Franklin Cudjoe, the Founding President and Chief Executive Officer (CEO) of IMANI Ghana, has advised President John Dramani Mahama on the four major strategies to ensure the economy gets back on a sound footing.
In a post on his Facebook wall, the IMANI Boss� caution comes on the heels of what he describes as an equally important advice by President Mahama to the government�s team negotiating with the International Monetary Fund (IMF).
President Mahama charged the team to ensure they do not accept a programme that will bring untold hardships onto Ghanaians.
He also called on them to be guided by the social democratic principles of government. President Mahama said government intends to lay before Parliament a more systematic plan of policy measures on wage bill reduction as part of measures to reduce the huge public wage bill.
This, in his view, will help tackle fraud and other malfeasance in the pay roll management.
However, Franklin Cudjoe believes President must ensure that his government does the following;
1. Avoid wasteful projects
Even though we all applauded the decision to go biometric in the last election, every objective observer knew we have already collected biometric details of citizens for the following purposes: national passports, the e-Zwich payments platform and the national identification system. It has been proposed that we do the same for voters� ID cards, drivers� licenses and National Health Insurance Scheme (NHIS) cards. A harmonised system means you may even be able to use one card for multiple systems.
Even ignoring the inconveniences and inefficiencies, the monetary costs of deploying parallel infrastructure is no small matter. Let us assume the cost of the Electoral Commission system is the benchmark.
A crude estimate of the total cost is a whopping $400m. We believe we can cut $250m off this figure through harmonisation.
2. Risk Analysis on all Government Projects
The presidency should not become the strategic hub for policy planning from a financial and technical point of view. Political accountability resides in the executive, and that is enough. We concede that for most strategic projects the requisite expertise may be spread across multiple ministries, departments and agencies.
The Cabinet Office can be strengthened and given powers that allow it to coordinate expertise across the civil service.
We have centres of expertise that could be asked to help government create a kind of �administrator general� role in the cabinet to vet all proposed projects. It goes without saying that such a move can only succeed if it follows a strengthening of the Cabinet Office to ensure coordination across the technical, financial and political accountability functions of the executive.
3. Let the Pension Sector Work
Potentially, income from pension contributions is more sustainable than oil. For as long as people continue to work, there will continue to be pension contributions. Scheme trustees can invest funds in the private sector, real estate, listed equities and government treasuries. Pension sector reforms planned three-and-a-half years ago are only now being implemented. But there are serious questions to be asked about the operations of the Social Security and National Insurance Trust (SSNIT), which seems to have become a cash cow for politicians. SSNIT has invested in loss-making government enterprises and has very shady reporting methods that can only be responsible for the teeming number of public sector workers who retire on $35 a month after contributing to the scheme for 30 years.
4. Determine an optimal level of taxation
What level of public spending is desirable for a developing country such as Ghana? Should the government spend one-tenth, one-third or half of the national income? The size of government expenditure is naturally associated with the ideal level of tax revenue.
Taxes are a necessary evil, but a generally accepted view is that they should not be a disincentive for profitable economic activity. In Ghana, however, a lot of industry captains and the labour force complain about the tax rates. The perception in the formal sector is that it bears too much of the tax burden to achieve the government�s revenue targets.
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