2017 BUDGET STATEMENT,
A CONFUSION BETWEEN POLITICS AND POLICIES.
Denis Andaban writes.........
Hon Ken Offori Atta on the authority of president Nana Addo Dankwa Akufo Addo presented his maiden economic policy outline to Parliament in pursuance of article 179 of the 1992 constitution of the Republic of Ghana.
As a student writer and ardent follower of national politics, I sacrificed my *creative writing* lecture for the lengthy presentation of the policy proposal by the finance minister.
I spent time following the presentation so that I can discuss the issues with confidence and alacrity, to avoid the usual political hook wings by some political communicators, who may not have the intellectual sagacity in economics to make any meaningful analysis. That is very common in a multi party society like Ghana where political communicators turn into jacks of all trade though they are really masters to non. In my piece, I intend to analyze only some few areas of interest in the budget statement since space and time wouldn't allow me to touch on everything.
While I was listening keenly to the "throat chocking presentation", two fundamental questions kept begging for answers. I wish I could answer immediately but I had not finished satisfying my curiosity especially when my expectations from the finance minister were very high, considering the plethora of promises given by the NPP prior to the 2016 elections that crowned them winners to act in their current capacities. May be it is still relevant to state the questions in this piece.
Are we in a country pursuing an economic path that can make us economically sufficient and independent or we are pursuing an economic path illy engineered by political expedience? These two fundamental questions demand answers before one can conclude on any judgement on this budget statement.
In my view, we are adopting an economic path with political cloaks that has the propensity of leading us to a more porous, ailing, dependent and volatile economy, prone to more global economic shocks. Let's touch on few areas.
Firstly, the finance minister has asked to abolish taxes on the importation of raw materials. Well, this is good news to importers and of course, countries who may take advantage to increase their export. The question I ask is, do we consider the medium to long term economic effects on our country? The NPP government promised Ghanaians of one district, one factory. Meaning it believes that industrialisation is the major way of solving the catapulting rate of unemployment, solving the perennial balance of payment deficit, strengthening our national currency, increasing investor confidence among other juicy economic returns.
I will always support industrialisation as the major catalyst of rapid economic transformation. Indeed, the western powers like America adopted industrial revolution in the19th century as a major tool for growth and it fantastically did the economic magic for them.
Also, I believe that, industrialisation is the major magnet to large scale mechanized agriculture since many a farmer will want to produce more to maximize profit in an already readily juicy market engineered by industries that need locally produced raw materials to operate.
Contrary, if we allow tax free importation of raw materials to feed the industries that we want to set up, then believe me, we are not strategic to developing the agricultural sector. The industries will collapse. Even when such industries do not collapse, they will largely create employment in countries that can produce and sell raw materials to us. In my view, the budget should have allocated more resources to creating an enabling environment for people to locally produce raw materials to feed our industries. That is the only way we can strengthen the economy through self sufficiency, jobs and harmonization of all the other sectors of the economy.
Also, the finance minister was very loud and bold to announce that ,taxation on the importation of spare parts is scrapped. I learnt many spare part dealers celebrated over this new development after the presentation of the budget. The reality is that I don't see the economic sense in the abolition of such an important strategic economic tax. African developing economies have always faced a challenge as their markets become a dumping refuge for second hands goods. The health implications of such goods from the developed economies cannot be immediately quantified.
We are still battling with issues of environmental sanitation, pollution among other environmentally emerging predicaments with adverse health implications. Indeed government continue to spent much on health and sanitation. The tax on spare parts was necessary to help us battle with the above challenges. I don't see the sense in the removal of such a tax. In any case, the large majority of Ghanaians cannot afford cars to talk of their spare parts. Those who have the ability to afford are the few middle class or the rich. Issues of health and sanitation affect everybody in this country. Abolishing such a tax only stifles economic growth since it can only worsen our balance of payment deficits.
In the part of abolition of taxes on "kayeye", I saw too much politics in that. I stand to be corrected, there is no national tax levy on "kayaye". If some local authorities used to levy those poor head porters, does it take the national budget to correct that? Why is the budget not finding alternatives to problems faced by these poor head porters? Most of these head porters are people who are unable to get jobs. We must find options to ameliorate their suffering and not encourage them into that pathetic business by making such political expedient bony policies on them. In fact, the NPP promised them jobs and should not run away from it.
Again, debate ensuing the government promise of free senior high school education has not been put to rest since the budget did not specifically tell us the sources of funding. To say that, funding will come through the annual budgetary allocations and other domestic sources is vague and sounds more rhetoric. Also, the announcement that the implementation will start with the 2017/2018 academic year, that is first year of the SHSs make me think that the promise is nothing different from the NDC promise of progressively free secondary education which they indeed started the implementation before leaving office. Again, I see politics and not policy in it.
I think the finance minister is being very smart to take advantage of the gullible nature of the majority of Ghanaian electorates. Come to think of this, the NPP promised the following; one district one factory, one million dollars for each constituency as well as one village one dam in the northern parts of the country. In the budget presentation, we are being told, it is the one million dollars that is going to fund the establishment of factories and the constructions of the dams. Interestingly, this government thinks it can politically sway all of us from critical analysis but believe me, it can never!!
Even, more importantly, is the fact that, government agreed that the country has problems with revenue generation and had not been able to meet targets as in previous budget. What then is the sense in hypocritical creating more revenue gabs without options? The issue of perennial budget deficit should have informed government, that tax reforms is about critical assessment and evaluation of the tax regime and taking the necessary steps to generating more traditional resources to cater for our budget. If the finance minister complains of lack of fiscal space, then it does make sense, abolishing certain strategic taxes and still going for loans. Common sense should have informed him this.
I however, agree with the finance minister that infrastructure plays a critical role in economic development. This is in sharp contrast to what the NPP said about the role of infrastructure prior to the 2016 elections. I heard statements like "people do not eat infrastructure", " infrastructure does not put food on the table" among others. The reality is that infrastructure is the heart of every economy. I loud the finance minister's quest to sanction infrastructural projects as a continuation of where the NDC government left. Indeed, the bar on infrastructure set by NDC government is enviable. This is evident across the length and breath of the country.
Going forward, government must ensure that our country, does not confuse politics with policies if we really want to march into economic prosperity. The inconsistencies, double standard and lame notes on certain economic policies make me skeptical on the several lofty ideas of this NPP government. I don't see any difference between this budget statement and the NPP promises which are; sugarcoated, loftily grounded, overly ambitious and wantonly deceptive.
That is my ordinary perspective and I believe others share my view.
Shall be back........................