The New Patriotic Party (NPP) has urged the government to muster the political will and accept that the country is in an economic crisis.
Such an admission, it said, would be the first step towards fixing the economy.
“The government has to admit that the economy is in crisis, so that it can carry the country along and get public support for the tough remedial measures it may have to take,” it said.
At a news conference in Accra yesterday, the NPP outlined alternatives which it believed could turn the economy around.
Addressing the conference, dubbed, “The true state of the economy and a government in a state of denial: The NPP’s response to the Senchi Consensus and connected matters’’, a member of the Finance Committee of Parliament, Dr Mark Assibey-Yeboah, said an assessment of the economy showed it had weak and deteriorating fundamentals.
The MP for New Juaben South said further that the economy was saddled with increasing inflation, high interest rates, declining real GDP growth, a massive increase in the public debt stock and huge and increasing central bank financing of government.
As part of its alternatives, the NPP called for policy credibility to assure markets and investors that Ghana was a safe destination for businesses.
It urged the government to refrain from making new promises and commitments of expenditure for new programmes.
‘’Such promises do signal a lack of appreciation of the current situation and reinforce the loss of confidence in the economy,’’ the NPP said.
It said measures such as ensuring value for money in the award of government contracts ought to be given serious attention.
Leakage in revenue
Other proposals made by the NPP included the need to deal effectively with corruption, which it said was the bane of the economy.
Among other things, it called for a proper biometric-based payroll audit to eliminate ghost workers.
It also called for a legal framework to ensure fiscal discipline.
The NPP noted with worry that in response to the economic difficulties facing the country, the government had resorted to increasing taxes on goods and services.
It said the higher taxes had increased the cost of doing business in the country, compared with what pertained in neighbouring countries, a development which it said would reduce economic growth.
The NPP advised the government to significantly cut down on borrowing for now and shelve its intention to borrow an additional $1 billion from the capital market this year.
It urged the government to implement the proposals it had offered as soon as possible to deal with the crisis facing the economy.
In a reaction, a Deputy Minister of Finance, Mr Ato Forson, described the press conference as a political gimmick “because the NPP had a golden opportunity to contribute to a national discussion devoid of politics at the Senchi Economic Forum which it refused to attend”.
He rejected the claim that the country was in “economic crisis”, explaining that the government had admitted on a countless number of times that “we have short-term challenges but that the outlook is excellent, with a bright future”.
He noted, for instance, that the government had to deal with a wage bill which was above 55 per cent of tax revenue and which could, therefore, not be reduced to 35 per cent in six months.
On corruption, Mr Forson insisted that President Mahama had, at various fora, spoken on dealing with the issue, adding that what was required to deal with corruption was to empower agencies such as CHRAJ and EOCO and resource them to deal with the canker.
Source: Daily Graphic
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