E-levy will not wean Ghana from aid and borrowing, may be used as a collateral for more loans – Executive secretary of Baskin Africa alleges

Mr. Issifu Seidu Kudus Gbeadese, Executive Secretary of policy think-tank, Baskin Africa, has challenged the claims by President Akufo-Addo that the controversial E-levy, when accepted, will wean Ghana off aid.



Speaking at the National Labour Conference yesterday in the Eastern Region, the president reiterated the claim which has also been made by several government officials including the finance minister.

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But quoting a section of the 2022 Economic Policy and Budget Statement delivered to Parliament in November 2021, by the finance minister to support his argument, Mr Gbeadese has challenged this assertion.

In an article, sighted by Ghananewsavenue.com, Mr. Gbeadese said per President Akufo-Addo’s definition and per the “standard practice”, “FOREIGN AID includes project and other direct grants (not to be paid for) and sometimes some concessionary loans (with very moderate interest rate regime)”.

This, he said makes the claim that E-levy will wean Ghana off aid ironical because the 2022 Budget has grants and borrowing as key financing components.

He indicated that in appendix 3A of the 2022 Budget statement, “President Akufo Addo and his govt are expecting a whopping GHC 970m as GRANTS (aid)”.

“In addition to this and still in the same appendix, GHC 12.4bn has been earmarked to be borrowed, GHC 7.6bn to be borrowed as project loans and GHC 4.8bn to be borrowed from the bond market”, the Baskin Africa Executive indicated.

He therefore concludes that it cannot be true that the introduction of the E-levy will automatically wean Ghana from foreign aid whether in the form of direct grants or borrowing.

“I seriously suspect that the government need another revenue stream for them to use as a Special Purpose Vehicle (collateral) to borrow more money, payment of which maybe spread for 15years or more as done with ESLA, so that future governments will be committed to not only maintain the levy but to pay for it”, Mr Gbeadese stated.



 

Read Mr. Gbeadese’s statement below:

 

E-LEVY WILL BE MODELED INTO A SPECIAL PURPOSE VEHILCE FOR MORE BORROWING OTHER THAN TO WEAN GHANA FROM FOREIGN AID

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I listened to President Akufo Addo yesterday, when he addressed the National Labour Conference in the Eastern Region. As part of his address, and in his quest to woo Ghanaians to accept the obnoxious E-levy, the President sought to imply that, the E-levy in its current form will be the only means by which Ghana will wean itself off “AID”. By his definition and per our standard practice FOREIGN AID includes project and other direct grants (not to be paid for) and sometimes some concessionary loans (with very moderate interest rate regime).

Ironically, the President’s own 2022 budget has grants and borrowing as key financing components. In appendix 3A as indicated in the pictures below, President Akufo Addo and his govt are expecting a whopping GHC 970m as GRANTS (aid). In addition to this and still in the same appendix, GHC 12.4bn has been earmarked to be borrowed, GHC 7.6bn to be borrowed as project loans and GHC 4.8bn to be borrowed from the bond market. So, it cannot be true that with the introduction of the E-levy, we will automatically wean ourselves from foreign aid whether in the form of direct grants or borrowing.

I seriously suspect that the government need another revenue stream for them to use as a Special Purpose Vehicle (collateral) to borrow more money, payment of which maybe spread for 15years or more as done with ESLA, so that future governments will be committed to not only maintain the levy but to pay for it.

The President touts the introduction of this regressive E-levy as innovative fiscal measure to wean us from foreign aid. This is not entirely true, because there cannot be any innovative fiscal measure than for President Akufo-Addo to cut down on his ostentatious lifestyle (ie hiring private jet) and his appetite for more profligacy and consumption related expenditures. It is untenable and highly unreasonable for a whopping GHC 3bn to be budgeted for the office of the President at a time when the Finance Minister has publicly admitted that Ghana is broke. Leadership starts with discipline, and discipline starts with cutting down on one’s comfort and to genuinely sacrifice. Indeed, sacrifice ought to start with President Akufo-Addo and not the citizens.

Issifu Seidu Kudus Gbeadese

(Executive Secretary-Baskin Africa)

Contact: 0244198031

 



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