An Economist in the United States of America, Dr. Sa-ad Iddrisu, is calling on government to reduce import duties and petroleum taxes in the country to help cushion Ghanaians in these difficult times.
Dr. Iddrisu made this call on Monday during a zoom lecture on the state of the Ghanaian economy, with some Ghanaian students in the U.S.
According to Dr. Iddrisu, Pricing of food stuffs, household items and petroleum products are skyrocketing now and something must be done by the government to mitigate the effects on Ghanaians.
Take for instance petroleum products, there are about seven taxes that adds up in the ex-pump price build-up published by the NPA on March 16, 2022.
These are Energy Debt Recovery Levy, Road Fund Levy, Energy Fund Levy, Price Stabilization and Recovery Levy, Sanitation and Pollution levy, Energy Sector Recovery levy, and Special Petroleum Tax.
Government can reduce or put a complete pause on these taxes for the time being, which will invariably help in reducing fuel prices in the country.
Dr. Iddrisu also added that, although there are rising prices in crude oil in the international market due to Russia invasion of Ukraine, many governments are putting in measures to mitigate the effects on their citizens and Ghana should not be left out.
Even though crude oil prices are rising currently in the international front due to Russia invasion of Ukraine, some governments are still sensitive to the plight of their citizens and are putting in measures to cushion them, of which Ghana should be doing the same. For instance, Thailand, South Korea, India, Guyana, Barbados, and other countries have all embarked on similar tax cutting measures on petroleum products to cushion their citizens in times of difficulties, he said.
He also said that government should abandon the E-Levy dream now and look to cutting the expenditures of the executive by 50%.
Ghana is hard now and the government should not be dreaming of passing the E-levy.
It should rather focus on cutting down salaries and benefits of appointees as well as expenditures associated with the day to day running of the government by 50%, including that of the Jubilee House.
Passing E-levy in these hard times will just prove the government is insensitive to the plight of Ghanaians and posterity will never forgive them, he said.
Dr. Iddrisu also asked the government to direct its attention to the auditor general’s reports and find ways to recover missing funds as well as seal all the leakages in the system. That he says will save the government from worsening the plight of Ghanaians with E-levy.
The government should direct its attention to the auditor general’s reports over the past years and recover missing funds, and also seal all leakages in the system. When this is done effectively, the government will not need to impose E-levy to further worsen the current economic hardships in the country, he said.
Dr. Iddrisu also spoke on the excessive government borrowing and called for constitutional amendments to put a limit on government borrowing.
According to the Bank of Ghana Monetary Policy Report for January 2022 and January 2017, total stock of Ghana’s public debts stood at GH¢344.6 billion at November 2021 and GH¢127.3 billion as at November 2016, respectively.
That is a dollar equivalent of $58.2 billion as at November 2021 and $30.1 billion as at November 2016, using past and present exchange rates. This means that the current government under Nana Addo in 6 years has increased our public debt by 93.4%, using the dollar equivalent for comparison.
That is to say, Nana Addo government in six years has borrowed almost doubled of what all governments borrowed since independence in dollars. Yet, there hasn’t been much capital expenditures that can generate much returns to pay off all these loan interests and principals. These huge debts will be a milestone around the neck of generation upon generation, he said.
Dr. Iddrisu stated that scenarios of this nature puts a burden of debt on present and future generations. Thus, amending the constitution to put a limit on how much any government can borrow whilst in power, will go a long way to curb reckless and excessive borrowings.
To this, Dr. Iddrisu suggested amending the constitution to limit successive governments to not borrow more than 50% of current total debts as a nation, in dollar equivalent, and also to use 80% of borrowed funds for capital expenditures. This will protect future generations from the sins of current leaders.