Opinion: 2022 Budget, the E-Levy and Ghana Telecom

Taxes and levies have always existed even in ancient civilizations and form an integral part of governance. Countries all over the world derive revenue through taxation and levies, hence the mouthwatering taxation to production promise by candidate Akufo-Addo, who literally begged the electorate to try him, was an opportunity to live up to expectations.

For a man who once stood against taxation, when the Value Added Tax (VAT) was first introduced into this country at 5% in the Fourth Republic by the Rawlings administration, his government ironically has endorsed an increment of 2.5% VAT from its initial 5% mark. Implicitly, Akufo-Addo deceptively led a militant organized provocative demonstration named ‘Kume Prɛko’. Thus, it is most unfortunate for the country to go through his draconian taxes and levies entangled in laced obfuscation and subterfuge.

It wouldn’t be any burden to the Ghanaian taxpayer, if for instance, an e-levy of 1.75% imposed on bank and mobile money transfers are targeted at specific development projects such as the judicious and prudent use of resources to complete the railway construction from Tema Harbour to Mpakadan through Akosombo bequeathed by the John Mahama administration which suffered malicious slander of a tag.

Ostensibly, the project, which has always existed in the muster development plan of Ghana to diversify transportation potentials and options and ease the burden on sole road transportation, which escalating maintenance cost isn’t just prohibitive but the costly horror of carnage on the roads due to vehicular accidents lost to human capital. The railway project, when completed, is expected to also haul bulky transit imports via Tema Harbour to landlocked countries through the idle water transport across the Akosombo River link to Buipe.

Whereas the previous Mahama administration secured dedicated funds for the completion of the Tema Harbour-Mpakadan railway project, it wouldn’t be out of place for the Akufo-Addo government to also brave the storm and prioritize the use of expected accrued revenue from bank and mobile money transfer e-levy monies to continue the project initiative and extend the railway track construction from Buipe to Paga.

But the track record of the Akufo-Addo government described by renowned economists as having engaged in reckless borrowing and immersed in borrowing for consumption, isn’t worth and doesn’t deserve the public trust of 1.75% in e-levies after plunging the economy with a saddled 77% of debt to GDP ratio from an inherited 55.94% in 2016.

When Akufo-Addo first took over power under his own promises and assurances to protect the public purse, he was most adamant in his fight against corruption and incompetence in his government much as he did with the reckless borrowing for consumption by his government. Several petitioned and reported cases of scandals in his government went unchecked. And he exercised executive powers to clear all such named functionaries caught on record in acts of financial malfeasance, earning him the unpleasant accolade of a clearing agent alias Mr Lomotey.

In recent times, Akufo-Addo has engaged in the lease of a private luxury jet for his international itinerary travels which cost the taxpayer a minimum of £14,000 per hour. In total, close to £ 12m has been spent so far; with the insatiable appetite of the Office of the President of the Republic of Ghana whetted as ever. The presidential aircraft acquired for such dedicated purpose, has been described by Akufo-Addo’s handlers as not airworthy for long haul travels. But aviation experts dispute such claims.

Also, in the 2022 Budget Statement, a whooping equivalent of US $500m in Cedis has been allocated to Government Machinery, a euphemism to allocation to the Office of the President of the Republic of Ghana. Statistics have revealed that Ghana lost GHS 12.2b to corruption, since Akufo-Addo took office. This statistics and further details defeat and make empty the clarion call by Akufo-Addo, when he said he’d protect the public purse and make corruption in government circles an unpleasant business.

Some analysts have done some background contrast and related that even the US government spends US $700m for a similar purpose. In relative terms, the tax returns of, for example, Microsoft is even more than the entire Ghana Government economy. It is on such basis in support of a call by many for government to invest devotedly in the agriculture sector, in criminal justice and governance, in education, in the energy and health sector to boost and stimulate growth in the national economy.

To appreciate the import of all the above, the following paragraphs are to help elucidate their class, ethnic and political oiled underpinnings.

The elephant has a long memory for destruction. Farmers and settlers in elephant-infested catchment areas poach them not necessarily for food or their prized tusks of ivory, but for their nuisance. NOTE: the author by this stretch of imagination isn’t endorsing poaching of such endangered species of animals.

That was in reference to an animal. The link is aimed at the NPP, which has an elephant as its totem. In a way, the behaviour of the NPP is similar to the destructive character of the elephant, if not worse. Just as the elephant has a long memory not to forget it’s targeted enemy or enemies, the NPP has publicly bared its teeth at perceived arch enemies nursed by their ancestors even before the independence of the Gold Coast, now called Ghana.

Manifestly, when President John Agyekum Kuffour took office from January 7, 2001 to January 7, 2009, one of his repeated deliberate mistakes of the Busia-Danquah tradition was to supervise the destruction of policy directions of previous investments by governments of different traditions, especially those established by the First Republic; except those directed at immovable ones like the Akosombo Hydro Electric Dam and the Volta Aluminium Company.

Of course, the venom leashed by the Kuffour government at former NDC government functionaries in the first and second governments of the Fourth Republic under HE Flt Lt JJ Rawlings, killed the establishment of Aveyime Rice Project, an initiative meant to minimise the importation of rice from abroad, which didn’t only weigh against government’s balance of payment in foreign exchange, but it also outsourced Ghana’s rice cultivation to these countries and contributed hugely to the curtailment of means of livelihood of millions of of Ghanaian rice farmers and continously leading to increment in mass unemployment.

After collapsing Ghana Airways, HE John Agyekum Kuffour further proceeded and went ahead to sell Ghana Telecom to owners of Vodafone, including assets like the University College of Telecommunications at Tesano, which started as one of such sector training schools established under the First Republic to equip personnel and the youth with employable skills in the emerging economy of the newly independent country.

As if that wasn’t enough, the Kuffour government also supervised the addition of Ghana’s fibre optic assets valued conservatively at the time to be worth US $1b, to the offer made to Vodafone. Ghana Telecom, a state monopoly at the time, has been beaten to a yawning second place gap by industry player, MTN, since Vodafone acquired majority shares of the company.

Owners of MTN, Scancom, however, built everything from scratch, starting as Spacefon in 1994. Spacefon was later acquired by Areeba, which later went on to relinquish its majority shares to South Africa’s telecom giant, MTN. With such quantum of resources made available to Vodafone, it should have continued to lead in the industry, putting MTN in the category of the current position of Tigo/Airtel owned by Millicom now sold to GoG, Glo owned by Conpetro Nigeria Ltd and Expresso (Kasapa) owned by Sudatel.

Why this lengthy prelude? The long and short of it is to point out the key role of telecommunications in the emerging global technological economy. And this confirmation was pronounced heavily in the 2022 budget statement, when the Akufo-Addo government presented a policy decision to raise revenue from bank and mobile money transfers to finance its borrowing for consumption lifestyle. The budget statement pegged the tax rate at 1.75%, starting from a minimum of every GHS 100 transferred per day.

If the Kuffour government didn’t identify the high premium placed on the telecom industry perceived by the visionary Osagyefo Kwame Nkrumah, and prioritised by HE Flt Lt JJ Rawlings, when he thrust Ghana Telecom into the hands of a Malaysian strategic investor; how did the Bawumia-Akufo-Addo government miss such a point in opposition and in government has decided to underplay and suffocate the industry?

Dr Bawumia promised (in his recent Greenfield of digitalisation as a failed whizkid in economics) to deliver a cashless society by the end of the eight years tenure of the Bawumia-Akufo-Addo government. But many in a recent panic withdrawal reaction, have since resorted to hold on to cash to avoid the biting consequences of this harsh policy of e-levies targeted at bank and mobile money transfers.

Since the presentation of 2022 budget statement with e-levy featuring prominently as the Agyenkwa, following the death knell brought on the economy by the Asempa, Adwuma, Mpuntuo and Obaatanpa budgets on the economy, the country has since been thrown into a state of mourning as the chorus of ‘ɛnkɔ yie’ is echoed at every turn of the country.

“Ei, gya! Asetena pa ma awerefere!” What must have informed the inputs for Ursula Owusu-Ekuful in her computational results, that anyone making a mobile money transfer of GHS 100 is a rich person? By those criteria, Ken Ofori Attah, his Databank and Enterprise Group and many of his ilk in the NPP and across the masterminds behind the OccupyGhana onslaught agenda on JM’s government, weren’t successful before being appointed as functionaries of the Bawumia-Akufo-Addo government.

By that contrast, the debt with Prudential Bank was settled only after the NPP assumed office in 2017. From that deficit low, Databank now owns 20% shares of GOIL. GOIL in a strange move as a public corporation has refused to disclose in its financial statement covering assets, a planned bitumen processing plant, the largest of its kind to emerge in West Africa. The plant has reached an advanced takeoff stage. Together with Enterprise Group, Databank has also accessed the use of premises and properties owned by collapsed indigenous banks.

[To be continued]

By Cadre Shmuel Ja’Mba Abm