2021 budget: NDC MP Ato Forson gives 7 reasons why Ghanaians will be worse off under Nana Addo

The government is seeking to introduce four new levies and increase other existing ones this year.

Some of the levies in question are COVID-19 health levy, Petroleum levy, Sanitation, and Pollution levy as well as financial sector clean up the levy. 

The Caretaker Minister for Finance, Osei Kyei-Mensah-Bonsu presenting the 2021 budget explained that Ghana has over the years faced difficulties with the economy arising from high excess capacity payments in the energy sector and other non-recurrent expenditures.

"Despite the substantial progress made by the Akufo-Addo Government, there is the need to find additional resources to cover the excess capacity charges that have resulted from the Power Purchase Agreements (PPAs) signed by the previous Government which required payments for capacity charges even when the plants involved were idle or unutilised.

"Mr. Speaker, it has become very necessary for Government to consider a review of the energy sector levies. The Energy Sector Recovery Levy of 20 pesewas per litre on petrol/diesel under the ESLA is hereby submitted to this House for approval," he said.

The Minority has, however, kicked against the decision.

The NDC MP Ato Forson speaking on the budget said Ghanaians will be worse off now than during the height of the COVID-19 pandemic.

In a Facebook post, he gave his reasons.

He wrote: 7 Reasons why Akufo Addo’s 2021 budget will worsen the plight of Ghanaians!

1. We need to make a clear distinction between Covid-19 impact on the economy and your own Mess.

Yes, Covid19 has done some damage to our Economy particularly the private sector but at the Central government level, the problems we face today are due to mismanagement and the 2020 Election year Expenditure! Here is why:

A. Debt was already rising at an unsustainable level before Covid! The public debt ballooned from 122billion(56% of GDP) to 291.6 billion representing 76% of GDP!

B. The fiscal path deteriorated before COVID

C. Economic growth slowed before Covid

D. Reckless expenditure and corruption became the norm pre- Covid and got worse during Covid!

2. Government has also suspended the Fiscal Responsibility threshold till 2024. This means reckless and uncontrollable expenditure will continue unabated till 2024!

3.Tax increases have been coined as revenue-enhancing measures! Now at a time

businesses are struggling and need stimulus to recover the AKUFFO ADDO government’s solution is new taxes. Ghanaians will have to brace up for these hikes in taxes:

A. Covid-19 Health Levy

B. Road Toll increases

C. Gaming Tax

D. Sanitation and pollution Levy(Bola Tax)

F. 1% Increase in NHIL

G. 1% increase in Vat flat rate

H. ESLA increase-Additional burden on motorists and food prices.

I. Financial sector clean up Levy 5%- The banks are surely passing this on as bank charges to the consumer

4. From production to taxation:

All the policies of this government’s second term are effectively going to derail the productive sectors of the economy.

5. No hope for all government contractors: The budget made only GHS 3.7 billion provisions for the payment of over 40 billion GHS arrears owed to contractors.

6. Capital expenditure for 2021 is estimated at 2.6 percent of GDP as compared to 5.5 % of GDP for the 2020 outturn while recurrent expenditure( effectively: chop chop) is on the increase

7. No serious investment in the key sectors of the economy including energy, Transport, and Agriculture

This will adversely affect sustainable inclusive growth.