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Tackle corruption head-on ; Analysts urge govt

In 2015, the government must tackle corruption head-on as it is the primary and most crucial step to transforming the economy, a senior economist and a management consultant have advised.

 

The 2015 Budget and Economic Statement of the government has as its theme: “Transformational Agenda: Securing the Bright Medium Term Prospects of the Economy ’’ and spells out a number of actions to transform the economy based on strengthening and deepening good governance; promoting export-led growth and industrial development through value addition to natural resources.

Sharing their picks of the three immediate low hanging measures managers of the economy should do in this year of transformation,  economist Professor Peter Quartey and the President of the Ghanaian-German Economic Association (GGEA), Mr Stephen Antwi, said in separate interviews that fighting corruption was germane to ensuring credibility and transforming the economy.

Tackling corruption

Prof. Quartey, who is the Head of Economics Department of the University of Ghana, cited prudent spending and tackling corruption head-on as an integral part of ensuring fiscal discipline in the economy, as well generating more revenue from the informal sector.

He has maintained that there are a lot of self-employed people in the informal sector who do not pay income taxes which, therefore, warrants a robust National Identification System and an expansion in the scope of the Tax Identification Number (PIN) to make it mandatory to rope in all eligible tax payers.

The tax policy unit of the Ministry of Finance estimates that only 1.5 million pay taxes in the country, leaving the over 13 million of the economically active and employed population of the country not paying any income tax.

Ghana’s economically active population of 15 years and above is 15.2 million. Approximately, 94.7 per cent of this number, totaling about 14.4 million, is said to be employed, according to the 2010 Population and Housing Census.

Again, tax administration should be stronger with models that make it easier for tax compliance.

“It should be possible to check duties on imports or any tax liability from the comfort of one’s home or office. This will make people more patriotic to comply with their tax obligations. We need to improve our tax administration,” Prof. Quartey, who is also a Senior Economist at the Institute of Statistical, Social and Economic Research (ISSER), told the GRAPHIC BUSINESS in an earlier interview.

Stephen Antwi

For his part, the GGEA president said the government should set benchmarks for every government entity, especially those which interface with the private sector or render services directly to the public.

“For example, for drivers’ licence and passports, we should have deadlines for processing and these timelines should be copiously advertised and complied with. The standards should cut across all ministries, departments and agencies (MDAs),” he said.

Then, there should be a complaints agency not manned by government officials, which should publish periodic reports on how the public feel about the service and the extent of upholding standards and benchmarks.  

“Heads of departments should be fired if their outfits consistently do not meet standards. Deal with the heads so they can deal with their subordinates. This is the only way we can curtail corruption and the earlier we do this the better; if we wait any further, our position in the pecking order of corruption will continue to worsen,” Mr Antwi stressed.

Ghana ranks 61 among 174 countries on Transparency International’s corruption perception index, scoring 48 in 2014, 46 in 2013 and 45 in 2012, using a scale of 0-100, where 100 represents zero corruption.

The Afrobarometer, which is conducted by Ghana’s Centre for Democratic Development (CDD), also said its survey which sampled about 2,000 Ghanaians found most of the interviewees perceiving “some,” “most,” or “all” of their government, law enforcement, and judicial officials as corrupt. 

It said majority of those interviewed also gave the same assessment of informal leaders such as business executives and traditional and religious leaders. The government has rejected their findings, discrediting it that that small sample size cannot be representative of the over 24 million Ghanaians.

However, there has been some alleged misapplication and misappropriation of funds under the implementation of some public projects such as the Savannah accelerated Development Authority (SADA) as well as the Ghana Youth Empowerment and Entrepreneurial Development Agency (GYEEDA).

The 2012 Auditor-General’s Report shows loopholes in the public sector that resulted in more than GH¢2 billion loss to the state, due to financial irregularities by public and statutory organisations which occurred in 2012 alone.

They resulted from irregularities in cash and payroll management amounting to more than GH¢116.3 million and GH¢251.8 million respectively; tax irregularities of GH¢1.07 billion and procurement of GH¢50.5 million, and a whopping GH¢629.7 million lost to stores and contract irregularities, while outstanding debtors, loans and recoverable charges cost the country GH¢1.69 billion.

Ending power outages

Although the two personalities addressed the issues in separate telephone interviews from different locations, their picks converged on ending the power outages this year “as a matter of urgency.”

“We need to address energy challenges as a matter of urgency,” Prof. Quartey said. This is crucial to achieve growth because this has a direct impact of industries.

Mr Antwi said measures used in managing the energy crisis during Christmas should be improved to include options of beefing up supplies from imports from neighbouring countries, saying we should solve the energy challenge once and for all.”

The President, John Dramani Mahama, on New Year’s Day declared that 2015 will be a year in which the country will “banish darkness from our land and put an end to ‘dumsor’ forever.”

The Energy Commission in its 2014 Energy Outlook called for urgent steps to develop alternatives power sources, particularly the quick processing of gas and the provision of incentives to encourage investment in liquefied natural gas (LNG) regas facility built in the shortest possible time.

Other areas

The economist also suggested the promotion of economic growth and employment as another immediate priority the government should consider in transforming the economy.

That, he said, should be underpinned by transforming or modernising agriculture, as well as promoting local content in order to grow the real sector (agriculture, industry and services).

Food and food products constitute 51 per cent variables in the consumer price index (CPI) used in determining the general price level of prices in the country, otherwise known as inflation.

The agriculture sector constituted about 20.6 per cent of the country’s total productivity in 2014, down from the 22 per cent it contributed last year. 

For the private sector player, the government should improve credibility in the economy by quickly concluding negotiations with the International Monetary Fund (IMF).

“If these negotiations do not end quickly, we’ll see the cedi depreciate freely again as we saw in 2014. We need to hasten the discussion and not prolong it any further, else the uncertainty will feed into the market and this will not augur well for businesses,” Mr Antwi, a corporate legal consultant, said.       

 

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