A former Deputy Minister for Finance in the John Mahama administration, Cassiel Ato Forson, has said the current economic challenges being faced by Ghana under the Nana Akufo-Addo government is more of an expenditure problem and not the lack of revenue.
According to him, even though more revenue sources have been made available to this current government as a result of deliberate policy initiatives undertaken by the previous government the Akufo-Addo government has failed to put in place prudent policies that would harvest the revenues and prioritize them for the productive sectors of the economy.
Rather, he observed, the government is using the resources that have been bequeathed it to fund campaign promises to the detriment of critical developmental projects, hence the upsurge of consumption expenditure as against the decline in developmental expenditure in the economy.
The Former Deputy Minister and now Ranking Member on the Finance Committee of Parliament raised these issues at a Round-table Breakfast Discussion on the perspectives of the Minority Caucus on the Mid-year Economic Performance and Projections held at the Justice Annan Auditorium in the Job 600 building of Parliament on Monday July 16, 2018.
Addressing the gathering which had in attendance Civil Society Organizations such as the CDD; representation from Labour Unions such as the Trades Union Congress (TUC), Teachers Union, Association of Road Contractors; as well as the National Union of Ghana Students (NUGS), among others, Cassiel Ato Forson indicated that the economy has performed under its potential under the supervision of Vice President Dr. Mahamudu Bawumia who has been touted as an economic magician.
“Given the potential growth that was forecast by institutions such as the World Bank in 2016, we can argue that the NPP is rather supervising a real sector economy that has performed below its potential. This is the direct outcome of channeling the oil revenues into consumption instead of investments and managing the public debt,” he stated.
He took pot shots at the Vice President who is the Head of the Economic Management Team for supervising heavy doses of tax cuts in the economy and still expecting revenues to grow to meet the fast pace of expenditure by the government.
“It is unthinkable and naïve for any economist to assume that cutting or worse still eliminating taxes, concurrent with expansion in expenditure, in a small open economy like Ghana, with a developing private sector, would immediately translate into economic growth, and increased tax revenue. Hence, since 2017, not even the increased petroleum revenues from additional crude oil and gas production as well as recovery in oil prices has been able to take care of the overall revenue shortfalls.”
The Ranking Member therefore claimed that any positives being observed in the economy should be attributed to the previous administration for its foresightedness and superior economic prowess.
“The antecedents of the growth that we see today are in policies of the Mahama Administration, such as the Partial Risk Guarantee (PRG), which facilitated the increased oil production from the TEN and Sankofa Fields as well as the Emergency Power Plan, both of which the NPP opposed and vowed to remove on assumption of power.”
Meanwhile, the Finance Minister, Ken Ofori Atta is scheduled to present the Mid-year review of the economy to Parliament on Thursday, July 19, 2018 where it is anticipated that he will announce some tax increases in an effort to make up for revenue shortfalls in the economy.
Source: Clement Akoloh || afriwakeradio.com