Sunday, 19 November 2017
Minority predicts bleak economy in 2018 ahead of budget

Minority predicts bleak economy in 2018 ahead of budget

The Minority in Parliament has said Ghanaians may experience severe hardship in 2018 if government continues with the current path it has taken in its management of the economy.
Speaking at a roundtable discussion to assess the economy ahead of the 2017 budget statement, to be delivered tomorrow, Minority Spokesperson on Finance, Cassiel Ato Forson, said figures from the International Monetary Fund (IMF), points to this fact, and might come to pass if nothing is done to forestall it.

“How can you create jobs under severe austerity under fiscal consolidation? The budget deficit in IMF article 4 is projected to be 3.8, so ladies and gentlemen, next year, let us be assured that there will be severe austerity equivalent to 1983. How can you create jobs when you have mandated the central bank to pursue tight monetary policy? How can you create jobs when the real sector, the non-oil GDP, is projected to grow in 2018 almost at the same level as 2016?”
“We believe that, unfortunately, government’s economic policy for 2018 will bring about severe hardship and Ghanaians must be well informed,” he added.
The minority cited the country’s rising public debt stock as a situation that can take Ghana to a Heavily Indebted Poor Country status by the end of 2019.
Ato Forson also said contrary to what the governing New Patriotic Party (NPP) promised Ghanaians while in opposition, they have done virtually nothing to keep to their promise of holding the country’s debt stock in check.
“When the Energy Bond and the UT/Capital Bank bond is added, the Debt-to-GDP will rise to 76.8 per cent from 72.5 [inherited from the previous government]. Ghana is heading towards HIPC. Ladies and gentlemen, don’t be surprised if, by the end of 2019, we are declared HIPC,” Ato Forson, who is also the Member of Parliament for the Ajumako-Enyan-Essiam constituency, added.
Ato Forson further warned the government to desist from its intention to tax mobile money transactions as it would hit the country’s many poor folks the hardest.
“Ghanaians expect a reduction in the corporate income tax rate from 25 per cent to 20% to be included in the 2018 budget statement. It is our expectation that government will follow through with the firm promise that they made, and we hope that we are not going to see another 419 budget,” the minority spokesperson on finance added.
He asked government to abort plans of imposing taxes on mobile money transactions in the country, saying they are reliably informed that government is nursing such intentions, something they believe will threaten financial inclusion.
“The intention to tax mobile money transactions, as we are reliably informed, must be aborted immediately since it constitutes a serious threat to financial inclusion and economic growth in Ghana”, he said.
Ato Forson also argued that such a move will adversely affect millions of Ghanaians who use mobile money for daily financial transactions.
“It is also regressive because, compared to the relatively affluent non-core financial services that the NPP removed for the relatively rich, this insensitive ‘mobile money umbrella tax’ will seriously affect millions of Ghanaians who use their telephones to transfer small amounts to relatives.”
The minority made the claim ahead of the 2017 budget statement, which is expected to be delivered tomorrow.

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