Ghana: Minority Accuses Govt of Throwing Economy Out of Gear
THE increment of levies in the mid-year budget review statement by the Finance Minister is indicative of the troubling economic times the country finds itself in, the Minority in Parliament has stated.
Mr Ken Ofori-Atta, the Finance Minister, presenting the mid-year review on Monday, increased five taxes and levies to enable it to mobilise more money to finance planned programmes for the 2019 fiscal year, service energy sector debts and improve service delivery.
They include a 21 per cent upward adjustment in the Road Fund Levy, the Energy Debt Recovery Levy and the Price Stabilisation and Recovery Levy.
Others are an increase of the Communication Service Tax (CST) tax to 9 per cent from 6 per cent and a raise of the Energy Sector Levies by 20 pesewas per litre for petrol and diesel and 8 pesewas per kilogramme for Liquefied Petroleum Gas.
He, however, proposed the scrapping of the Luxury Vehicle Levy, introduced in 2018.
At a press conference in reaction to the budget review, the Minority said the review presented by the Finance Minister “only offers gloom and portend very difficult times for all Ghanaians”, as they would compound the “excruciating hardships Ghanaians are already going through”.
Addressed by the Minority spokesperson on Finance, Mr Cassiel Ato Baah Forson, the opposition lawmakers said as a result, there was the need for the government to change course or “they will plunge the economy into much bigger challenges”.
According to Mr Forson, “the populist policies adopted by President Akufo-Addo have come full cycle and are throwing all gains made from the fiscal consolidation prior to the coming into office of the NPP government, out of gear”.
Despite what Mr Forson, a former Deputy Minister for Finance, described as “lofty and flowery talk” by the President Akufo-Addo government over the two years it has been in office, there was increasing hardship with periodic rises in the prices of goods and services among other unfavourable economic indicators.
“Ghanaians are suffering under the leadership of the NPP government that benefited greatly from the positive gains they inherited from the John Mahama led administration,” Mr Forson, MP, Ajumako/Enyan/Essiam, stated.
On public debt, which had increased from GH¢120 billion in 2016 to GH¢204 billion at the end of June 2019, Mr Forson said the government has surprisingly posted a “cosmetic positive primary balance for two conservative years”.
Projecting that Ghana’s public debt could hit GH¢220 billion by the close of the 2019 fiscal year, Mr Forson said the borrowing rate of the government was at variance with what was promised Ghanaians ahead of the 2016 polls.
“They created the impression that they could govern the country without borrowing, and that even if they borrowed at all, the funds would solely be channeled into capital investment,” Mr Forson noted.
In the view of the Minority, given the fiscal challenges confronting the country and the high level of public debt, it would not be a surprise if Ghana sought a bail out from the International Monetary Fund (IMF) less than two years after exiting a similar programme.