General Secretary of the Peoples National Convention (PNC), Mr. Atik Mohammed has underscored the need for the country to ensure a strong domestic revenue base if the economy is to grow.
Speaking on the Kokrokoo Morning Show last Thursday on the Dr. Bawumia’s presentation on the economy in Kumasi last week, the policy analyst advised the growth the economy is currently seeing should not be a base for excessive borrowing as it is not good at some point.
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“As your economy grows and you continue to borrow, there is the need to pull the breaks at some point in time. It can get to a level where it will no more be a source of economic growth but a source of negative economic growth. So we must pull the brakes on borrowing when we get to some level because as it stands now, the amount of money we spend on paying interests does not allow us to make capital expenditure the way we want it to be. So even though we have managed the debt fairly well, I strongly suggest that we should focus more on increasing domestic revenue and reduce the rate at which we borrow” he said, adding that although we are not near a point of crisis, we should watch because we almost got to that point in 2016.
According to him increment in the country’s primary balance from -0.3% to a positive primary balance as a percentage of GDP is very encouraging.
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He however charged the government to reduce taxes that affect the cost of doing business in the country. He believes that this government’s promise of increased production which must come with reduction in taxes are not evident, adding that taxes which have direct impact on cost of production must be cut, adding “because as we talk, I don’t see the kind of production me, I expect to see. It is true that 1D1F has come but we still are complaining that manufacturing is suffering. Which tells you that a lot more needs to be done as far as this policy philosophy of moving from taxation to production is concerned”
Pointing to the situation of difficulty to come by such information presented in Ghana, he said Dr. Bawumia at the Town hall meeting did well to encourage the public by giving that much data. He said the information given was an updated one especially looking at the recent 2019 budget; this time not having to wait till times like the presentation of supplementary budgets to get facts and figures.
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He went on to congratulate Dr. Bawumia for making the complex parts easy in addition to supporting his points with facts according to him was good and helped everyone to understand. “First of all, he talked about what they came to meet and truly if you look at the issues and how they were structured, they were all true. The challenges they came to meet and how these challenges have been improved upon” he added
Mr. Atik also said that the government needs to increase its spending by paying for services rendered and do investment spending.
