Ghana: Poor management or poor country? Tax expert weighs in
Ghana, is not a poor country, but rather one that is being poorly managed, according to tax expert Abdallah Ali-Nakyea.
In a recent interview, he criticized the government’s corruption and mismanagement, which have landed the country in the tentacles of the Bretton Woods institution.
Dr. Ali-Nakyea’s comments come as the country faces the imminent $3 billion IMF bailout, with conditions that include debt restructuring, a move that has met stiff domestic resistance. The tax expert chided the government and asserted that closing the leakages in the tax collection system would help the country avoid borrowing money on unfavorable terms.
Dr. Ali-Nakyea, who teaches Law of Taxation at the University of Ghana School of Law, argued that automating the tax collection process and closing tax gaps would be an effective way to avoid borrowing.
He cited the past three years, where he noted that the Ghana Revenue Authority (GRA) exceeded its targets as a result of automating the collection processes. He also emphasized that once tax gaps are closed and everyone required to pay taxes does so, there would be no need to borrow.
Moreover, Dr. Ali-Nakyea pointed out that corruption is a significant issue in Ghana and should not be overlooked. He criticized the lavish lifestyles of some government appointees, which make nonsense of claims that the country does not have money. He questioned how these individuals could live such a lifestyle if the country were genuinely poor.
While Dr. Ali-Nakyea’s comments reflect the need for the government to implement better policies to manage the country’s finances effectively, the IMF bailout remains a pressing issue.
The country’s debt has risen sharply over the years, and debt servicing costs are taking a significant portion of the country’s revenue.
To address this issue, the IMF has called for debt restructuring, which has met stiff domestic resistance. Critics argue that the conditions attached to the bailout will only exacerbate the country’s economic situation, which has already been severely affected by the Covid-19 pandemic.
The government’s expenditure is also a significant concern, with critics arguing that the President should be merging Ministries and relieving redundant Ministers instead of adding to their number. The Minority in Parliament is currently seeking to block new Ministerial appointments by President Akufo-Addo, arguing that the government size is already huge. Despite these critiques, the President remains adamant.
Ghana is not a poor country but rather one that is being poorly managed. Corruption and mismanagement have landed the country in the tentacles of the Bretton Woods institution. The need for the government to implement better policies to manage the country’s finances effectively cannot be overstated.
Ghana’s debt situation remains a pressing issue, and debt restructuring remains a viable option. Nonetheless, the government must also take steps to reduce its expenditure, close tax gaps, and combat corruption to ensure a sustainable economic future.
