Adnan Adams Mohammed
The President John Mahama administration has pledged to promote the private sector, to position it as a key driver of Ghana’s economic recovery and long-term development.
The president’s resolve follows a declaration he made last week that, government will not extend the ongoing Extended Credit Facility (ECF) programme with the International Monetary Fund (IMF) when it ends in April next year.
The ECF came with stringent conditions and reforms which have in some ways impacted negatively on private businesses and individual households due to enhanced domestic revenue mobilization through introduction of new taxes and increases in some already existing tax rates; reduction in the fiscal deficit through restraints in government spending; structural reforms in tax policy and public financial management; and comprehensive public debt restructuring to address high public debt levels. Also; the Bank of Ghana is required to maintain a tight monetary policy stance, which has affected lending rates and increased the cost of doing business.
“After we complete the programme, we will continue to manage government expenditure responsibly and maintain disciplined economic management, creating more space for private sector growth”, President Mahama affirmed while speaking to business leaders in a follow-up session at the Kwahu Business Forum.
“If the private sector thrives, the economy thrives. If the private sector is happy, the government is happy. It is the private sector that can absorb and employ the teeming youth graduating from all levels of our educational system”, he said.
Highlighting the limits of public sector employment, Mahama noted: “When you add up all government employees, from watchmen to chief executives, you’re talking about fewer than a million people — approximately 800,000 — in a population of 33 million.”
He stressed: “Even if we doubled that number, we would still face a major youth unemployment challenge. The only sector that can adequately absorb the growing number of young people entering the workforce is the private sector.”
Meanwhile, President Mahama reassured the business community of his government’s commitment to making revenue mobilization more business-friendly and transparent, emphasizing that his administration has no intention of introducing new taxes that could threaten the survival of businesses or encourage tax evasion.
“I noticed that when the Ghana Revenue Authority (GRA) was introduced, everybody applauded — you applauded the GRA. The GRA is your friend. I can assure you they are your friend, and they will become even more business-friendly because I believe the solution to our situation is not to pile on more taxes,” President Mahama said.
He further stated, “The solution is to make taxes more transparent and fair to encourage greater compliance. If you keep adding more taxes, people will inevitably find ways to avoid them. That was the same argument we made against the previous government’s introduction of the E-Levy.”
Reflecting on the impact of the E-Levy, President Mahama added, “We warned that people would find ways to avoid paying it — and they did. Instead of solving financial challenges as promised, people simply cashed out their wallets and reverted to using cash to sidestep the new levy.”
