President Nana Akufo-Addo
PRESIDENT AKUFO-Addo says the performance of Ghana’s Gross Domestic Product (GDP) growth during his tenure in these COVID-19 times is much better than what the National Democratic Congress (NDC)’s John Mahama-led administration recorded.
“It is encouraging for my government and party, the New Patriotic Party, to recall that the rate of growth of the economy, 5.6%, against the background of the exceptionally difficult circumstances of the COVID-era, is still considerably better than the 3.4% we inherited [2016] in calmer times from our predecessor administration,” he stated.
Speaking at the opening of the National Labour Conference at Kwahu Nkwatia in the Eastern Region yesterday, the President said Ghanaians should not forget that before the outbreak of the pandemic, the country had witnessed average annual GDP growth rates of 7% in 2017, 2018, 2019 and part of 2020.
“Our economy was then, generally, acknowledged as one of the fastest growing in the world,” he noted.
President Akufo-Addo said proactive decisions taken by the government to fight the pandemic as well as revitalising and transforming the economy, had begun to yield results.
He disclosed that the stabilisation phase of the GHȼ100billion COVID-19 Alleviation and Revitalisation of Enterprises Support (Ghana CARES) ‘Obaatanpa’ programme, which is intended to create jobs and prosperity for Ghanaians over a three-year period, ended in 2020.
He said the second phase, which started early this year, aims at revitalising and transforming the economy.
It is also aimed at developing Ghana’s housing and construction industry, reviewing and optimising the implementation of government’s flagship and key programmes, creating jobs for young people, and expanding opportunities for the vulnerable in society, including physically-challenged persons.
“As a result of this programme and the policies being implemented by the government, the economy grew at a provisional 5.2% in the first three quarters of 2021. This growth is expected to be sustained in the medium term,” the President intimated.
He continued, “The overall real GDP for the medium term is projected to grow at an average rate of 5.6%, and we remain committed to returning to the fiscal deficit target threshold, as enshrined in the Fiscal Responsibility Act, Act 982, from this year.”
He reassured that the government would continue to demonstrate the ability, resolve and determination to change the trajectory of Ghana’s economy to help the country recover faster from the effects of COVID-19.
E-Levy
Commenting on the E-Levy, the President said the proposed tax was an innovative fiscal measure which will help improve the country’s tax-to-GDP ratio on an equitable basis.
“I believe strongly that it is in the public interest that it should be enacted into law. We cannot continue to live forever on foreign savings. Those who are concerned about our debt burden are right to focus on it as a major pre-occupation,” he said.
He reiterated that, “We cannot continue to allow less than ten percent (10%), specifically 7.8%, i.e., 2.4 million people, of the population carry the direct tax burden of 30.8 million people. We must provide an opportunity for every Ghanaian to contribute towards nation building,” adding “it is time we accepted the full implications of our goal of Ghana Beyond Aid, and designed our fiscal profile accordingly. The Asian Tigers, whom we envy and want to emulate, financed their rapid development from their own savings. We need to do the same.”
With the pandemic of COVID-19 ravaging the economies of the world, including that of Ghana, he told the gathering that transforming the economy would require the active involvement and participation of all, including the large informal economy.
The President explained that an economy, in which only a small proportion of the population bears the brunt of direct taxation, is unlikely to witness any rapid transformation.
“We have to make concerted efforts as partners to hasten our recovery from COVID-19 by finding intelligent ways of bringing everyone on board to contribute their quota, no matter how small,” he said.
President Akufo-Addo continued, “Government, on its part, is implementing a policy of cutting the budgets of ministries, departments and agencies (MDAs) by twenty percent (20%) this year, as its contribution to measures to ensure fiscal consolidation.”
Ghana’s tax-to-GDP ratio of 12.2%, the President said, compares unfavourably with the rest of the world, as the average tax-to-GDP ratio in West Africa stands at 18%, and the average for Organisation for Economic Co-operation and Development (OECD) countries standing at 34%.
BY Ernest Kofi Adu