The Minority in Parliament has delivered a damning verdict on government’s management of the economy with just 11-months in office.
The Minority is predicting there will be severe austerity equivalent to that of 1983 in Ghana next year because of the government’s poor management of the economy over the last 11 months.
At a budget preview forum in Parliament House, its spokesperson on Finance, Casiel Ato Forson said the government has failed in delivering on the many promises it made during the 2016 election.
He cited the reduction in taxes, which was promised by then candidate Akufo-Addo as one of the promises yet to see the light of day.
Rather than reducing taxes on importation, Mr Forson said with the three percent VAT flat rate scheme introduced by the government has led to importers now having to pay 20 percent tax on their imports.
“This vindicates the position as Minority when the three percent rate was introduced, but which unfortunately was ignored by the managers of the Ghanaian economy,” he said.
According to him, importers are also complaining about the astronomical increase in duty payments at the country’s ports since the government took over.
FInance Minister Ken Ofori-Atta
Mr Forson said it was important for government to use the opportunity during the budget presentation to address these concerns as failure to do so will worsen the business climate, especially at the time that Ghana has slipped 12 places on the World Bank’s Ease of doing business report.
“The deterioration is most unfortunate because around the same time last year under the NDC government, Ghana moved up 13 places on the same index and was adjudged the best place to do business in West Africa ahead of Nigeria and Cote d’Ivoire,” he noted.
On the country’s debt, Mr Forson wondered why the vice president and finance minister are yet to render an apology to Ghanaians for promising not to borrow but seem to be doing worse than the previous administration did.
According to him, the country’s debt has ballooned alarmingly within the first 11 months of the Akufo-Addo-led administration, a situation which is surprising especially when they touted their abilities to prevent this from happening.
“At the last reckoning, the public debt has increased from GHS122.6 billion in January 2017 to GHS138.6 billion as of June 2017 and is set to increase to about GHS150 billion by December 2017,” he said.
With this, the Minority is predicting that Ghana will go back to being a Highly Indebted Poor country, because the country may not be able to stand with the huge debt.
Mr Forson says the banking sector is in distress and will not be able to provide financing to ensure job creation due to the manner in which it has handled the Ghana Commercial Bank’s take over of UT and Capital Bank.
Government, he said, ignored the Minority’s advice cautioning it not to leave the original owners of the banks and transferring the liability to taxpayers as a fiscal measure.
“Our information suggests that GCB will be receiving GHS2 billion worth of government bond, which is an equivalent of one percent of GDP to balance its assets,” a situation the Minority decries.
For the Minority, it was the irresponsible conduct and mismanagement by the owners of the banks that led to the collapse and for government to be burdening tax payer, who is already troubled with high fuel and electricity prices and general hardship is most unfortunate.