The government of Ghana, by its increase in utility tariffs and introduction of some taxes, is pursuing suicidal economic policies, Member of Parliament (MP) for Obuasi West, Kweku Kwarten has said.
The Public Utilities Regulatory Commission (PURC) announced new tariffs late last year: 59.2 per cent and 67.2 per cent for electricity and water, respectively.
A fuel price increase of 27 percent also came into effect on Monday, January 4, 2016, after the passage of an Energy Sector Levy Bill by Parliament in December 2015.
“It is a strategy by government to take more money from the public and private sector. This is a suicidal economic policy.
“When government taxes public sector and individuals and more money gets in the hands of government then we see wasteful expenditure like the rebranding of buses,” the Member of the Finance Committee in Parliament stated in an interview with Joy FM’s Dzifa Bampoe on Tuesday, January 5, 2016.
There has been public outcry over the increases in tariffs and prices of petroleum products. A meeting held Tuesday by Organised labour, Ghana Employers Association (GEA) and Association of Ghana Industries (AGI), on the one hand, and government, on the other hand, ended in a deadlock.
Mr Kwarten warns that the increases will lead to a rise in inflation and an increase in policy rate by the Bank of Ghana with a resultant increase in borrowing rate. Those consequences, he said, will create unfavourable economic conditions. “Increasingly we are making our businesses difficult to operate,” he said.
Mr Kwarten added that the inefficiency of the Electricity Company of Ghana (ECG) and government’s indebtedness to the state power distributor, are the cause of ECG’s problems.
“ECG is in crises because government has not paid what it owes. Government consumes power it does not pay for. ECG does not collect what it is supposed to collect from consumers properly, and that is why ECG is in trouble,” he reiterated.
He is charging government to withdraw the taxes and tariff increases so that there will be “money in the hands of individuals so that economic activity can expand and create jobs”.
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