the economy rather than discretionary fiscal policies since the latter has failed woefully.
Required:
Distinguish between automatic stabilizers and discretionary fiscal policies as economic tools. Illustrate with examples.
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Countries, including Ghana, have embarked on various tax reforms geared towards improving tax revenue to help provide infrastructure and guarantee sustainable growth. Tax administration in Ghana has therefore seen a number of reforms over the years, including restoring the tax base, improving tax administration, and the integration of the Revenue Agencies into an Authority to act as a one-stop shop as per the Ghana Revenue Authority Act, 2009 (Act 791).
Required:
In reference to the statement above, analyze TWO challenges (key issues) on tax reforms in Ghana.
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a) Monetary policy and fiscal policy are two different tools that have an impact on the economic activity of a country. Policy adjustments and institutional safeguards are needed to ensure that the two policies remain firmly within the region of stability.
Required:
i) Distinguish between Monetary Policy and Fiscal Policy.
ii) State FOUR monetary policy tools used in Ghana.
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Efforts to improve Public Financial Management (PFM) Systems in Ghana led to the Ghana Integrated Financial Management Information System (GIFMIS), which is an adaptation of the Integrated Financial Management Information System (IFMIS). The rationale of GIFMIS is to establish an integrated ICT-based PFM system in Ghana at national, regional, and district levels.
State FOUR benefits of GIFMIS to the government of Ghana.
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As the Accountant in charge of the expenditure division, you are to assist the Director of Finance in the ministry to set up a budget committee. You have also been asked to review the recently issued 2020 Budget Call Circular.
Required:
Explain briefly the following:
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The accumulation of external debt is a common phenomenon in developing countries at the stage of development where external resources are needed to bridge budgetary gap.
Required:
a. Explain what is meant by External Debt. (3 Marks)
b. Discuss the causes and likely adverse consequences of the rising level of Nigeria’s total external debt stock. (12 Marks)
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Revenue generation is an important role carried out by some agencies of government with a view to meeting the expenditure of government, required for taking care of the welfare of the citizens. Revenue Mobilisation, Allocation and Fiscal Commission Act 1989 specifically mentioned some powers and functions of the Commission.
Required:
a. Identify FOUR powers and responsibilities of State Board of Internal Revenue Service in Nigeria. (4 Marks)
b. Explain FOUR specific functions of the Department of Petroleum Resources (DPR). (4 Marks)
c. Highlight SIX powers entrusted to the Revenue Mobilisation, Allocation and Fiscal Commission. (6 Marks)
d. Explain THREE sources of revenue payable to the federation account in Nigeria. (6 Marks)
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Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
a) The current level of government borrowing has become a topical issue for discussion, causing observers to wonder whether borrowing is good or bad. In the light of this, you are required to:
i) Evaluate the effect of government borrowing on the economy of Ghana. (4 marks)
ii) Discuss how taxation can be used as a fiscal tool in fiscal policy. (6 marks)
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Mining companies are given some benefits in their operations in many countries to help them create benefits for their host governments and shareholders. One of the benefits of the mineral operation is the stability agreement that mining companies sign with host governments the world over.
Required: What does stability agreement seek to achieve for mining companies in Ghana? (6 marks)
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Budgeting is an important process by which government plans its programmes and activities for a given fiscal period. For a budget to be effective in the delivery of the economic and social agenda of the government, the budgeting process should be linked to the macroeconomic and fiscal policies of the country. No wonder the Public Financial Management Act, 2016 (Act 921) has made extensive provision on macroeconomic and fiscal policies to guide the government in its budget formulation and execution. The budgeting process is preceded by fiscal policy planning to serve as a foundation for the realization of the inspiration of the budget. A national budget is a means to an end and not an end in itself; therefore, it should be controlled and managed holistically to achieve the desired economic, fiscal, and social outcomes. The Minister of Finance, the Principal Account Holders, and Principal Spending Officers are actively involved in post-budget management and control activities at various levels to ensure that the budget targets are achieved.
Required:
i) Explain the primary fiscal policy objective of the government and identify THREE (3) guiding principles in the formulation and implementation of a fiscal policy objective.
(3 marks)
ii) Explain FOUR (4) post-budget management and control activities prescribed under the Public Financial Management Act, 2016 (Act 921).
(4 marks)
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a) Governments take certain measures with a view to influencing aggregate demand in their economy.
Required:
i) Distinguish between fiscal policy and monetary policy. (2 marks)
ii) Explain TWO adverse effects a contractionary fiscal policy could have on businesses. (4 marks)
b) Papa’s Skin Ltd is an Accra-based clothing company owned and managed by its two founders. The company has been selling to only domestic consumers in Ghana since inception. The founders think it is time to extend the operations of the company to foreign markets, particularly those in neighbouring West African countries. Moving into foreign markets requires additional financing and capabilities, which the company does not have. The owners have agreed on ceding 40% stake in their company to a strategic investor who would provide the additional financing and capabilities needed to compete successfully in the international business environment. However, they are not sure of what range of prices to accept for the shares they would give up.
Below is a summary of financial data for Papa’s Skin Ltd for the recent financial year:
The following information is relevant to the position and value of Papa’s Skin Ltd:
Required:
i) Estimate an appropriate required rate of return on the equity stock of Papa’s Skin Ltd. (2 marks)
ii) Estimate a range of suitable considerations for a 40% stake in Papa’s Skin Ltd using the net assets method, P/E ratio method, and dividend valuation method. (12 marks)
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