Effective bitter medication must be taken to cure the economic malais

K. B. Asante Voice from afar Dec - 01 - 2014 , 09:08

When asked by journalists, I did say that I expected a harsh budget, meaning the economic difficulties of the ordinary Ghanaian would increase if the budget is aimed at curing the economic and social malaise confronting the nation. I was not therefore surprised at the increase in the price of petroleum products.

A politician who described the increase on radio as wicked said that he would no longer be able to fill the fuel tank of his car at the petrol station. He would have to use the small car! So long as those who manage our finances think mainly of those with small and big cars, the economy will continue to be in disarray. The important thing about the petroleum price increase is that it affects the ‘man in the street’.

The ordinary man or woman should know that the government does not grow money on trees. Government money is money taken from us directly through income tax or indirectly through duties and price increases on certain commodities such as petroleum products. This is the message politicians should spread among their followers. This is what the government should teach the people if the leaders want to curtail or stop corruption and petty stealing of public funds. People should feel that corruption involves the looting of their money.

The mind-set may then be changed and Ghanaians would insist that the law takes its course with the corrupt who steal or misappropriate their money and make life difficult by putting the economy in disarray. They would then stop pampering the looters as ‘honourables’ and ‘excellencies’. There is no more effective way of checking the wayward in high places than ridicule and public contempt and finally, incarceration.

To go back to the tax on petroleum products, it should, if properly managed, save the government unnecessary subsidies, increase revenue and ease the pressure on foreign exchange. The big problem is that it will make production more expensive and the high cost of our products in some areas will impede exports. Government will have to find a way of cushioning the effect of high energy cost on some key industries.

Meanwhile, it should pay for electricity consumed by state institutions for which it is responsible. The Electricity Company of Ghana (ECG) is already under stress because of the load shedding. It makes money when it distributes electricity which is consumed and paid for. The cuts affect the company as it does the public. It has the same overheads in salaries and the like but its earnings are reduced. The electricity company should also put its house in order. In particular, it should ferret out illegal connections and vigorously pursue revenue collection.

With regard to the financial situation facing the nation, the difficulties should be acknowledged whether we call them problems or challenges. The country has been living beyond its means for too long and puerile arguments as to whether the Kufuor, Mills or Rawlings administration was responsible for the present situation should give way to intelligent analysis of past policies and their consequences. It should be acknowledged that the economy is in a bad way.

That is why we have gone to the IMF. No person goes to a bank to borrow when he or she does not need a loan. No bank will give a loan without collateral or other conditions. A responsible bank will safeguard the interests of its depositors by ensuring that loans are repaid. We have gone to the IMF because the economic situation is not good. We should expect conditions or agreement to adopt policies which will enable us to repay any loans or facilities granted by the IMF of which we are a member. The IMF cannot fritter away or put in jeopardy the money or resources of its members.