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OSAFO MAAFO LAUDS RE-INTRODUCTION OF RICE IMPORTATION TAXES…But cautions government against over reliance

By Issah Alhassan, Kumasi - Ghanaian Chronicle
Fri, 20 Nov 2009 | Print | E-Mail | PDF | Graphics Version
Business & Finance

A former Finance Minister in the previous administration of the New Patriotic Party (NPP), Mr. Yaw Osafo-Maafo has lauded the National Democratic Congress (NDC) government's decision to re-introduce the duty tax on importation of rice and other staple foods into the country. He has, however, cautioned the government to support local production to avert possible shortages. p> The two time cabinet Minister in the Kufuor administration said while the decision for the re-introduction of the duty tax would serve as a means of raising revenue for government and also provide a level playing field for local producers, failure on the part of the government to provide specific outlines aimed at boosting local production could result in shortage in supply, thereby raising the price of the product.

The former Member of Parliament for Akim Oda, said government must ensure adequate provision of incentives to local farmers, such as provision of loan facilities, fertilizers and other chemicals necessary to stimulate local production, in order to meet the demands of the market, adding that other issues such as land tenure system must be adequately addressed to encourage local stakeholders to invest in the production.

The failed Presidential candidate of the NPP was giving a general overview on the government's budget statement presented to Parliament last Wednesday in an interview with ANGLE FM in Kumasi, on Thursday.

According to him, the government can no longer sacrifice its meagre revenue for foreign importers at the expense of local producers, contending that “it is better to let importers pay importation duties and allow consumers to pay realistic prices than to lose revenue through subsidy.”

The government of ex-President Kufuor removed import duties on rice and other staple foods brought into the country, somewhere last year, in the heat of the global economic crisis, as a means of cushioning consumers against the astronomical increases in food products, particularly rice, at the time.

But Dr. Kwabena Duffuor, in presenting the budget statement last Wednesday, announced the government's decision to re-introduce the tax in order to protect local farmers from unfair competition.

The former Finance Minister also described as positive, the decision by the government to build the economy around Agriculture, but was very pessimistic about its ability to implement programmes outlined in the fiscal policy statement.

Mr. Osafo-Maafo, however, slammed government for performing poorly at the micro level for the 2009 fiscal year, saying the inability of the government to control inflation, the downward trend recorded in the GDP growth of 4.7% and reduction in domestic revenue for the fiscal year, had resulted in the contraction of the economy, which according to him, could lead to the creation of unemployment.

“My heart bleeds for the graduates of this country who are coming out of school, there would be a bale to secure job because the government has failed to create the enabling environment for job seekers,” he noted. He also took a swipe at the government for failing to take bold initiatives on taxation, rather than relying on foreign donor support.

Mr. Osafo-Maafo, popularly known as “Oyeadeeyie” also disagreed with the government's position on deficit and arrears, describing it as technically wrong and appealed to the Centre for Economic Policy Analysis (CEPA) to come out and set the record straight.

He stressed the need for the government to present a true picture of the economic situation in the country and desist from vilifying the previous administration by concocting unrealistic figures.

On the question of whether adequate provisions were made for cocoa farmers, the ex-finance minister stated unequivocally that the government had not dealt fairly with cocoa farmer, after failing to balance price on both sides insisting that “payment of bonus, rather than paying farmers realistic prices would in no way prevent smuggling.”
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