Economist Urges President-Elect Mahama to Prioritize Reducing Cost of Living in First Four Months
Economist and Political Risk Analyst Dr. Theo Acheampong has emphasized the need for President-elect John Mahama to take decisive steps within the first three to four months of his administration to alleviate the cost of living crisis in Ghana.
Speaking during an interview on Arise News, Dr. Acheampong highlighted the importance of implementing promised tax cuts to ease the financial burden on Ghanaians.
“I think the biggest thing really is the signal in terms of the intent of the reforms that the government seeks to undertake in the first three to four months. Bringing down the cost of living and cutting taxes becomes extremely important, and that they can easily do within the first three to four months,” Dr. Acheampong stated.
Ghana’s Cost of Living Crisis
Ghana has been grappling with one of its worst cost-of-living crises in recent years, with inflation peaking at 54% in December 2022.
While inflation has declined to 23% as of November 2024, the effects of elevated consumer prices continue to weigh heavily on households and businesses.
The crisis has been fueled by a series of tax policies introduced by the outgoing government, including the COVID levy, E-Levy, 10% betting taxes, and increased import duties. These measures, although aimed at boosting revenue, have heightened the financial strain on citizens.
NDC’s Promised Tax Cuts
The incoming National Democratic Congress (NDC) administration has pledged to abolish the aforementioned taxes to help ease the cost of living for Ghanaians.
According to Fitch Solutions, the impact of the tax cut policy on the government’s fiscal position will be minimal, as the taxes in question account for only 3% of total revenue.
Dr. Acheampong further pointed out that the successful implementation of the tax cuts and other measures would serve as a critical signal to Ghanaians, including those who abstained from voting due to dissatisfaction with the current economic conditions.
Outlook
The incoming administration’s ability to address inflation and reduce the cost of living will be pivotal to its early successes.
Analysts suggest that a combination of fiscal prudence and social interventions will be necessary to stabilize Ghana’s economy and restore public confidence. The next few months will be crucial in determining how effectively these reforms are implemented.
