The Smart Contradictory YouStart In The Name Of Social Intervention To Create More Unemployment

The promise was to shift the focus of economic management from taxation to production. Dr Bawumia in 2016 describes the government at the time as desperate and that anything sounds great to them hence, they tax anything taxable. They promised among other things to; reduce the corporate tax rate from 25% to 20%, abolish special import levy, remove import duties on raw materials and machinery for production within the context of ECOWAS CET Protocol, and either abolish or reduce VAT on some selected goods and services they consider nuisance and hinder business progress and economic freedom of Ghanaians.

Since takeover in 2017, the NPP has either introduced new taxes, extended the lifespan of expired taxes, increased rate on existing taxes or abolished a part and increased the rate on the part not abolished. Given the debt situation (nearly 80% to GDP ratio) for which they are been turned down in the bond market and the negative ratings recently from the rating agencies, and knowing that they have already put the Ghanaian to many/all taxes "anything now sounds great" in the words of Dr Bawumia, to the government and here we are with the introduction of the Electronic Transaction Levy, E-Levy which I called "Bawumia tax."

According to the 2022 Budget, paragraph 318, "A portion of the proceeds from the E-Levy will be used to support entrepreneurship, youth employment, cyber security, digital and road infrastructure, among others." The government proceeded in the budget to create a scheme called YouStart under the Ghana CARES to provide 1 million jobs for the youth for the next 3 years. The question is, does the government mean it when it says it will creat 1 million jobs in 3 years for the youth through the YouStart or it is just creating another scheme in the name of social interventions like PFJ, 1V1D, 1C1M$, etc to steal the E-Levy for family and friends?

It is commendable if the government develops programs to create jobs for the youth. PFJ, 1V1D, 1C1M$, NABCO, etc were therefore laudable and welcomed. However, these schemes only ended up loading the pockets of those in government with lots of money while leaving the Ghanaian youth impoverished. The unemployment rate in Ghana keeps worsening from 5.2% in 2014 to 8.4% in 2019, this according to the Ghana Living Standards Survey Reports 6 and 7.

The purpose of the YouStart was to get Ghanaians support the passage of the E-Levy and nothing more. First, the Abridged Budget as read in parliament contradicts the Main/Entire Budget as captured in the Hansard. According to paragraph 105 of the Abridged Budget, YouStart will support youth-led enterprises with the following four products:

1. District Level Loans under 10 000 GHC after 2-3 months of training.
2. Soft loans of up to GH¢50,000 to help start-ups (in particular by young graduates and school leavers) and small businesses to expand;
3. Starter packs (Soft loans tied to equipment acquisition) of up to GH¢50,000 for individuals and GH¢100,000 for associations/groups;
4. A standardised loan package of between GH¢100,000 to GH¢400,000 at concessional rates for SMEs through financial institutions;

However, in the Main Budget, the District Level Loans under 10 000 GHC after 2-3 months of training is not given a mention anywhere. The Abridged Budget is supposed to be a summary of the Main Budget and therefore anything found in the Abridged Budget must necessarily find space in the Main Budget and not the other way round. Given the kind of deceit government we have in our hands, will they not deny this as they did in the Cape Coast Harbour promise?

The District Level Loans under GH¢10,000 is also problematic. If you say under GH¢10,000, what amount are you talking about? Will any amount below this, say GH¢1,000 do? Under the current economic situation, we all know it will be difficult to set up a business with less than GH¢10,000. Again, what kind of training are the trainees going take for 2 or 3 months to prepare them for business. Not all, the exact source of funding for the District Level Loans is not stated in the budget. Apart from the infinitesimal amount allocated to the DACF, we all know the DACF is also in arrears dating back to 2019. How can the DACF shoulder this responsibility if it is going to be the major source of funding for the YouStart under the District Level Loans?

Another serious contradiction is the inclusion of the E-Levy as key component of the phase 2 of the Ghana CARES program. The Ghana CARES is in 2 phases. Phase 1 started and ended in 2020 which was aimed at relieving the hardships of Ghanaians. The phase 2 was for the period of 2021 - 2023 aimed at revitalizing and transforming the economy. According to the government policy document on the Ghana CARES, the government is targeting the creation of 420,000 productive and decent employment in the formal sector from 2021 to 2023—an average of 140,000 new formal sector jobs each year. How can the the whole of phase 2 create jobs far less than the YouStart when the YouStart is a part or fraction of the phase 2? It was my expectation that government would give us the progress report of how it succeeded in creating the targeted 140,000 jobs in 2021 as part of the Ghana CARES. The report is not forthcoming because no job was created. Again, The Ghana CARES program will end in 2023 but per the 2022 budget, the YouStart agenda to create 1 million jobs will end in 2024. Not all, the policy document of the Ghana CARES did not state the YouStart in any page. The YouStart is an after thought and it was just to make the E-Levy to succeed.

In 2017, when Nana Addo's government assumes power, any policy in their mind that will create jobs is implemented without consideration to the fact that the jobs are sustainable or will severe other jobs. First, the NABCO initiative was well intended. The fate of the trainees now is a disaster. There was a contract to engage them for three years after which they will assume permanency status. The contract has since ended last year and they were shown the door by the MDAs. The government knowing the disgrace it is getting into has asked them to stay without any plan to get them sorted out. Under what contract are they staying in the offices? This is not known and there is no hope that it will be known in the future.

There was also the banking sector clean up. The reason for the clean up was to protect jobs and depositors' funds. However, the impact of the clean up has been more severe on jobs than it protects them. Again, analysts say that depositors' funds could have been protected without collapsing the banks. According to ASEPA, 42,850 direct and indirect jobs were lost due to the clean up. Fact-checkghana.com placed the figure of direct job losses at 6,130 but quick to add that the figure is not exhustive of job losses resulting from the clean up. It is also worthy of note that government owes contractors who contract loans from these banks. If government had settled the contractors it engaged, these contractors would have in turn settle their indebtedness to the collapsed banks hence protecting businesses and jobs in both the construction and banking sectors. Clearly, the clean up rather created unemployment rather than protecting jobs. The way and manner some of the financial institutions were collapsed leave more to be desired.

The decision to boost business and create jobs have found space in every budget of this government but clearly people are just been asked to go for others to come. For instance, the Youth Employment Agency (YEA) in 2016 engaged 62,825 youth under various modules in teaching, security, sanitation, health, etc. These people have been rendered jobless with new set of limited number of people occupying their spaces under this government. How can you sack someone and replace him with another and claim such as job creation?

The value of Mobile Money (MoMo) Transactions have always witnessed monthly and annual growth since beginning. After the announcement of the E-Levy in the 2022 budget, the value of MoMo transactions had been reported to have declined by GH¢3.2B for the first time in December 2021. What will be the consequence if implementation finally succeeds? A Deputy Minister of Finance have also said publicly that MoMo transactions will reduce by 24% per research the ministry conducted. This is serious because the MoMo agents entitlements will significantly reduce and most of them will be out of business. Something meant to create employment should not be seen to be creating unemployment for a lot others.

The gains so far made on financial inclusion is gradually becoming meaningless and the determination to promote a cashless economy will be impossibly attainable. Why is this been said? There is something we are not averting our minds to. We are already complaining that the telecommunication companies are charging too much and now we have to include the burden of the E-Levy. There is this concept called "Add charges," in the MoMo space. If this E-Levy succeeds, this concept will change to "Add charges and E-Levy or Bawumia tax." For instance, if I buy a commodity for GH¢1000, and I opt to pay through MoMo, the seller will require of me to add charges of GH¢10 so he can cash his GH¢1000 without incurring a pesewa loss. If the E-Levy succeeds, I will have to add Bawumia tax charges of GH¢15.30 and the total will amount to GH¢25.30. This will deter people from using MoMo.

If the government wants to create an entrepreneurial nation as it always claim, it should rather be giving tax incentives to businesses and not imposing taxes like, the E-Levy, that has the strongest potential to collapse small and medium scale enterprises. Dr Bawumia claim in 2016 they will use tax incentives to grow this economy. What has changed that we are visited with new taxes or increase in tax rates? We know in this country, tax exemptions and incentives are granted to select few who are powerful and/or related to those in government. Government must have a rethink on the exemptions. SMEs should feel the tax incentives and the economy will grow and create jobs. Additionally, the rot in public life must be looked at. Of the GH¢12.86 Billion reported as financial irregularities by the Auditor General, GH¢10.08 stood as outstanding recoverables. If government intensifies efforts at retrieving these monies, the E-Levy will be very unnecessary. Businesses depend on the public sector to flourish. As long us the public sector, particularly government officials, is so corrupt as corroborated by the CPI (highest score, 43) in the life of this Nana Addo government, the business community will continue to see no or little progress and the resulting consequence is unemployment. That is why the unemployment rate has increased under this government.

To end, the government decision to attach the YouStart to the E-Levy was only to court the support of Ghanaians. The policy document of the Ghana CARES seriously contradicts the 2022 budget and the Abridged Budget also seriously contradicts the Main Budget. The government do not have any intention to create a million jobs through the YouStart but it is only a smart way to get us support the E-Levy so that they can get more money to load their packets while kicking the numerous youth in the electronic transaction space and other areas of the economy out of employment. Simply put, the government wants to create more unemployment through a smart contradictory YouStart.

By Taluta Gbanha Mahama

0205483471/0249694343

Gwollu, Upper West.