The Minority in Parliament has urged Ghanaians to brace up for what they called “maximum hardship” in the 2023 fiscal year.
They said the measures outlined in the “nkabom” budget statement and economic policy of government for 2023 as presented by the Minister of Finance, Ken Ofori-Atta, in Parliament, Accra, yesterday have no solution to the current economic challenges the citizenry were experiencing.
Presenting the budget, Mr Ofori-Atta announced some austerity measures including a 2.5 percentage hike in the Value Added Tax (VAT), a net freeze on public sector employment, a one per cent flat rate e-levy across all transactions, reduction of fuel allocation to government appointees by 50 per cent, ban on the use of V8 and V6 vehicles except for cross-country trips amongst others.
But the Minority Spokesperson on Finance and National Democratic Congress (NDC) MP for Ejumako/Enyan/Esiam, DrCassielAtoForson, told journalists that the measures were cosmetic and offer no solution to Ghana’s economic problems.
“This budget is going to introduce extreme austerity in 2023. I can only urge the people of Ghana to brace up for maximum hardship worse than what we have gone through in 1979 and 1983.
“The budget as read today is nothing but one that would bring intensive and severe hardship on Ghanaians,” he said.
The youth, the NDC MP said would be the hardest hit with unemployment among them at 50 per cent.
“To the youth of this country, there is a net freeze on employment so no hope for you. To the ordinary trader, taxes will go up and for the general Ghanaian people, be ready that prices of goods and services would go up because of the increase in VAT.”
On the reduction in the electronic transaction levy from 1.5 per cent on transactions beyond GH¢100, DrForson said “this means that the exemptions you used to get in the past are no longer available.”
He said by VAT going up by 2.5 per cent, the effective rate of the tax would now be 22 per cent meaning more hardship on Ghanaians.
“The VAT increment is scary because it looks as if this government is unaware of the fact that this Ghanaian economy has introduced unbearable hardship on Ghanaians”
In the view of Dr Forson the austerity measures announced by the minister could rather collapse the economy because the adjustments did not include how they intend to cut government expenditure.
“The things he announced are nothing but empty and would not result in where the proper expenditure cut must come from. What we can see is that the government is shifting the adjustment programme to the ordinary Ghanaian where the tax payer would be made to pay more.”
The Deputy Minister of Finance, Dr John Kumah, on his part said the budget would help Ghana achieve debt sustainability, and with the debt exchange programme with the International Monetary Fund, Ghana would by the end of the year hopefully bring its debt to sustainable levels.
Dr Kumah, who is the NPP MP for Ejisu said the increment in the VAT, broadening of the e-levy, the property rate is all targeted at increasing government revenue for development.
He said despite the economic conditions, government remains committed to the welfare of the people and intends to increase the beneficiaries on the Livelihood Empowerment Against Poverty (LEAP) from 350,000 to 420,000 people and an increment in the GH¢45 monthly stipend and expansion and increment in the feeding grant of the school feeding programme.
“We are building local capacity for exports. Government wants to improve on our forex and one of the key ways we want to that is to build local capacity. We want to support agriculture produce like maize, rice, soya and poultry amongst others so that we can create capacity and expand the economy,” he outlined.
Dr Kumah urged Ghanaians to be patient with the government as it works around the clock to improve on the economic conditions of the country.