Mr Kenneth Kwamina Thompson, Chief Executive Officer of Dalex Financing and Leasing Company Limited (Dalex Finance) said Ghana should stop borrowing to put the economy on track.
He said Ghana was broke, and noted that “we spent almost 100 per cent of all our revenue including grants’ on three line items namely Compensation to employees, Interest Payments, and, Statutory Payments.
“The Statutory Payments covered the GETFund, District Assemblies Common Fund, and National Health Insurance Scheme”. Mr Thompson stated this at the Chartered Institute of Market Ghana (CIMG) evening encounter dubbed; “A conversation with Ken, Ghana’s Economy in 2018”.
He therefore urged Mr Ken Ofori Atta the Finance Minister to “stop borrowing,” stressing that “since we spend over 100 per cent of our revenue on these three items, all our other expenditure is done from monies borrowed. “We are borrowing to fund consumption and not to fund investment. Our debt is piling up to 70 per cent of Gross Domestic Product, and, we may not be in a position to repay in future.
“Even before then, any natural or man-made disaster could send us into a default tailspin of Government obligations which could cause intolerable hardship, widespread business failures, and mass unemployment”. Mr Thompson advised the Finance Minister to stop borrowing to fund recurrent expenditure and only borrow to fund development expenditure.
He also advocated for an increase in taxes, stressing that “we are not likely to reduce our expenditure on salaries in the short term, and even though there has been some capping of statutory obligations the net effect is negligible. “Our only hope is to increase revenue in the short to medium term in order to fund consumption expenditure. We must increase revenue, get the informal sector to start paying individual taxes, enforce evidence of tax payment on property registration - vehicle registration, company registration, land title registration.
“Increasing taxes across board especially property taxes is our hope in the short term”.
Mr Thompson said the only way we can sell the increment in taxes to the public “is for the politicians to share in the pain, Government must stop the purchase of numerous Toyota Land Cruisers that cost over GHC600, 000.00 each.
"When the citizens see that Government appointees live modest lives, reduction in police escorts and special assistants, they will accept adjustment in taxes upwards”. Mr. Thompson bemoaned the dwindling revenue of the country, charging government to take drastic measures to solve the financial challenges it's faced with.
When asked how small business can thrive in high tax regime, Mr. Thompson said, “It’s a hard choice government should make. Either you increase taxes to increase revenue or cut down expenses or do both.” Mr Kojo Mattah, the National President of CIMG, said the platform was created as part the institute’s aim to champion the role and value of marketing as critical tool for business development and influence Government policy and regulation on marketing and business.
He said the institute would continue to serve as advocate for responsible and ethical marketing practice for marketing and businesses, promote the conduct of innovative marketing research. The CIMG is a leading professional marketing organisation established in 1981 and has since dedicated its activities towards the promotion training and practicing of the marketing profession.