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The mid-year budget review will be presented to Parliament tomorrow and there are speculations and expectations of taxes especially being reviewed upwards.
The main reason for the increase in these taxes is to use the money to fund consumption – a clear contradiction of their promise of moving from taxation to production.
This path is very worrying because already the prices of items coupled with rising oil prices have worsen the plight of the ordinary Ghanaian and businesses.
A further increase in taxes will lead to a hike in the prices of basic necessities. Obviously, an increase in prices will worsen the depreciation of the cedi if the theory of purchasing power parity is anything to go by.
Businesses are struggling with rising cost of production, rising cost of credit and low demand on the part of consumers.
The Association of Ghana Industries Business Barometer has already shown a drop in the business confidence index from 107.9 to 100.5 as at the end of the first quarter of this year. This is corroborated by the drop in ease of doing business in Ghana since the NPP took power in 2017 as indicated by the World Bank. This shows the struggles Ghanaian Businesses are facing every day.
Some government communicators have sought to justify the need for tax increases to address shortfalls in revenue. This however further validates my view that the TALK TALK AKUFO ADDO – BAWUMIA GOVERNMENT is LAZY. What happened to all the talks about expanding the tax net instead of overburdening the few who already pay tax ?
With over 42 billion cedis borrowed since the start of 2017, excluding the 4.7 billion cedis Energy Sector Bond,this current government has no significant capital project to show for this huge borrowings. Don’t forget this same government demonized borrowing & said they were not going to borrow – they are walking contradictions.
The Depreciation of the Cedi
The value of the cedi has seen a nose-dive. It is currently trading at GHC4.85 to the dollar. This is very terrible and is having dire consequences on the ordinary Ghanaian and businesses in general. This shows the state of the economy which clearly is going down the drain.
Rising inflation which is partly the cause of the cedis’ depreciation clearly shows those we have entrusted the country to for management have performed abysmally.
We are nowhere near December (a period where the cedi conventionally depreciates more) but the situation at hand already speaks volumes of gross economic mismanagement.
The Stifling Private Sector Growth
The Private sector has also had its fair share of problems. With stakeholders in the industry lamenting the rising cost of doing business, hikes in cost of credit and utility tariffs.
This clearly shows we are heading in a wrong direction as a country. The non-performing loan portfolio of banks has hit GHC 8.6 billion from GHC 7.1 billion which is a record high in the history of this country.
Not surprisingly, the private sector accounts for majority of this amount. This shows how the private sector is suffering under this administration-a government that claims to promote the interest of businesses.
In opposition, Prez Akuffo Addo & Dr Bawumia clearly stated that there was no need to raise taxes but that the country only needed a government that could block what they described as wastage , leakages and corruption.
Almost 2 years in office, we are all aware of the mammoth corruption scandals that have hit this infant government, their unprecedented OBOLO government is also further depleting the public purse that they claim they wanted to protect.
Chai, the situation at hand calls for some drastic measures to at least manage the situation while we wait patiently to VOTE out this super incompetent, Talk Talk government.
As for Dr Bawumia & his overhyped economic prowess, the cedi depreciation has exposed him. He earlier announced he had arrested the fall of the cedi & the key given to the IGP. Has the Cedi escaped jail?
Dr BAWUMIA’s abysmal performance as head of economic management team is clearly inconsistent with the things he said as vice presidential candidate.
Economics always has a way of betraying empty political talk.
Convener, Ghana First Patriotic Front & Aspiring Deputy National Youth Organizer of NDC.