Dr Lord Mensah, a senior lecturer at the University of Ghana Business School, has petitioned the government to halt providing freebies to Ghanaians.
He explained that despite the devastation caused by the pandemic, the country is no longer under lockdown. With this, people have returned to their normal lives and as such the freebies must be suspended.
“This means we have enough money or we have enough buffer to contain the necessary freebies that are coming up at the cost to the state. For me, I will say at this time we have to stop the freebies.
“I was not even in favour of any freebies when even at the heat of the COVID. But then, we had no choice and we had to provide them because it had two forces.
“We had economic force and political force and I think the political force superseded the economic force and that is why we were enjoying the freebies at the point where we even had to stop it”.
Dr Mensah further rejected the extension for the free water supply to homes by emphasizing the political aspect of the freebies.
“I was thinking they would have stopped it somewhere last year September. At the time when the lockdown had ended and we were still moving about doing few things for ourselves. But then, we continued to December and that is where the political aspect comes in. So, effectively I will say yes, we shouldn’t have gone on further with the freebies at this time. We should stop it”Dr Lord Mensah
Government’s free utility package
Government in January this year renewed its free utility package for Ghanaians for an additional three months.
In President Akufo-Addo’s address to the nation, he said the difficulties occasioned by the pandemic, had necessitated government support.
As such, government will, thus, continue to pay the electricity bills for the country’s one million active lifeline customers for the next three months. H.E the President added that the package will be reviewed at the end of March.
Proposed taxes to pay for COVID-19 freebies
Information Minister, Kojo Oppong Nkrumah, has indicated that the government’s proposed new taxes will help address the huge fiscal gap.
Mr. Oppong Nkrumah revealed that government’s borrowed funds to provide free water and free electricity among other expenses must be redeemed.
“That GH¢ 19 billion has to be paid for at some point. The liabilities we have incurred have to be paid for. COVID-19 expenses are going to be with us at least for the medium term… It does [include free water and electricity] which is part of the COVID-related expenses”.
The Information Minister explained that the proposed taxes have become necessary to resolve the freebies debt.
“It is free to you; it wasn’t free to the treasury. When we say free electricity, it doesn’t’ mean the Independent Power Producer is also going to say because the President has said free electricity, I won’t charge for electricity. The government will have to pay. The government for example had to borrow money with fiscal impact of about GH¢ 19 billion to make all of those expenses happen. And in addition to that, there are going to be expenses in the medium term because of COVID-19”.