Investment banker and CEO of the Keta Investment Promotion Center, Enyonam Adzo Apetorgbor, has called on Finance Minister Dr. Mohammed Amin Adam to prioritize reducing business costs in Ghana.
In her statement reacting to the Finance Minister’s mid-year budget review presented in Parliament on July 24, Apetorgbor suggested that the government implement measures such as lowering or suspending certain taxes, providing subsidies for critical industries, and improving infrastructure to cut operational costs.
“Reducing the cost of doing business can stimulate economic activity, create jobs, and ultimately increase revenue through growth rather than extraction,” Apetorgbor stated.
She also emphasized the need for improved efficiency in public spending and a stronger focus on combating corruption. By addressing these issues, Apetorgbor argued, the government could free up resources for economic development and build public trust.
“Efficient use of taxpayer money is crucial for creating a stable economic environment and ensuring that resources are used effectively to support growth and provide relief to citizens,” she added.
Below is her full statement…
The mid-year budget review presented by the Minister of Finance has left many Ghanaians perplexed and concerned. The revenue growth strategy outlined in the statement is a blot on wisdom, revealing an approach that is both retarded and unsympathetic to the business community and the ordinary Ghanaian. At a time when the economy is struggling, this strategy is likely to cause panic and drive up the prices of goods and services, to the detriment of consumers.
Ghana’s economy operates largely as a passthrough cost economy. This means that any increase in taxes, fuel prices, or electricity tariffs is automatically passed on to the consumer. The Minister’s strategy, which involves exaction of taxes and levies, fails to recognize this fundamental economic reality. Why are the taxpayers not honoring their tax obligations voluntarily? By imposing and pressurizing businesses, the government is inadvertently setting the stage for higher prices for goods and services. Doing business with your tax obligations up to 40% is a major concern. This will hit consumers hard, particularly those already grappling with the high cost of living.
Businesses in Ghana are already facing numerous challenges. High operational costs, coupled with a difficult economic environment, make it hard for many enterprises to survive, let alone thrive. The Minister’s strategy of revenue growth through taxes and levies is a blow to these struggling businesses. Instead of providing support and creating an enabling environment for growth, the government is adding to their woes. This approach is not only short-sighted but also lacks empathy for the everyday struggles of business owners and entrepreneurs.
It is imperative that the Minister of Finance reconsiders this strategy. The wisest course of action to bring relief to this tattered economy is to focus on reducing the cost of doing business. This can be achieved through measures such as lowering or suspension of certain taxes, providing subsidies for key industries, and improving infrastructure to reduce operational costs. By making it easier and more affordable for businesses to operate, the government can stimulate economic activity, create jobs, and ultimately increase revenue through growth rather than extraction.
Furthermore, efforts should be directed towards improving efficiency in public spending and addressing corruption. These steps will free up much-needed resources that can be used to support economic development and provide relief to citizens. By tackling waste and ensuring that taxpayer money is used effectively, the government can build public trust and create a more stable economic environment.
The Minister’s revenue growth strategy is not only ill-conceived but also unsympathetic to the plight of Ghanaians. It is time for the government to adopt a more empathetic and thoughtful approach to economic management. By creating an environment that supports business growth and reduces costs, the government can help steer the economy towards recovery and ensure a better future for all Ghanaians.
Enyonam Adzo Apetorgbor
(Investment Banker, Development Finance Analyst and CEO of Keta Investment Promotion Center)
