• admin
• November 22, 2021
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• Budget Ghana

Ladies and gentlemen of the media, I will like on behalf of the Economic Fighters League to welcome you all to our Awoshie office for this very important press conference. We are gathered here today to officially register our displeasure at the attempt by the government to suffocate the people of Ghana by increasing the hardship that we are all already facing.

We are not here to dabble in the usual economic jibber jabber that is characteristic of NDC and NPP political ostriches but to cut through the noise and present in an uncensored manner the true reality of the economic and livelihood issues of Ghanaians. Last week, the Minister of Finance presented the budget for the year 2022. In that budget included several objectionable policies intentions and measures, which has made it imperative for us to sharply respond to those. It is clear from the voices on the streets and the markets that the 2022 budget has come to compound the existing hardship inherent in the system. the government frequently side of name as an excuse for the economic hardship in the country but the same government forgetting that the people of Ghana, we’re the ones who were hit by the pandemic continues to make my quest especially for the poor and vulnerable, and in Ghana today only a few in the establishment I know invulnerable. Let’s not take the issues of concern one after the other.

Taxes

Perhaps the most obnoxious policies in the 2022 budget is the increment in taxes fees and charges and the introduction of new taxes. I’m sure you have heard about the following taxes.

Introduction of these new taxes and the increment in existing fees and charges clearly demonstrates the lack of sensitivity of the establishment to the plight of the Ghanaian people in their struggle for decent lives and livelihoods. For instance, take the electronic tax, which is a new ducks that has been slapped on mobile money transactions, bank transfers and all electronic many transactions. We must not let it be lost on us the full implication of this tax on the day to today livelihoods of the people of Ghana. It is going to make live difficult for majority of the people. Mobile money has become the prevalent means by which people in the lowest classes of society transfer money from and to family, friends, and business partners. Already, the telecommunications companies place obnoxious charges on people’s transactions. When sending money on MTN, one has to pay charges and when receiving, there is an additional charge. This amounts to double charges on the same transaction. This is something we have talked about and continue to oppose. What the government should have done in this regard was to stand on the side of citizens and order the telecoms companies to stop these obnoxious charges. The government could also have rather put their levy on the charges already placed on mobile money transactions by the telecoms companies and restrict them from passing on such levies to the consumer. Rather, the government has opted to increase the burden by slapping additional costs on the people for choosing to use mobile money as a medium of transaction. This is regressive and criminally insensitive.

Pure water sellers who transfer GHC 300 to their supplies after a day sale will pay GHC 5.25 from their daily commission. Pregnant women who transfer GHC 120 to a clinic in the village is now being asked to pay for seeking healthcare and safe delivery at the hospital. Teachers and nurses when they receive their salaries will have to pay chunks of it to the government just for transferring a salary or part of a salary that has already been taxed at the rate of 17.5%. A NABCO employee who takes his/her salary of merely GHC 700 gets taxed GHC 3.5 for transferring GHC 300 out of his meagre GHC 700 to his/her mother in the village.

All this is coming on the back of consistent increases in fuel prices which have affected the prices of everything on the market. Fuel prices has risen at least 16 times in 2021 and the year has not even ended yet. As a result, food prices have skyrocketed. The regular ball of kenkey has shrunk in size and its price of GHC 1 increased by between 100% and 200%. In some cases, a ball of kenkey that used to be GHC 1 is now being sold for GHC 3. So “kenkey with pepper and fish” has become “kenkey and pepper nkoaa”. Maize prices, beans prices, cassava, yam, tomatoes, onions, all of these are fast becoming unaffordable for the majority of the people. The system is increasing becoming too hot for the Ghanaian. And this is not the time to be increasing taxes and introducing new taxes. A responsible state at this time will be introducing measures to reduce the hardship on Ghanaians. In some cases, governments have initiated cash transfers to citizens. Each citizen is entitled to a cheque every month to enable them withstand the shocks of the pandemic. In our case, the little that we have left to survive on is now being taken from us. What sort of country is this?

There are those who have said that the introduction of the taxes is due to the shortfalls in revenue. And that government needs to raise revenue to embark on developmental issues. There are many fundamental problems with this position. First of all, the monies that have been collected over the years through both domestic and foreign sources have not been used for productive development. They have been expended on frivolous things and stolen by the high class without any form of accountability. How do you justify the introduction of new taxes without accounting for the ones you already collected. Secondly, there are many sources of revenue that are not being explored. We have consistently talked about all these viable sources of revenue but successive governments have ignored them. Why have they ignored them? Because they benefit from the status quo. Both NDC and NPP high class people benefit from the rot and they conveniently choose ways and means by which they can maintain and sustain these rots so that they can perpetrate themselves in power and continue to steal both in government and in opposition. What are these alternative sources?

1. Excessive and discriminatory Article 71 pay

One of the biggest crimes perpetrated on the people by the 1992 Sakawa Constitution is the issue of excessive and discriminatory pay structure in favour of the of the so-called article 71 office holders. Aside being criminally discriminatory, it has become a major drain on the public purse. We have an arrangement in the 1992 constitution which provides for the payment of salaries to a section of public workers which are in some cases 100 times higher than the general public sector pay. This is because they are given the free will to determine their own salaries. The President sets up a commission, which makes recommendations. The Executive approves the salaries for Parliament and Parliament approves for the Executive. Scratch my back and I scratch your back.  To give you an illustration of the massive discrepancy and discrimination in this, consider the following. In 2016, the average salary of article 71 office holders was GHC 18,211 while the average salary on the Single Spine Salary Structure was GHC 1,128. In other words, the average salary on the SPSS was only 6% of the average salary of article 71 officeholders. The highest paid public sector worker receives less than 30% of the monthly pay of an MP. In 2016, the monthly salary of a member of parliament was GHC 19,136. By 2020, this increased to GHC 28,017 in 2020; a cabinet minister who was at the same time an MP was collecting GHC 22,724 in 2016, increased to GHC 33,270. We have provided a full table (table 1) of these excessive pay for your information and inference.

Aside the huge salaries, this crop of officeholders are also recipients of massive allowances in some cases for things that are already within their job descriptions and for what they are already being paid. That is not all. According to the Professor Ntiamoah-Baidoo emoluments report, they are also to be given additional benefits and privileges. MPs while in office are to be given;

1. free accommodation or 20% of consolidated salary in lieu of official accommodation
2. car loan, 60% of which will be paid for by taxpayer’s money. The interest on the loan will also be paid by the taxpayer.
3. 5% consolidated salary for security
4. Installation grant equivalent to two months’ salary upon assumption of office
5. 30% of salary as incentive for committee chairman and 25% for committee members.
6. Free medical care for the MP, his/her spouse and four children under 18 years.
7. Resettlement grant at the end of tenure.

Then at the end of every four years, they are given fat ex-gratias. The formula used in calculating the ex-gratia is usually the cumulation of four months’ salary for each year served. Thus, for a member of Parliament who worked from 2017 to 2020, we have to take monthly salary for each year and multiply it by 4. Then add all the resultant figures. That sums up to GHC 390,768. We are also providing a table for your inference. We must warn you that these figures are recommended figures from the Ntiamoah-Baidoo committee report. In most cases, the amounts recommended by the ex-gratia committees are deemed too small and are substantially increased by the article 71 people and it seems nobody ever gets to see the final approved figures from Parliament. Clearly, as the figures have shown, article 71 is a huge drain on the public purse. It is a curse imposed on us by the 1992 Sakawa Constitution. Like many provisions in that constitution, this article only benefits the upper-class people in both NDC and NPP, which is the reason for which both parties never want to touch. This is one of the reasons why we have asked for the total abolishment of this constitution, so that we can replace it with what benefits all. Article 71 must either be removed from public pay or if it continues to be paid, then it means there is money in the public purse which means every public sector worker, teachers, nurses, doctors, etc should all be put on Article 71.

2. Stolen money

Year in year out, the Auditor-General puts out damning statistics about the amount of money being stolen in the public sector. Irregularities in the forms of blatant siphoning of funds, non-payment of taxes, appropriation of public assets for individual use etc. Analysis from the records of the Auditor-General’s reports reveal that over GHC 12 billion was lost to these irregularities in 2020, a quantum leap of 135% from the figure in 2019. For the first time since 1992, we got an Auditor-General who was committed to sanitizing the public sector and ridding it of all corruption. Daniel Domelevo’s integrity was known to all and his diligent work proved useful as it led to the recovery of millions of cedis to the public purse through surcharges and disallowances. In spite this stellar performance and integrity, what did we see happen to Domelevo? He was hounded and harassed day in day out. And when he refused to be intimidated, they schemed and got him out, clearly showing that there is no interest in sealing the holes and raising more revenue. The interest in raising charges and introducing new taxes is to further pile more hardship on the people to cower them into submission. But we will not allow that to happen.

3. Frivolous expenditure

The continuous to be wastage of the public purse through profligate waste and unnecessary expenditure. These drain our money and the same people who supervise and engage in these expenditure turn around to say there is no money. For instance, each minister and deputy minister is given a free V8 and saloon car. The cost of two combined can be at least between GHC150,000 and GHC 200, 0000. On top of this, each minister is given free fuel and other freebies. Why is it that when ministers are working, they are given free vehicles and free fuel while teachers get none? Aside this, members of parliament are given car loans, 60% of which falls on the state to repay plus the interest on the loan while the cars become the personal properties of the MPs. If this is not robbery, then what is? What’s more?

When our public officials are travelling across the country, these V8s are lined up in long convoys displaying opulence and lack of sensitivity to the public money. If there is no money, why is the President constantly disrespecting the people by renting very expensive and luxurious aircrafts for international travels. People cannot afford “pure” water to drink but he prefers to bath in the air while imposing more taxes on us. Meanwhile the 1992 Sakawa Constitution exempts him from paying any taxes. If these frivolous expenditures are cut, one would see that there will be more money in the national kitty.

4. Tax Concessions

Governments since 1992 including both NPP and NDC have consistently avoided discussion on the issue tax concessions being dolled out to multinational companies. These have become a major source of revenue leakage. In some cases, companies are given up to 10 years of operation without paying any taxes, running into billions of cedis. The World Bank Ghana Public Expenditure Review(https://documents1.worldbank.org/curated/en/972961498157963462/pdf/Ghana-PER-FINAL-June-19-2017.pdf) revealed that in one year alone, tax related foregone expenditure amounted to 5.2% of GDP. Calculate this by the GDP of Ghana in 2021 and see the billions the billions that are being freely dashed to foreign companies while we suffer in our own country. With a GDP of GHC 439.2 Billion at the end of September 2021, this amounts to GHC 22.8 Billion. This makes absolutely no sense. Therefore, this constitutes a huge revenue source that must be taken seriously. Tax concessions should be scrapped to increase revenue. In the absence of this measure, imposition of taxes becomes a deliberate attempt to pile hardships on the people.

5. Ownership and control of our resources

Closely related to the issue of tax concessions is the ownership and control of natural resources. We have huge natural resources ranging from gold, bauxite, oil, manganese and others. But these resources are largely owned and controlled by foreign multinational companies. Over 70% of the gold production and export is controlled by five (5) companies – all foreign according to research by Bennet Kpentey and John Sutton. The extractives model that is being ran in this country is a total rip-off facilitated by our leaders – both NDC and NPP – who are empowered by the 1992 sakawa constitution to give away our resources. Their only resort is royalties and corporate taxes to raise revenue. However, data shows unequivocally that equity ownership is where the money is. In the 2022 budget, carried and participating interests in the oil industry gained us $330 million, more than corporate tax and royalties combined. This clearly shows that the 10% ownership we have is able get us more money than royalties and tax. It follows logically that more ownership will give us more money. Instead of looking at this route to raise more money, the best solution the government could come with is Agyapa, a scheme to transfer even the royalties we take to private interests on the London Stock Exchange for peanuts. How can we give all our resources to foreigners and turn around to say there is no money, using same as a pretext to tax the people to death.

6. Production instead of taxation

The focus on the laziest of measures to get money is the reason for the appetite for taxes rather than focus on production. Serious countries take wholistic view of their economies to see the interconnectedness between the various productive sectors and how they can contribute to more revenue. Without a robust and comprehensive social system cushioning the people, excessive taxation is a recipe for disaster. One doesn’t have to have a PhD in economics to know this. It is basic common sense.

7. Neo-liberal economic structure

The 2022 budget does not address the core issue of the structure of the economy. The over-reliance on IMF/World Bank policy prescriptions that led us to where we are in the first place is not going to take us anywhere.  Year in year out, they read budgets promising heaven and earth without any intention to fulfill them. They are much less concerned about changing the structure of the economy to benefit the masses rather than the few. This is what our fight is about and we shall not stop until the total reconstruction of the country is achieved.

Having analysed the 2022 budget, we have come to the conclusion that the budget presents no hope for the people. Rather its proposed policies and measures will exacerbate the plight of the people and increase the hardship on us. We accordingly reject this budget, we reject the MoMo tax, we reject the bank transfer tax, we reject the increase in charges. In short, we reject the attempts to pile hardship on the people. We have thus together with co-conveners of #FixTheCountry scheduled a massive demonstration for 26^th November 2021. It will be a massive demonstration to Parliament to tell the parliamentarians to their face that we, the citizens of Ghana on whose authority they sit there and take ex-gratia are instructing them to reject the 2022 budget. We call on all Ghanaians to show up for the demo as this affects each and everyone of us.  Thank you for coming.