- Advertisement -
Report by Bernard K DADZIE
The Executive Director of Danquah Institute (DI), Dr. Antoinette Tsiboe Darko, has expressed its delight in the fast-paced recovery of Ghana’s economy despite the devastating impact of the Coronavirus (Covid-19) pandemic in the country.
She emphasized that the current growth of the economy has been possible due to the strategic interventions made by the ruling New Patriotic Party (NPP). Adding that the Institute is happy to state that the recovery strategies implemented by the NPP government in the wake of the COVID-19 pandemic have yielded dividends.
“The economy grew at 3.1% and 3.9% respectively during the first two quarters of this year. On average, therefore, the economy grew at 3.5% during the first half of the year – which is higher than the 2016 growth rate. Even though the adverse effects of the COVID-19 pandemic still remain, the Ghanaian economy is growing faster than it was when the current NPP Government took over power in January 2017″, she said.
To her, Danquah Institute believes that with a strong macroeconomic foundation, local production is set to increase to involve more Ghanaians in production, widen the tax net to reduce overdependence on aid, and reduce imports and rather increase exports to ensure a stronger cedi.
Dr. Tsiboe Darko, therefore called on all Ghanaians to support the budget agenda. She said that it is such an opportune moment to disentangle the economy from dependence on aid and must not be allowed to slip by. The Institute however, urges government to continue to deepen the current efforts in transforming the economy.
Touching on E-Levy , Dr. Tsiboe Darko, commended government for the introduction of E-Levy. This to her, will help plug revenue loopholes.
“The E-Levy, a 1.75% tax on mobile money and other electronic transactions, as a measure to “rope the informal sector into the tax net”.
Speaking at a media briefing on Wednesday November, 24, Dr. Antoinette Tsiboe-Darko indicated that the E-Levy is strategic for revenue mobilisation.
“The introduction of a levy on all electronic transactions to widen the tax net and rope in the informal sector is a commendable initiative, given the phenomenal growth and resilience that occurred in this sector, we looked at communication alone, we said 21% even in the COVID-19 pandemic is worth noting,” she said.
Dr. Tsiboe-Darko added, “The levy, therefore, provides a broad based platform for government to increase its needed revenue, in essence the E-Levy is a transactional tax, but it is an extra commission that is being charged and this time it wont be going to enrich the service provider, it will go into government’s coffers to support the drive for entrepreneurship, to pay for our roads and other huge developmental projects,” she added.
Mobile money charges go up 1 February
Presenting the 2022 Budget Statement in Parliament on Wednesday, the Finance Minister said the government has decided to place a levy on all electronic transactions to widen the tax net and rope in the informal sector.
Electronic transactions covering mobile money payments, bank transfers, merchant payments and inward remittances will be charged at an applicable rate of 1.75%,” Ofori-Atta said, “which shall be borne by the sender except for inward remittances, which will be borne by the recipient.
This new policy comes into effect from 1 February 2022. The government will work with all industry partners to ensure that their systems and payment platforms are configured to implement the policy.
According to the Institute, President Nana Addo Dankwa Akufo-Addo, managed the economy with prudent measures until the outbreak of the coronavirus pandemic. In a post 2022 budget analyses, she said economic growth declined to 0.4% in the 2020, in their view, the lowest since 1983.
The Government, according to the Institute however, immediately put together a number of programmes and projects to help the economy recover immediately from the heavy fall. By the end of 2020, debt-to-GDP ratio was at 76.1%. Fiscal deficit had increased to 11.7% without the financial sector and energy sector related expenditures.
“Nana Addo Dankwa Akufo-Addo began his first term of office as President of the Republic of Ghana on 7th January, 2017 and at the time the economy was growing at 3.4% (in 2016). Two years before his assumption of office, Ghana had entered into an IMF extended credit facility arrangement.”
Among other things, Ghana was tasked to clean its ailing financial sector while putting proactive measures in place to restore the deteriorated fiscal position of the economy. Nana Akufo-Addo’s Government was immediately called to action and it responded promptly by registering a positive primary balance for the first time in 15 years at the end of the 2017 fiscal year!
Stressing that a positive primary balance was recorded again, in 2018 and in 2019 to suggest the Government’s excellent performance in debt management. By dint of hard work, the Ghanaian economy was growing at 6.5% at the end of 2019 – which was quite impressive. Debt-to-GDP ratio which was 57.6% (2013 constant prices), however, increased to 62.8% at the end of 2019 fiscal year.
“Unfortunately, the unforeseen COVID-19 pandemic disrupted the otherwise prudent fiscal management exhibited by the government. Economic growth declined to 0.4% in the 2020 — the lowest since 1983! The Government, however, immediately put together a number of programmes and projects to help the economy recover immediately from the heavy fall.
By the end of 2020, debt-to-GDP ratio was at 76.1%. Fiscal deficit had increased to 11.7% without the financial sector and energy sector related expenditures.
“The economy grew at 3.1% and 3.9% respectively during the first two quarters of this year. On average therefore, the economy grew at 3.5% during the first half of the year – which is higher than the 2016 growth rate! Therefore, even though the adverse effects of the COVID-19 pandemic still remain, the Ghanaian economy is growing faster than it was when the current NPP Government took over power in January 2017,” she stressed.
- Advertisement -
