Talking Drums

The West African News Magazine

Ghana's difficulties are far from solved - Kwesi Botchwey

From our Ghana Correspondent

The PNDC Secretary for Finance & Economic Planning, Mr Kwesi Botchwey has said that Ghana's economic problems are a long way from being solved in spite of the modest results being felt in the country.

Speaking at a news conference in Accra on Tuesday 9th July on his return from the Ecowas Summit in Lome, the Secretary emphasised that even though the three-year Economic Recovery Programme is nearing its end, it does not mean that the austerity measures which have been introduced during the period will be curtailed.

He added that if at the end of the set period, the country has still no sizeable cash reserve available to begin development projects of national importance, then foreign borrowing will inevitably continue. He emphasised even further that the duration of the 'Period of Economic Recovery' will now depend on the ability of the government to mobilise people to fully implement government policies and directives based on a spirit of self-reliance.

He stated that "Government will to need huge amounts of cash rehabilitate roads, railways, schools, hospitals, harbours, etc, and therefore if we find out at the end of the three- year Economic Recovery period that there is, say four billion instead of one billion in national coffers, then and only then will austerity measures be relaxed. But on the contrary, if it falls short of what we need, then it will be necessary to seek foreign loans and external assistance".

Dr Botchwey stressed that it is only "pure sacrifices" on the part of the people which will bring about the realisation of the objectives of the Economic Recovery Programme. He exhorted the government to curtail subsidies on goods and services as it "foretells more harm than good and will only postpone to the next generation what we of the present generation have to do".

Reporting on the meeting of Leaders of ECOWAS member countries in Lome, Togo, the Secretary pointed out that he re-affirmed Ghana's commitment to the ideals of ECOWAS which "we in Ghana see as an association which provides an institutional framework and forum for consultations among member countries and an indispensable alliance for the common struggle to defend the sovereignty and independence of member countries and of the entire sub-region".

Ghana, the Secretary said, drew the attention of the Summit to some factors which, seriously considered, could accelerate the pace of progress of ECOWAS as a regional institution. This, Dr Botchwey stressed, includes,

(a) The urgent need to ensure that the Community Secretariat has technically competent personnel who can plan and initiate joint development projects which can contribute to the socio- economic progress of the sub-region;

(b) The ability of the Community to "translate words and agreements into concrete action" to be able to meet the aspiration of the people.

(c) The rationalisation of the aims, objectives, organisation and mode of operation of the large number inter-governmental organisations within the sub-region.

(d) The implementation of the Protocol on free movement of people and the right of residence and establishment among peoples of all member states.

Touching on the influx of aliens into Ghana from other West African countries and the expulsion of Ghanaians from Nigeria, Dr Botchwey had this to say: "Ghana has been able to surrender portion of her a sovereignty for the good of our Community and that is why we in Ghana have opened our doors to a large number of citizens from drought- stricken Ecowas member countries in spite of our own grave financial difficulties. At this time when our sub- region is suffering severe economic difficulties, there is a real danger if we make scapegoats of non-nationals in our countries by conveniently labelling them as illegal immigrants. It is very regrettable to think that Ecowas States. treat citizens from member countries with cruelty and degradation. We here assembled have a duty to prevent such danger from engulfing us".

Dr Botchwey then recalled some of the decisions reached at the Lome Summit which he attended. These briefly include:

(a) The confirmation of a new Executive Secretary in the person of the Sierra Leonean, Mr Momodu Munu.

(b) The adoption of a common travel document for use within Ecowas member countries and acceptable at all borders to ensure uniformity and facilitate movement of people from one country to another;

(c) the adoption of supplementary protocols on the Code of Conduct for the implementation of the Protocol on the Free movement of Persons, the Right of Residence and of Establishment;

(d) the importation into and use of passenger vehicles in member countries; (e) the setting up of a five member committee to review and make recommendations on economic development in the sub-region.

The first signs of more years of austerity measures facing Ghanaians have been unveiled in the form of massive increases in the cost of Health Care and fantastic increases in taxes for several areas of small scale private enterprises including the hotel and catering trades.

1. Hospital fees

On Wednesday 3rd July 1985, a Statement issued by the Ministry of Health announced that lack of funds has compelled government to increase fees and charges for health care at all Health Care Centres. According to the official government statement, the increases are designed to "inject funds into the Health Care System and thereby improve upon the quality of services and care in public sector health care centres throughout the country".

The increases announced vary from C200 in urban and city hospitals. Major and minor surgical treatments (Operations) including child delivery attract much higher fees. Hospital laboratory services and purchase of medicines attract additional costs which in total makes the cost of seeking health care an expensive venture. Specialised treatments such as dental and optical cases, medical examinations including autopsies, hospital accommodation and catering services have all been increased to very high levels.

The effect of this latest round of austerity measures is not immediately known but a survey carried out by the Kumasi daily, the Pioneer among a cross section of ordinary people revealed that people are only accepting the increases with a pinch of salt and as one Trotro driver said in the Pioneer survey: "There is nothing I can do or even the Omanhene can do about it. It is a matter of pay up or go to the herbalist or fetish priest or simply lie down and die". One farmer, Opanin Kwasi Kusi of Kokofu said "this hospital charges are going to hit those of us who live in villages. There is much fear for the future because people are going to die".

2. 20,000% increase in taxes

A statement from the Central Revenue Department which was issued to the Press in Accra on Wednesday 10th July 1985, announced increases in taxes and fees for registration for a large number of Service businesses including the Entertainment sector, retail and wholesale trading and other businesses like Seamstresses, Hairdressers, tailors, shoe repairers and artisans of all kinds. The increases are so large, so fantastically large and so unheard of that only in the Table of figures given below can adequately show the extent of tax burden on Ghana's self-employed.

These new levels of taxation take retrospective effect from 1st January 1985 and taxes already paid will have to be 'topped' up to reach the new levels.

There have been no public reactions to these increases yet today's Ghana, no-one should expect any adverse public reaction because there will not be any for even the media have been silent, not unexpectedly. By and large, the effect of this tax exercise is a caricature attempt to discourage 'Buying & Selling' which has become the most popular profession and has dominated the Ghanaian commercial scene for about ten years now - the easiest and quickest means to make money.

Of course with the recent liberalisation policy which has resulted in abundance of goods and commodities in the market, trading as a sole income-earning venture is losing its attraction and gradually fading out as a lucrative business. What might happen is that people in the retail trade for whom business was already 'dead' will simply cut and run in the face of crippling tax obligations.

Thus this new wave of taxes will definitely sound the death knell of trading activities for majority of the small scale traders and seriously affect the 'well being' of the big scale traders.

BUSINESS OLD TAX (per annum) NEW TAX (per annum)

SuperMarkets with turnover (t.o.) exceeding C500,000.00 C500.00 €100,000.00
Retail Trading Outfits with t.o. exceed. €1,000,000.000 €5,000.00 €50,000.00
Retail Outfits with t.o. between C250,000 and €500,000 €250.00 €10,000.00
Retail Outfits with t.o. not exceed. €100,000.00 - €2,500.00
Wholesale Enterprises with t.o. Exceed.€1,000,000.00 C500.00 €100,000.00
Wholesale Enterprises with t.o. not exceed. €1,000,000.00 C500.00 C50,000.00
Grade I Restaurant C600.00 C50,000.00
Grade II Restaurant C240.00 C40,000.00
Video Operators
Snack Kiosks, i.e. Soft drink dispensers - C100,000.00
Cinema Houses C250.00 C2,500.00
Night Clubs (Towns & Rural areas) C2,000.00 C25,000.00
Night Clubs (Cities and Urban areas) C3,000.00 C5,000.00
Casinos in Accra-Tema (per table) C5,000 C10,000.00

talking drums 1985-08-12 Ghana's former vice-president speaks from exile