Establish Fiscal Policy Centre

Stephen Amoah, an economist and a leading member of the New Patriotic Party (NPP) is advocating for government to establish a Fiscal Policy Centre. He recommended that the center must constitute representatives who have the requisite expertise from all key stakeholder institutions and endowed with research and advisory responsibility mandate. �They should operate as a quasi body with strong internal control systems�, he added in a press release yesterday. The lecturer however, described the recent decision by the government to adjust the tax arm of the fiscal policy upwards as given rise to much controversy among key stakeholders in the country. According to him, some commentators are just displaying their ego trips while others are intellectually being dishonest by placing their individual interests over social interest adding that, most governments find it very tedious in managing the fiscal policy tools which are very critical to the long term growth and stability of any country's economy. Comparing Ghana to the United States of America using the two main political parties, the Democrats and Republicans, Amoah said Democrats, as a matter of ideology tend to adopt a fiscal policy which tends to hamper Gross Domestic Product (GDP) growth. This he said would achieve social goals whiles limiting the economic strength of the private sector mostly leading to increase unemployment. �The same thing the National Democratic Congress is trying to emulate with which unfortunately the expected social benefits that should come with the policy are not experienced due to mismanagement of its discretionary spending policy,� he said. Also known as Sticker, the economist said blaming the economic crack in the current government on the single spine salary structure is ill-fated since the immediate past Finance Minister, Dr. Dufour year after year emphatically declared in parliament that they had exceeded their revenue collection target even before the implementation. He noted that there is a failure because the government has refused to acknowledge that the tax collection system in the country is still not efficient- making all the cost drivers of production in Ghana woefully unfavourable. �Importation cost is so high due to high import taxes. The currency is getting weaker and weaker. It means more cedis have to be used to purchase fewer dollars for imports. Over 70% of our domestic business borrows from the banks and the cost of capital is on the ascendancy. Why will any government think that the best policy now is to increases taxes in Ghana?� Amoah queried. �Taxing goods and services mainly handled by relatively poor classes in society is rather a strategic drift. It is even one of the major policies that will strengthen our currency as it will enhance preference for local goods�, he counseled. He said taxing agriculture inputs when agriculture is consistently underperforming its benchmark as the mainstay of the economy is unbelievable and shows weaknesses in the capability of the government economic team. �Tax policies are managed to benefit the poor through redistribution. Why are they then concentrating their attention on taxing rather poor farmers and fishermen?� He argued in the statement, that the republicans normally adopt expansionary fiscal policy that rather enhances GDP growth and full employment thus allowing money to circulate more among the private sector which is the engine of growth and job creation. �A practical manifestation was the easy way of accessing funds under the NPP regime which enhanced private sector expansion�. Accusing the economic managers of the country as short term policy adopters, Sticker suggested institutions in charge of data systems on addresses should be tasked with deadlines to get them right or face consequences. �The struggle to become industrialized which would provide a long term solution to most of our economic challenges, will stop being a dream only if there is a legal tool that would compel governments to channel considerable amount of the spending arm of state budget into setting up factories that would process most of our raw materials into finished goods, especially those goods that are in competition with the foreign ones. Here I expect that the PPP should be well adopted here with caution. This is because PPP will reduce the degree of profiteering that characterizes the position of private businesses in Ghana. Our stock markets needs a better attention from stakeholders although it is not doing badly,� he underscored.