Trimming the size of government is a more efficient measure for prudent fiscal consolidation than introducing a 30 per cent salary cut of some government appointees, an economist, Professor Godfred Bopking, has said.
Running a lean government at a time of economic crisis, he indicated, has far reaching effect of helping the Government reduce its high recurrent expenditure which leaves little for critical infrastructure needed to ease the restrictions on growth drivers of the economy.
“Budgetary allocation to the seat of government is one of the highest in sub-Saharan Africa. Even higher than what Nigeria allocates to the federal government.
“I think the President should tell us they are reducing the size of government which should be a starting point for major reforms in the Judiciary, the legislature and the executive,” said the professor of finance at the University of Ghana.
He was speaking on the sidelines of a roundtable organised by the Institute of Economic Affairs (IEA) on the topic, “Ghana’s Economic Crisis: Is it Time to go to the IMF or is there an alternative way Out?”
He called for urgency to be attached to the review of exemptions granted foreign investors through the passage of exemption bills which he said would help the Government gain more revenue in the long term.
A three-year delay in the passage of the exemption bill as opposed to the urgency attached to the passing of the E-levy bill under a certificate of urgency, he said tended to hurt the confidence in state institutions which anchor democratic drive.
“Why would you want to leave the big multinationals that are in tax paying positions to enjoy $300 million of tax exemptions and go after the ‘Kayayei’ who load their capital on mobile money.
“What the E-levy could raise is far lower than what we could have gained if we had passed the exemption bill in 2019. In 2018 alone, Ghana lost GH₵4.66 billion,” he said.
Furthermore, the imposition of multiple layers of taxes, he said, put the average Ghanaian at a disadvantage with little or no income for savings to invest thereby inhibiting the ability to fully participate in the economy.
This situation, he said, created an avenue for foreign investors to dominate in the running of the economy.