News Guide Africa

Category: Economy and Finance

Adopt Local Content And Local Organic Use To Promote Agric In Ghana – CAGH to govt

The Chamber of Agribusiness Ghana has indicated that, there is a spike in price of fertilisers as a result of the instability in Russia and Ukraine.

The Chamber fears a shortage in fertilizer supply is imminent which could also create rising food costs.

As the second-largest potash producer in the world, Russia is a key global fertiliser producer at a low cost with a huge volume of production. Ukraine is a global leader in grains export. Due to regional tensions and sanctions on Russia, fertiliser trade is already negatively affected.

“In turn, farmers are cutting back on fertiliser use, which raises the cost of fertiliser for them”, the Chamber assessed in a press statement released, last week. “Food prices may rise as a result of lower agricultural output and reduced availability around the world. In the United States, food costs are already some of the most expensive.”

The Chamber listed below some of the immediate effect of fertiliser supply disruption in Ghana and across Africa;

1. Fertiliser prices have soared this year because of a lack of supplies and rising energy expenses

2. The rising expense of food will be exacerbated if farmers continue to use more expensive fertilisers. It’s already starting to take its toll on farmers.

3. Reduced application of fertilisers could have an effect on crop production and growth

Recommendations

1. Government should cushion fertiliser supply chain by waiving tariffs on certain category of fertilisers especially for the planting for food and jobs (PFJ) programme.

2. Government should take a relook at the Cedi depreciation, fuel prices and general cost of living and waive nuisance taxes on these commodities to cushion consumers.

3. Government should support local fertiliser producers like Omnifert Limited, a fertiliser company, a wholly-owned Ghanaian manufacturing company at Dawhenya, Best Fertiliser Company Limited which is under the one district, one factory initiative located at Asankare in the Ashanti Region, which commenced operation in January 2021 to increase their production lines to meet domestic demand.

4. Invest and support commercial organic fertiliser producers like the Accra Compost and Recycling Plant and many others across the country.

5. Implement new fertiliser recommendations and blends for the Guinea Savannah and Forest-Savannah Transition agro-ecological zones by the Soil Research Institute (SRI-CSIR) and other research institutes.

6. Promote climate-smart agronomic practices and adoption of phosphorus-efficient cereal and grain legume varieties in the Guinea Savannah Agro-ecological zones.

7. Promote the utilisation of rhizobium inoculants + phosphorus-based fertilisers for grain legume production in the Guinea Savannah Agro-ecological zones.

8. Promote adoption of crop and site-specific fertiliser blends for smallholder farmers.

9.Set up an Agriculture Resilience Fund to protect farmers as they produce food for the Country’s food security.

*CHAMBER OF AGRIBUSINESS GHANA*

March 16, 2022
Bokpin backs Fitch; warns govt against drawing from reserves

Adnan Adams Mohammed

A senior economist has backed the recent position of Fitch, one of the international rating agency that, over drawing on the country’s international reserves in an attempt to stabilise the cedi will lead the economy into emergency theatre room.

The professor of economics worried that, Ghana may have to go to the International Monetary Fund (IMF), against government’s will, eventually when the economy deteriorates further as a result of the escalating Cedi depreciation.

Fitch Ratings in a podcast said Ghana’s international reserves position has become very reliant on Eurobond issuance. Indicating that, Ghana is not in a situation where the government needs to constantly roll over hard currency debt or whose debt market is wholly reliant on non-resident investors. In supporting the Fitch’s position, the University of Ghana economist noted that, a careful look at the template that Ghana sent to the IMF in 1965 under the watch of Dr Kwame Nkrumah, which is a reflection of what has been happening over the years, there’s only one thing left which is keeping us from going to the IMF right now and that has to do with the depreciation of the cedi.

“If the Bank of Ghana decides to fight that, burn through our international reserves and once the international reserves deplete to a certain level, you have no choice than to go the IMF in an ambulance”, the economist, Prof Godfred Bokpin has said during a TV discussion, last week. “The effect of that is beginning to show on the cedi and what will happen now is that everybody is waiting to see to what extent can the Bank of Ghana defend the cedi with their international reserves.”

“This was what we did in 2014 and somewhere in the middle of 2014, our net international reserves could only cover like 2 months of imports. When it gets to that point, you will have to make a call to the IMF,” he added.

In its Fixed Interest Podcast Series in which Mr Toby Iles, Head of Middle East and Africa Sovereign Ratings featured Mr Jermaine Leonard, the Director at Fitch Sovereign and Lead Analyst for Ghana and Zambia, the agency said Ghana’s inability to access the international market played a major role in the country’s current downgrades.

Talking about the drivers of the downgrade of Ghana’s ratings and the negative outlook, Mr Leonard said: “The key rating driver for the downgrade to B- and the negative outlook is the sovereign’s loss of access to international bond markets”.

“We believe that not being able to issue Eurobond debt elevates some concerns regarding Ghana’s external liquidity, especially as we expect global financing conditions to remain tight for some time and it also exacerbates the existing weaknesses of Ghana’s public finances”.

According to him, “Ghana is not in a situation where the government needs to constantly roll over hard currency debt or whose debt market is wholly reliant on non-resident investors”.

In fact, Mr Leonard added, “Ghana ended 2022 with an international reserves position that we estimate at $7.9 billion and that is just above three months of current external payments and that is an improvement for Ghana”.

“Ghana’s reserves averaged about two-and-a-half months of coverage over the previous ten years, so, that improved reserves position will allow Ghana to meet its external debt servicing payments in 2022”.

“That said, Ghana’s international reserves position has become quite reliant on Eurobond issuance for replacement”, he pointed out.

Continuing, he noted: “If you were to look at a historical chart of monthly reserves levels, you would notice the peaks and valleys that correspond to regular Eurobond issuance followed by the gradual drawdown on reserves until the next bond issuance”.

“Also, non-residents do hold about 20 per cent of Ghana’s domestic government debt and that comes to just under US$6 billion. This is all medium- and long-term issuance, which limits the risk of capital flight but our concern is the slow and steady draining of reserves but then there is also a risk of foreign investors selling what they hold and taking their dollars out of Ghana, which would put further pressure on reserves”.

The other concern, Mr Leonard mentioned, “is specifically about the public finances”, explaining: “Ghana has a medium-term debt sustainability issue that will necessitate a strong fiscal consolidation to get debt levels on a downward path but beyond just the level of debt, there are debt affordability issues; Ghana’s debt is more than five times its annual government revenue and yearly interest costs take up a little less than half of government revenue, so, few external financing options will mean an increased reliance on more expensive domestic debt and that will keep the interest burden high, making consolidation more difficult”.

Asked about the prospects for new sources of external financing and the medium-term fiscal consolidation, Mr Leonard said: “Along with the drawing down of international reserves and the use of IMF SDRs, we do expect that the government will be able to find some additional external financing; this could come from private loans from international commercial banks, or, perhaps, an additional lending from official lenders – an IMF programme is a possibility. This would, also, likely open international capital markets to Ghana again. Ghana completed an IMF programme in 2019 but has been reluctant to return to a programme. That said, Fitch believes that it would be the most likely outcome if the government were to experience some real financing stress”.

Importantly, he added, “I would note that we do not expect that this would be like Zambia, where IMF negotiations dragged on over the course of close to two years and only brought to fruition by a default event and a change in government”.

“Regarding fiscal consolidation, we do expect to see a narrowing in the fiscal deficit but the problem of low government revenue and rigid fiscal structure will remain. Ghana’s 2020 budget forecast a reduction of the deficit to 7 per cent in 2022 and to 5.3 per cent of GDP by 2023. We believe that it is optimistic, our forecasts are for a narrowing in the fiscal deficit to around 8 per cent of GDP by 2023”.

“Now, this should be a significant consolidation, as the overall fiscal deficit was 15 per cent of GDP in 2020”.

Further, he said “we think that a good deal of the deficit reduction will come from COVID-related spending falling out of the budget and that the government will continue to face low domestic revenue mobilisation and that will present some challenges, as interest costs remain high and as the government continues to realise contingent liabilities from the energy sector”. In conclusion, he noted, “we do expect some fiscal consolidation but at a lower pace than what’s in the government’s medium-term fiscal framework and there are some notable risks that could materialise over that period”.

On what could influence a stable rating and positive outlook for the country, Mr Leonard said: “On the positive side, that is what things could lead to a stabilisation of the rating? A resumption of access to international capital markets would be a big one and that could come from an IMF programme, or from a change in investor sentiments. Over the medium term, we will be paying attention to the international reserves position and whether Ghana can see a rise in non-debt creating flows like FDIs and we’ll also be paying attention to whether the government can implement its fiscal consolidation plan and put public sector debt on a downward path”.

“In terms of negative rating sensitivities, here again, the reserves levels will be important as a measure of external liquidity and we’ll also be watching the government’s ability to source new external financing with which to meet its debt servicing obligations. Also, we will be paying attention to the level of fiscal consolidation that the government can achieve along with any signs of stress in the domestic debt market”.

Fitch downgraded Ghana’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to ‘B- ‘from ‘B’ with a negative outlook in January 2022. The downgrade of Ghana’s IDRs and negative outlook, the rating agency said, reflected the sovereign’s loss of access to international capital markets in the second half of 2021, following a pandemic-related surge in government debt.

Fitch, in a report, said, “This comes in the context of uncertainty about the government’s ability to stabilise debt and against a backdrop of tightening global financing conditions. In our view, Ghana’s ability to deliver on planned fiscal consolidation efforts could be hindered by the heavier reliance on domestic debt issuance with higher interest costs, in the context of an already exceptionally high interest expenditure to revenue ratio.”

March 14, 2022
Gov’t to regulate cement industry …draft policy in the offing

Adnan Adams Mohammed

The government of Ghana through Ministry of Trade and Industry has indicated that preparatory works are underway to set up a committee to spearhead the drafting of policies to regulate the country’s cement industry.

The Ministry explains that the stakeholder meeting has become necessary to ensure regulation of their activities and help develop a better cement production industry.

Ghana’s cement industry has operated without any policy to regulate the business. Some stakeholders in the building and construction industry are worried about how vulnerable they become to the might of cement marketers in the country.

“Government is also working with the cement manufacturers in the area of regulation of cement and even the development of the cement business in Ghana. The cement business is not regulated”, Deputy Trade and Industry Minister, Michael Okyere Baafi, briefed the media on the government’s plans in Koforidua, last week.

“We met them, the cement manufacturers, last week. We are going to set up a committee; a committee that will comprise the members of the Ministry of Trade and Industry.”

The Chamber of Cement Manufacturers, Ghana protested the reduction in benchmark value from 50 percent to 30 percent by the government saying it will result in high production cost and affect cement prices.

According to the Chamber, the local cement industry is already suffering from high production cost as a result of the increase in the cost of limestone, clinker, duties, transport/fuel increase, springing up of new cement factories and instability of the cedi against the major currencies with the dollar.

March 14, 2022
Fuel shortage imminent as cedi falls amidst oil prices spikes – Think-tank

Adnan Adams Mohammed

An energy think-tank has indicated that the country could experience a fuel shortage in the coming days.

He said the shortage will be influenced by the depreciation of the cedi and the increase in oil prices on the international market.

The Russia-Ukraine invasion induced unprecedented spike in crude oil and gas prices is troubling many economies. This, coupled with the escalating U.S dollar exchange rate to the local currency (Cedi) threatens petroleum products supply in the country.

“I regret to announce this bad news. I hope it doesn’t happen. What we have observed over the past few months within the downstream sector of the Petroleum industry is that the depreciation of the cedi and the international oil price rise is impacting negatively on their working capital”, said, the Executive Director of Institute of Energy Security (IES), Nana Amoasi VII.

“Between the last few weeks, the cedi has depreciated from about GHS 7.00 to GHS 7.4 giving a clear 40 pesewas on their business. If we are bringing the same quantity of 600 metric tones today, you will need GHS 7.40. That will amount to about GHS 4, 440 and so 30,000 metric tonnes in the next window, you will need an equivalent of about GHS 7.2 million. A clear depletion of wiring capital.”

These factors, according to him, will lead to the importation of less fuel into the system.

“If the situation continues and it is sustained, we will see a fuel shortage,” he added.

The Chief Executive Officer (CEO) of the Ghana Chamber of Bulk Oil Distributors, Senyo Hosi held a conflicting view.

“Not at all, there won’t be an imminent shortage of fuel. I can understand their concern. It is legitimate. But we need to understand that this will not be the first time we will be working with prices around $1000 per metric tonne.

“What we just have to do is to anticipate and make sure that we move credit alongside the same levels required to sustain prices.”

He indicated that stakeholders have preempted the situation.

“We have been proactive about this. We have been engaging the Central bank to deal with the issues of supply.”

“We have also been engaging the NPA as well as the International oil traders to find ways to deal with the credit crunch that we may face because of the rising prices.”

Fuel prices at some fuel stations have crossed the GH¢8 per litre mark in the first week of March 2022 with predictions that the commodity will sell at GH¢9.00 per litre by close of the month.

The National Petroleum Authority (NPA) has already said discussions are ongoing with the Ministries of Finance and Energy to find a manageable solution to the persistent rise in fuel prices.

It said the deliberations will focus largely on the possible removal of some taxes on petroleum products.

“We are also concerned, there are a lot of discussions we are having with the Ministry of Energy, and we are seeing if together with the Ministry of Finance, we will make some proposals,” Head of Pricing at the NPA, Abass Ibrahim Tasunti earlier said.

March 14, 2022
Legal positivism, judicial decisions and fiscal policy implications: the 30th November, 2021 approval of the 2022 budget

By: Prof. John Gatsi

There exist plethora of legal research findings indicating that judicial decisions are dominantly influenced by legal positivism paradigm or jurisprudential school of thought. A judge or the judiciary is at the heart of enforcing and applying the law , therefore, the judge ‘s jurisprudential leaning is very important in deciding on a case.

It was Montesquieu who eloquently explained that a judge or judicial panel is “the mouth of the law and the judge’s only role is to apply the law”. In the corridors of positivism, the written law is complete and comprehensive and does not need any external assistance such as historical, moral nor sociological developments to deliver justice. The positivists jurists believe in applying the written law as it is the purest form of justice. In this paradigm, the judge is variously described as mechanical, strict user of the law and a prisoner of the law to achieve the so called legal certainty . Irrespective of the jurisprudential school of thought, Constitutional experts describe the Supreme Court as the court of policy . Meaning judicial decisions may reflect policy orientation of judges.

If laws are made to correct history, to address social and human development, then legal realism should be the friend of justice. In many cases where the dogma of positivism influence public interest, political and developmental issues, the public reacts negatively to judicial decisions because the justice thought to have been served may create instability or the matter being addressed, was not addressed satisfactorily per public assessment.

Sometimes positivism produces judicial decisions that negatively affect private investments by citizens and foreigners creating risky investment environment with long lasting painful investor experiences. In the Exton Cubic case for example Article 268 of the 1992 Constitution was interpreted as though , it is the private investor who is expected to seek for parliamentary approval of the grant of mineral concessions. When this should have been the duty of the institution and ministry involved. If that is the case , then citizens can go to court to seek interpretation that per Article 174 Parliament did not approve the request to discontinue collection of fees at the various toll both before it was applied. It also means citizens can seek the interpretation of the court to the effect that the petroleum revenue management law does not allow the use of petroleum revenue in payment of fees but to physical infrastructure in education. Also , per article 181 of the Constitution and section 56 of the public financial management Act, prior approval must be received before issuing bonds to ensure those transactions are declared null and void.

The judgment regarding the issue of whether or not a deputy speaker of parliament presiding can vote, the Supreme Court Justices concluded that the 138 members on the majority side including deputy speaker presiding who voted to approve the 2022 budget was valid. The implication is that the E-levy was passed on 30th November 2021. It also means the 2022 budget was fully approved. Thus, all the division, parliamentary disunity and possible erosion of cooperation is not the concern of the positivists. The law must be interpreted to throw its light of peace, stability and tentacles to shape public policy. The fathers of separation of powers preached independence of the organs of government to ensure congruence of effort in the interest of the state. The public cannot see unity among the organs of government. There is bruised relationship created between parliament and the judiciary given the comments attributed to parliamentarians. Now there is no need for consensus building in parliament and consultations with the public because because the public may consider the development unfortunate The cost of the atmosphere created by this decision , is much more than the short term fiscal benefits. Winner takes all will return to parliament if a party wins majority with its negative outcomes. At another time l will deal with the implications and concerns if majority of rulings of the courts reflect policy orientation of the government or the opposition. I do not intend to question why in the 2020 election petition, the Supreme Court stated the EC is an independent institution so cannot intervene. The citation of the constitutional authority to interpretation granted to the apex court is not meant to easily interfere with the almost 30years of self regulation without establishing stringent conditions that must exist to allow the judiciary to take steps to resolve challenges that parliament cannot ordinarily resolve .

Positivists ayeeko . Legal realism we love to see your work in matters that have effects on policy.

March 13, 2022
Businesses proffer solutions to escalating dollar rate

Adnan Adams Mohammed

Ghanaian businesses are ‘up in arms’ against the uncontrollable escalating depreciation of the local currency, the Cedi against the major trading currencies, especially the U.S dollar.

Currently, the Cedi is trading GHC7.15 to one U.S dollar on the forex market. This is up from about GHS 5.58 in the first quarter of 2021. The Cedi is ranked as the worst performing currency among 15 major currencies in Africa as the Cedi has depreciated 7.6 percent this year.

To this, the Ghana Union of Traders (GUTA) has called on regulators of the forex market to fast-track the proposal of making the Chinese Yuan as the only trading currency when doing business with China. They believe such a move will reduce pressure on the Cedi because imports will not be done with US dollars as most Ghana’s import currently come from China because of their cheaper products and cost.

“We can also do a similar clearing system with China where we send our local currency to the local banks, and they have a clearing system with the Chinese banks where they clear with the local currencies”, President of GUTA, Dr. Joseph Obeng, reacting to the current development explained the point that, Ghana could explore a clearing system with China similar to the Pan-African Payment and Settlement System.

“I think this is the way forward, and central banks in Africa have started thinking in that manner. I think they have to fast track those initiatives that will lessen the pressure on the US dollar,” Dr. Obeng said.

Apparently, the Association of Ghana Industries’s (AGI) President, Dr. Humphrey Ayim-Darke, thinks otherwise. He believes moves to reduce the import of finished goods will be in the best interest of the Cedi.

He blamed traders importing finished goods for contributing to the struggles of the cedi.

“They put pressure on the exchange rate because they demand it for finished products.”

Mr. Ayim-Darke was responding to a member of the Traders Advocacy Group, Irene Odoom, who had said Ghanaian industries contributed to the struggle of the cedi because they imported raw materials.

“Most of them don’t have the raw materials here in Ghana to do it,” Mrs. Odoom said on the show.

“The machines you use, some are obsolete and for the end product, the prices are high,” she added.

But Mr. Ayim-Darke retorted that the imports of industries still resulted in a net benefit to Ghana.

“By virtue of their [traders] deeds, bringing only finished products, if you look at the value chain of value addition, it is limited.”

“They don’t create enough jobs and the turnaround of their funds in the value chain is short. When you bring in raw materials, the value chain is longer,” he added.

Mr. Ayim-Darke noted further that this “affects the exchange rate in terms of the deficit the BoG [Bank of Ghana] needs to shore up the currency.”

March 9, 2022
Inflation to rise further

By Elorm Desewu

With the recent hike in petroleum prices in the country, year on year inflation is expected to rise further in the coming month as it would have a severe impact on both food and non food inflation of the Consumer Price Index, (CPI) basket.

The March fuel price increase will have a severe impact on spending patterns, even on food, as consumers spend less and move to cheaper alternatives.

The country may experience an upward trend in the consumer price index (CPI) and food inflation in the short term. The fuel price remains the main driver of higher costs going forward.

The latest forecast by the Bank of Ghana shows that inflation would likely remain above target in the near-term, driven by both external and domestic factors, and only return to target band in about four-quarters ahead. The key risks to the inflation outlook include: rising crude oil prices and its transmission to ex-pump petroleum prices and transportation costs, rising global inflation, food price uncertainties, and the fiscal outlook.

The Monetary Policy Committee maintained the policy rate at 14.5 percent in an attempt to stem the rising inflation.

Ghana’s inflation rate for the first month of the year – January has reached 13.9 percent, according to figures released by the Ghana Statistical Service, which is the highest in six years..

The increase was attributed to rising prices in utilities namely (water, electricity) and transportation while the contribution of housing, water, electricity and gas to overall inflation increased by 4.6 percentage points from 17.5% recorded in December 2021 to 22.1% in January 2022.

Month-on-month between December 2021 and January 2022 inflation was 2.1%. For the first time in seven months, non-food inflation exceeded food inflation (14.1% versus 13.7% respectively).”

On the month-on-month basis, non-food inflation also exceeded food inflation this month (January 2022) by 0.2 percentage points (2.2% vs. 2.0%). Housing and Transport (which includes fuel) once again were the two divisions that recorded the highest inflation (28.7% and 17.4% respectively).

On the regional front, Greater Accra has regained its lead in overall inflation with Upper West region recording the highest food inflation.

Meanwhile, the latest development in Ghana’s inflation is likely to pressure the Bank of Ghana to review its policy rate upwards in the coming month.

March 9, 2022
Mould backs calls on gov’t to rebuild sinking funds

Adnan Adams Mohammed

A finance expert has backed the call by a former finance minister, Professor Kwesi Botchwey, on government to rebuild sinking funds to help in repayment of the country’s maturing Eurobond loans.

The former Executive Director at Standard Chartered Bank, Alex Mould has said, currently the country is practising “cash accounting”, that is, “we pay as we go”. This is ok for steady payments but not good for intermittent large payments like EuroBond principal repayments.

Ghana’s longest serving Finance Minister during a lecture on the economy at University of Ghana yesterday, March 7, 2022, cautioned current government to desist from collateralizing public revenue schemes among other policies that would further mortgage the future of the young generation. Noting that, for example, whoever takes the reins of government in 2025 will have to shed a whopping $1.5 billion in Eurobond principal payment within months of assuming office.

“If we don’t rebuild sinking fund and we are unable to access international capital market to refinance our Eurobonds, then this could mean that the next government may default in its maturity Eurobond obligations in 2025”, Professor Botchwey said.

Consequently, Mr Mould in his reaction to Prof Botchwey’s lecture affirmed that, “most governments don’t worry about the principal repayment because all they do is refinance it in the market that the bonds were originally issued.”

The finance expert further noted that; in light of the country’s current economic predicament, “the Capital markets will be closed to us for a few years while we restore confidence in the inveators and get our credit rating up to levels that do not exclude some qualified investors from holding junk paper; and also, unless we are prepared to pay 13-14% interest rate,which is absurd and abnormal.

“So we won’t go to refinance the chunk of debt maturing in 2025 in the Capital markets, and that’s why we have no other alternative than to rely on our bilateral and other financing from local banks, and also the reason we need to allocate some of our forex earnings from exports and remittances.”

Mr Mould explained, “What this means is that, the forex available to market players will be reduced as we have we have to put some aside for the repayment of the principal that will become due especially in 2025.

“And remember we shall have to buy this forex using cedis so government will be borrowing more cedis in the local capital markets and this will increase interest rates and also the exchange rate for Forex.”

Meanwhile, Prof Botchwey, who proposed a number of wide-ranging measures to address the economic challenges confronting the country, said the current macro economic indicators, including the country’s debt to GDP ratio, inflation rate, drop in creditworthiness rankings, fast depreciation of the cedi against the US dollar, the rising cost of fuel among other indicators pointed to the fact that the nation was in economic crisis.

“The crisis is here and if it is not resolved, it will lead to a catastrophe.” Prof. Botchwey, who served as Finance Secretary in the Military led Provisional National Defence Council (PNDC) Era as well as the Finance Minister during the National Democratic Congress civilian rule, all under late Jerry John Rawlings, said.

March 8, 2022
Understanding mismanagement of an economy in context: No excuses for Ghana’s “broke” economy

By Professor John Gatsi

Economic management outcomes depend on many factors including leadership.

It is unfortunate to think that putting together highly educated citizens or members of the political party in government means expected outcomes are certain.

If that is the only factor in economic management, then throughout history the American, Russian, Japanese, Canadian, German, French economies for example would not have recorded recession ,depression, debt distress, financial distress and sectoral crises.

Touting is not equivalent to expected delivery. When the economy was showing deep signs of vulnerability in the areas of huge debt and exchange rate volatility , the response was aggravated touting by mentioning names of people in government.

Another sign before Covid -19 was that instead of deploying policies to support the efforts of the Bank of Ghana to manage the currency, the government usurped the constitutional mandate of the Bank of Ghana by establishing exchange rate management committee which could not deliver.

It is time for government to publicly accept the fact that in currency management, there are internal and external factors which should be addressed with different strategies.

Ghanaians are expressing disappointments in economic management outcomes in recent times. The government has joined the queue by saying the economy is broke without providing what makes the economy broke. The discussion has assumed some comparisons that should be corrected.

There are some who think that if you are dealing with a global pandemic, issues relating to mismanagement do not arise. Some described the energy crises and the problems under the NDC as mismanagement because it was not caused by Covid-19 and the deep micro and macro level distress of the economy under the NPP is not mismanagement and that it is just because of Covid-19. This perspective is incorrect. It is possible that funds provided to tackle the pandemic have been managed in a manner that is not reflective of what should have been the case. Borrowing excessively in the name of Covid -19 without the willingness to conduct Covid-19 expenditure audit to ensure transparency, disclosures and accountability is a colossal fiscal mistake that will continue to strengthen the believe by people that mismanagement contributed to the crisis Ghanaians are experiencing now. The principles of accountability and confidence are not waived in the management of the economy during a pandemic. We all know that the pandemic has increased global fiscal deficit, public debt , cost structure of businesses among others including Ghana but does not in any way means zero corruption , responsible expenditure and accounting for funds disbursed are no longer requirements in public financial management.
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Economic management during the pandemic has generally been expected to be difficult but it also came with faster access to funds to manage the economy. This easy access to available funds from national and international sources such as the IMF and World Bank was not available to the economic mangers under NDC when crude oil prices went down to the floor including gold and cocoa prices. Under Covid-19 economic management , on average gold, cocoa and crude oil prices are performing well and apart from 2020 , revenue has been encouraging. In the face of these facts, inability to convince Ghanaians that the results we are seeing is the best , means mismanagement is part of the financial distress of the country.
Therefore , the argument that the financial distress is justified because it is the outcome of a global pandemic is not acceptable.

It is sad that we seem to be attacking the credibility of individuals who were part of the NDC government as though they are not permitted to talk about the hardships and erosion of confidence in pandemic economic management and leadership of the country. It is most annoying that people who are holding juicy positions in government, sometimes in institutions that benefited from prudent and value for money application of public debts by the past government, are the ones doing this. Government should be encouraged that in times of widespread hardships, freedom of speech and expression provide reliable data as to how the people rate the government and perhaps areas around which new policies should be developed to address the needs of the people. Insulting and using vulgar words against people is an abuse of the privilege to serve Ghana in government.

The economic management outcomes today are not merely pandemic outcomes but also a reflection of some level of mismanagement.

Now, key government officials believe the economy is broke. Citizens are asking questions as to why “the economy is broke”?. Some genuinely do not believe Ghana is broke because a broke person who is not minded to stop or drastically cut down on offensive expenditure is mismanaging his life. The unwillingness to demonstrate real commitment to prioritizing necessary expenditure mirrors mismanagement. When these issues are addressed, then citizens will agree with government and reduce the degree of mismanagement tag.

Insulting and threatening citizens who express their frustration about the hardships and erosion of incomes and economic opportunities is mismanagement of the privilege to serve.

March 5, 2022
E-Levy for loans: Akufo-Addo ministers caught deceiving Ghanaians

Adnan Adams Mohammed

Key ministers in the current Akufo-Addo/Bawumia government are on deliberate spree of deceit to hide the truth about the initiation of the Electronic Transaction Levy (E-Levy).

Within a period of a week, two ministers have contradicted themselves exposing how deceitful the government is with regards to the E-Levy policy. As a Deputy Minister for Finance, a week ago denied E-Levy wass going to be used by government as collateral to access additional loans.

In a categorical statement to deny the rumour by the minority in Parliament, Mr. John Ampontuah Kumah stated; “It is not true that the government is going to collateralize e-levy and all that, we are going to have enough revenues to be able to properly deal with the country’s development challenges, for example, to pay contractors working on our roads,” he stated.

Speaking to journalists in Kumasi, Mr Kumah described those assertions as lies and malicious propaganda being peddled by people opposed to the introduction of the levy to create disaffection for the government.

Apparently, as shocking as it was and it will be to the NPP government, the Minister for Roads and Highways revealed on the floor of Parliament that, the government may securitise proceeds from the yet-to-be approved e-levy to raise revenue to construct more roads.

“Government is looking forward to the passage of the e-levy that will bring in greater revenue that will be securitised and then used to raise bonds if possible”, in answering questions in Parliament on Friday, Kwasi Amoako-Atta said

“The government in its wisdom has proposed the passage of the e-levy to bring in more revenue to build the road infrastructure of our country for all of us,” he also said.

Responding to the Minister’s comments in parliament, MP for Cape Coast South, Kweku Ricketts Hagan, said the Roads Minister has revealed the government’s true intentions for the controversial levy.

“As they have factored in the E-levy, the government will still be borrowing up until 2025, which is what they have in the budget.”

“They have demonstrated here today that they actually want the e-levy to go and do more borrowing,” he added.

Mr. Hagan stressed that the government would have to answer for its handling of the e-levy

“We want them to understand that they have to be accountable for all the things that they are doing. If not today, it will be tomorrow.”

Ghana’s total public debt stock stands at GHs 332.4 billion, as of May 2021.

That figure brought Ghana’s debt to Gross Domestic Product ratio to 76.6 percent.

The e-levy seeks to impose a 1.75 per cent levy on some electronic transactions such as mobile money transfers from accounts on one same Electronic Money Issuers (EMI), Mobile Money transfers from accounts on one EMI to a recipient on another EMI and transfers from bank accounts to mobile money accounts.

Also transfers from mobile money accounts to bank accounts and bank transfers originating from a bank account belonging to an individual will also attract the levy.

However, the announcement of the policy in the 2022 budget by the Finance Minister, had met stiff opposition, especially from the Minority in Parliament, and other groups and individuals.

They argue that the new tax policy if allowed to be implemented will bring untold hardships on Ghanaians who are already suffering severe economic hardships.

March 4, 2022