AFAG FLAYS DUFFUOR... Says he has lost touch with macroeconomic management... And forcing the poor to pay for Gov`t profligate spending
The Alliance For Accountable Governance (AFAG), a leading pressure group in Ghana, has expressed grave displeasure over the macroeconomic management tactics being put in place to manage the country's economy.
According to AFAG, the Minister of Finance and Economic Planning, Dr. Kwabena Duffuor, had lost touch with the macroeconomic management of the country, hence forcing the poor Ghanaians to pay for the profligate government spending.
Addressing journalists at a press conference in Accra yesterday, a leading member of AFAG, Mr. Sammy Awuku, added: “The fact is inescapable that the Minister of Finance's continuous presence in office is more of harm to the people of Ghana than good, and in no uncertain terms, his long-standing work with monetary policies has made him lose touch with macroeconomic management.”
He observed that the long-standing work of some gurus in the President's economic management team with World Bank/International Monetary Fund (IMF), explained why the government focus was on IMF stabilisation policies, which laargely has huge conditionalities including; Independent petroleum regulatory authority, full financial recovery plan for oil, gas & electricity; a cut in public expenditure and a freeze on public sector employment, stressing: “We can only ask them to get real and get home with the politics of Ghana's economic management.”
Mr. Awuku therefore appealed to the President, H. E. Professor John Evans Atta Mills, to extensively overhaul his Economic Management Team and the Finance Minister, to bring economic relief to Ghanaians.
The group emphasised that the government must be willing to spend, and not to take 5% tax off crude oil, and levy such outrageous taxes on consumables, saying “This is inconsistent with economic wisdom.”
The underpinning theme of this year's budget is “Growth and stability”, in effect however, one can foresee a “growth” in hardship and “stability” in poverty and hunger in the country, AFAG predicted.
Mr. Awuku, flanked by his colleague stalwart AFAG members, lamented that whilst the government could not honour its promise of free school uniforms for school kids, it could spend GH¢1.5 million (15 billion old Ghana cedis) on US President Obama's trip to Ghana.
Also, at the time when the staff of the National Youth Employment Program had not been paid for three months, the government intends disbursing GH¢5.6 million (56 billion old Ghana cedis) for ministerial bungalows renovations.
“The GH¢5.6 million (56 billion cedis) could provide for 933 boreholes at the cost of 60 million cedis each for our rural dwellers. The 56 billion is 12% higher than budgeted expenditure on police accommodation across the country,” Mr. Awuku revealed.
“Today the NDC is comfortable and excited to spend over over 1.2 billion to re-furbish one ministerial bungalow, when the seed amount for the Savannah Development Authority (SADA) is pruned down from GH¢200 million to GH¢25 million. The presidency also has overshot its budget by 40 billion Ghana cedis,” he indicated.
The AFAG questioned why must the poor taxpayer, with an already eroded purchasing power, be made to pay for these “profligate” governmental spending through the imposition of such huge taxes as per the {Fees and Charges (miscellaneous provision) Bill} and Customs and Excise(Duties and other Taxes) Amendment No.2 Bill submitted 18th November 2009 to Parliament.
These included taxes on sugar, rice, maize and canned tomatoes, increased geometrically by 500% respectively.
This enormous increase in fees, and charges by the government, reduces the promise in the party's manifesto to review taxes to make life easier for Ghanaians, mere rhetoric.
On the contrary, what they have done would increase unemployment and leisure.
The effect of a high cost of production in the private sector will trigger price increases limit the capacity of business to expand, and consequently, a decrease in employment and an increase in lay-offs.
Financial intermediation will be weakened, as there will be high default rate by borrowers, and lenders will be unwilling to grant loans, and the consequences could be dire, the group warned.
The irony however is that, this year has seen rises in the international market price of Ghana's major exports: gold and Cocoa. Currently, gold is at an all-time high, and for the first time, above $1,200 an ounce, and in London, for the first time in 24 years cocoa, future struck the highest level. Also, crude, our major import, averages less than $75 on the world market.
“On this note, we are sounding a strong note of caution to Government to abolish and review downwards taxes, as pledged in its manifesto. Failure to do so, AFAG will have no choice than to explore all democratic means available, to resist the harsh economic conditions,” AFAG warned.