The writer, Kofi Anokye
I am on a platform along with several distinguished individuals from all walks of life where important national issues are discussed as and when they arise. One of such issues which came up and triggered a lot of controversies was the recently read 2022 budget of Ghana.
In the process, several questions came up with regards to the way forward for Ghana. Further deliberation with several politicians and state actors indicated that the question if answered will go to the very heart of our economic woes and bring about the much-needed transformation.
2. How do we become self-reliant?
3. How do we reduce our debt stock?
4. How do we solve unemployment?
5. How do we promote young and women entrepreneurs?
6. How do we expand the tax base
7. Ho do we stop political ostentation, huge public sector expenditure, waste, and corruption?
8. How do we finance these agendas without increasing the national debt stock?
In the process, I promised to answer him hence this article.
1. How do we balance our budget as a nation?
I will begin by defining what a budget is. A budget as defined is an estimation of revenue and expenses over a specified future period and it is utilized by governments, businesses, and individuals. From this definition, it can be seen that it is just an estimation of revenue that you intend to receive and the expenses you intend to make out of that revenue. Hence, the question of how to balance our budget is supposed to have a straightforward answer and it is this.
Just match your expected income to your expected expenses and where you feel your income will not be able to match your expenditure, reduce some of your VARIABLE COST while managing your fixed cost and you should not crush. You can also choose to find a way to increase your income but you have to ensure that you don’t sell those assets which are generating these incomes for you or collapse any sector of your economy. Budget is therefore supposed to be something you plan to do and not what you have done already so varying any of the variable costs just to meet your expenditure should not be a headache.
2. How do we become Self Reliant?
Self-reliance is where one relies on his effort, ability, and resources to survive. For Ghana to become self-reliant, we need to depend on our effort, ability, and resources. By this, we need to stop unnecessary borrowing for projects which don’t pay for themselves.
Every country or business may decide to borrow when the need arises, but those should be for specific projects financing which can pay the loan amount and in the end yield profit for the nation. Here, we have an economic team who will decide to go and borrow just so that the exchange rate will be supported. When you do that, you are only engaging in deferred hardship which will pile up over time, explode eventually and increase the hardship on the people if you are unable to borrow anymore and that is what is happening to us as a nation right now.
Again, we need to produce more to increase our GDP. It starts with sensitizing the people on the need to work hard and be productive in whatever they do. Being productive as a nation means the following: (i). Producing more goods and services through the opening up of more businesses either directly or indirectly by government or private sector. (ii)Setting up an environment that naturally encourages and supports genuine businesses to grow so we can tax them reasonably for developmental purposes.
(iii) Ensuring that energy which is the backbone of every industrialized nation is available at a competitive rate so that goods and services produced here can equally compete with the imported. (iv) Training more Technical and vocational students to man the middle-level manpower required in our various industries instead of these ‘raw’ SHS graduates who have no skills and are mostly unable to engage in any productive venture after school. In this case, they become a liability to society instead of assets.
3. How do we Reduce our Debt Stock?
Very simple! you only have a debt to service if you go borrowing unreasonably. So please borrow wisely as I have indicated above. Just borrow for projects that can pay for themselves over time and even yield profit. I love the gas infrastructural project financing which was acquired during president Mills and John Mahama’s administration, I believe it should serve as the blueprint for borrowing. Borrowing to stabilize the exchange rate for instance should be a thing of the past.
Tax and charge the users of those facilities which were financed through loans. For instance, I am a regular user of the GEORGE WASHINGTON BRIDGE in the United States of America. The bridge connects New York City to New Jersey’s Palisades on the Hudson River. It was built over eighty years ago. To use it, you have to pay the road toll as I speak before you can cross it when driving. I still cannot come to terms with the rationale behind the cancelation of the road toll levy, especially when we are being swallowed by debt. You cannot reduce your debt when you close income generation avenues.
4. How do we solve Unemployment?
Unemployment problems can be solved by the following methods:
i. Train and encourage more students to go into Technical and Vocational training instead of Senior High School. This is because, by the time they are through with vocational education, they would have been equipped to create their jobs and become independent. SHS in its current state only encourages dependency and delays independence for the youth. We have reduced education to speaking big English instead of being productive.
ii. Control your energy cost by ensuring that you don’t burden that sector with a lot of taxes as it is. By this, goods and services produced here can be competitive. This will encourage more businesses to also decide to set up here.
iii. Encourage entrepreneurship skills rather than creating the impression as though the government can employ them. Businesses’ should be supported to flourish instead of witch-hunting patriotic business owners who disagree with you your policy directions.
iv. Stop taxing businesses unreasonably as taxes have the potential of killing businesses
v. Redirect NABCO funds into a sustainable production venture by setting up at least one business owned by the government in each district so employees can feel secure and be more productive.
How do we produce young entrepreneurs?
More young entrepreneurs can be produced from Technical and vocational training than any other means. The answer to creating entrepreneurs cannot be calling people to bring their business plans for money so they can start their businesses no!!!
GRASS ROOT entrepreneurs actively working should be identified and given the necessary training in the very areas they are operating and resources to enable them to expand and employ more people. There exist several people already engaged in their businesses but struggling due to the absence of key tools or finance to inject into it.
These people are more reliable, tried and tested, and can be trusted to keep working when support is provided than idle people who sense an opportunity, write a proposal and receive support. They have not been tried and tested enough to survive the crazy world of entrepreneurship. This is where I think the government can come in to assist.
Again, there could be a national entrepreneurship day just to appreciate successful young entrepreneurs and I believe it can go a long way to encourage others. The culture of demonizing businessmen and collapsing their jobs in the name of politics should cease, it discourages ambitious young people with dreams of becoming the next business mogul.
Expanding the tax net
A prudent financial manager does not only know how to collect money but how to put that money collected into a productive venture that will continue to yield profit. So to tell you the truth expanding the tax net alone is not the only means of liberating our economy from our financial burdens but also prudent use of the little we collect can do the magic.
People can only be taxed when they work and make some money. Hence, deciding to expand the tax net to make money from people when they have not made any income cannot be the way to go because they may react.
By this, the taxpayer may have only one legitimate means of escape and that is to engage in what we call the TAX AVOIDANCE SCHEME.
Tax avoidance is where the taxpayer conducts himself in such a way that he or she will do things that will not cause him to pay tax so far as that industry is a concern. In doing so he may either decide to stop that business or even find another means of conducting the same business but this time without paying tax to the government.
The danger here is that it may lead to a loss of jobs when the government decides to proceed just because the entrepreneur has decided to avoid that nuisance tax. The government will as well lose the taxes from the employees which used to be “PAYE” which is paid as you earn. There is no need to introduce new taxes, what is needed is to increase the capacity of the government to collect them.
How do we stop political ostentation and corruption?
Very difficult at this time in our political journey. But one of the means I believe we can employ to at least minimize it is to strengthen state institutions to be independent of executive control. There are too many powers in the hands of the executive especially when they are backed by a parliamentary majority.
We can consider the implementation of voting at the MMDCEs just to take away some of the powers given to the executive. The MMDCEs are supposed to be the direct agents of development and when they are also controlled by the executive at the central level then we can always be sure that we are going to have issues to deal with in terms of corruption and things of the sort.
Remember, the essence of democracy is gradually to take away powers from the central government and give it back to the people. Hence when one person is given huge powers under democratic settings, then it defeats the true meaning of democracy.
For proper checks and balances within the democratic settings, the Executive must not be seen to be controlling the other two arms of government: The Judiciary and The Legislature for that matter. The media being an extended arm of government, The 4th Estate of the realm also needs absolute independence to be able to expose rot and canker in our society, Corruption is fought on the back of strong institutions and independent press.
We can be thankful for the current settings of parliament as it has reduced the tyranny of the executive through the majority caucus and forced a situation where consensus-building appear to be the only to progress. This phenomenon has made the executive more cautious than it has ever been because the opposition appears to have been armed to hold them accountable.
How do we finance special initiatives without increasing the national debt stock?
Financing these government special initiatives calls for a paradigm shift from our current behavior, beliefs, mindset, attitudes, and approach, we need a new project financing approach because the ‘take a loan and build’ one can no longer be relied on. One may ask, how do we raise the funds locally? I have already mentioned that government needs to bolster its revenue mobilization capacity to ensure that people pay their taxes, this is where we are guaranteed extra revenue for such initiatives.
Also, the government need to be measured in their promises and where they realize the available resources cannot actualize the said promises, they should have the courage to tell the people that “we said it but we are better off not pursuing ”, This is what leadership should be all about, being truthful to the people and being accountable.
Conclusion
We need to believe that the only way to lasting financial and economic freedom does not lie in the hands of any politician but within us and that is what democracy aims at. We need to re-examine ourselves to know what we can do to help ourselves at all times should the politicians fail us. We need to dream big but live cautiously plan, and design strategies to implement them in other to achieve positive results.
Above all, we need to fear God and respect human dignity in all our endeavors as we struggle towards our dreamland.
Righteousness should be our guiding principle in everything we set out to do. For nothing will work for us but righteousness, and no form of righteousness will do but Christ’s form of it so far as know. This is because it seeks to instill service with integrity in those who truly pursue that form of righteousness.
Happy and prosperous new year to all.
Stay safe and God bless us all.