The Member of Parliament for Ajumako Enyan Essiam Constituency Hon. Cassiel Ato Forsen has outlined seven (7) major reasons the New Patriotic Party government 2021 budget statement and economic policy for the 2021 financial year will worsen the plight of Ghanaians.
The Former Deputy Minister of Finance under former President John Dramani Mahama’s Administration said, though the Coronavirus has negatively impacted on the country’s economy especially the private sector, the challenges at the Central Government level, were due to mismanagement and the 2020 Election year Expenditure.
In responding to the budget statement presented by the Parliamentary Affairs and Leader for govermment business Hon. Osei Kyei-Mensah-Bonsu on the authority of President Nana Addo Dankwa Akufo-Addo on Friday, 12th March, 2021, Cassiel Ato Forsen said;
1. We need to make a clear distinction between Covid-19 impact on the economy and your own Mess. Yes, Covid19 has done some damage to our Economy particularly the private sector but at the Central government level, the problems we face today are due to mismanagement and the 2020 Election year Expenditure! Here is why:
A. Debt was already rising at an unsustainable level before Covid! The public debt ballooned from 122billion(56% of GDP) to 291.6 billion representing 76% of GDP!
B. The fiscal path deteriorated before Covid-19
C. Economic growth slowed before Covid-19
D. Reckless expenditure and corruption became the norm pre- Covid-19 and got worse during Covid-19!
2. Government has also suspended Fiscal Responsibility threshold till 2024. This means reckless and uncontrollable expenditure will continue unabated till 2024!
3.Tax increases have been coined as revenue enhancing measures! Now at a time businesses are struggling and need stimulus to recover the AKUFFO ADDO government’s solution is new taxes. Ghanaians will have to brace up for these hikes in taxes:
A. Covid-19 Health Levy
B. Road Toll increases
C. Gaming Tax
D. Sanitation and pollution Levy (Bola Tax)
F. 1% Increase in NHIL
G. 1% increase in Vat flat rate
H. ESLA increase-Additional burden on motorists and food prices.
I. Financial sector clean up Levy 5% – The banks are surely passing this on as bank charges to the consumer
4. From production to taxation:
All the policies of this government’s second term are effectively going to derail the productive sectors of the economy.
5. No hope for all government contractors: The budget made only GHS 3.7 billion provision for the payment of over 40 billion GHS arrears owed to contractors
6. Capital expenditure for 2021 is estimated at 2.6 percent of GDP as compared to 5.5 % of GDP for the 2020 outturn while recurrent expenditure( effectively: chop chop) is on the increase
7. No serious investment in the key sectors of the economy including energy, Transport and Agriculture
This will adversely affect sustainable inclusive growth.