An economist and political risk analyst, Dr Theo Acheampong, has revealed that the finance minister, Ken Ofori-Atta, failed to address a critical part of the economy in the budget, which is the e-levy.
According to him, the budget statement was to an extent an admission to the reality in the country as government has realized that things are not going according to its plan. However, he noted that the finance minister should have brought to bare how much has so far been accrued by government in its quest to rake in revenue for the country.
“If you look at the statement, the e-levy was not mentioned once in the statement that the finance minister made. Interestingly, only a few weeks ago, we were told that it is actually the e-levy or the IMF. So, you would have expected that an ambit within that statement of how much we have collected so far [is included].”
Dr Theo Acheampong
Dr Theo indicated that the finance minister in the first few paragraphs of the statement, sought to make Ghanaians aware of the things that are going on in the country. Nonetheless, he explained that in his attempt to admit the reality, there is also the need to have an understanding of where the root causes of the crisis in the country stems from.
“So, basically what led us to where we are right now [and] why we are needing an IMF support or a bailout. Of course, he talked about Russian invasion of Ukraine, he talked about COVID, but interestingly, the bigger debate about our fiscal recklessness and the fact that we’ve been living beyond our means and excessive borrowing; all of that compounding to what is a very dire or difficult situation.”
Dr Theo Acheampong
Factors influencing crisis in the country
The economist highlighted that the two fundamental causes for a crisis, are the external shocks which in this case is the Russian-Ukraine war and COVID and “internal or domestic factors such as running inappropriate fiscal policies” that leads a country to having major issues within its economy.
Mr Acheampong acknowledged that the issues confronting the country is a mixture of both domestic and external factors and government must recognize that these factors are what has led the economy into its current state.
“Just after we exited the 2019 IMF program, we started debt bingeing all over again. Even if you look at the statement that IMF issued in March of 2019, when basically they said we had done well in some aspect of the program but the number of the core structural benchmark reforms that are needed we missed many of them… [such as] fixing the payroll system, addressing state-owned enterprises and the recourse to Eurobonds and all the financing needs that we need.”
Dr Theo Acheampong
Mr Acheampong urged government not to politicize the hardships in the country by blaming the previous government as there are some major issues in the country which are independent of a mismanagement undertaken by a predecessor.
“So, I personally don’t buy whole in their argument that it’s to do with the past administration that we find ourselves in this picture. Nevertheless, if you look at even the revenue number, that the finance minister mentioned and the expenditure, we can unpack them. But for me, it was obvious that we have a much bigger problem.”
Dr Theo Acheampong
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